Health care financing bill is based on false premise
Every California legislator should read The Healing of America by T.R. Reid. An informative and entertaining world tour, Reid’s book would make crystal clear the deceptions being proffered by some proponents of a bill (SB 562) that they misleadingly characterize as similar to single payer systems in other countries. It’s not.
First, let’s learn from Reid how health care models outside the US generally fall into four categories:
- THE BISMARCK MODEL: Found in Germany, Japan, Belgium, Switzerland, and parts of Latin America, providers and payers are private but payers are non-profit. Under this multi payer model (eg, Germany has more than 200 payers), coverage is universal and governments control utilization and cost through regulation.
- THE NATIONAL HEALTH INSURANCE MODEL (NHI): Found in Canada and Australia and to some extent Taiwan and South Korea, providers are private but government is the sole financier. Under this single payer model, coverage is universal and the government controls utilization and cost.
- THE BEVERIDGE MODEL: Found in Great Britain, Italy, Spain, most of Scandinavia and Cuba, government provides both care and financing. Under this single payer model, coverage is universal and the government controls utilization and cost.
- THE OUT-OF-POCKET MODEL: In nations too poor to provide mass medical care, most medical care is paid out of pocket.
California currently is a combination of all four models:
- Native Americans, military personnel and veterans are in single-payer Beveridge systems but without all the utilization and cost controls typically found in Beveridge systems.
- Californians over sixty-five or with end-stage renal disease are in a single-payer NHI system (Medicare) but without all the utilization and cost controls typically found in NHI systems.
- Californians with incomes less than 138 percent of the poverty level are in a single-payer NHI system (Medicaid) but without all the utilization and cost controls typically found in NHI systems.
- Employed Californians under 65 or with incomes greater than 138 percent of the poverty level are in a Bismarck system but with for-profit insurance companies and without all the utilization or cost controls typically found in Bismarck-type systems.
- Uninsured Californians are in an Out-Of-Pocket system without utilization or cost controls.
The sponsors of SB 562 want everyone to think their bill would create a typical single-payer system. It would not.
The sponsors of SB 562 want everyone to think their bill is a single-payer system no different than one of the single-payer systems referred to above. But astute observers — ie, anyone who has actually read the bill — know the bill doesn’t include utilization and cost controls. In fact, SB 562 heads in the opposite direction:
“Covered health care benefits under the program include all medical care determined to be medically appropriate by the member’s health care provider. Covered health care benefits shall include, but are not limited to,” 34 benefits plus “any additional health care services authorized to be added to the program’s benefits by the program.” Deciding the benefits to be added is a 24-person advisory committee, a majority of whom are providers receiving revenues from the program.
In a further boost to utilization, consumers would incur no cost: “A member shall not be required to pay any fee, payment, or other charge for enrolling in or being a member under the program,” nor “any fees, premiums, copayment, coinsurance, deductible, and any other form of cost sharing . . ..” The bill would also boost costs by “restor[ing] fee-for-service to its once-dominant perch in California,” as explained by KHN journalist Chad Terhune in “California’s New Single-Payer Proposal Embraces Some Costly Old Ways.”
Spending on California’s universities, courts, parks and social services is already being crowded out by fast-rising payments to health care enterprises, who are already the largest beneficiaries of state spending. Just imagine the negative consequences for those programs and for taxpayers if the cost-and-utilization-boosting legislation in the form of SB 562 becomes law.
SB 562 is a power play, not a serious effort to improve health or lower costs. Legislators should read the bill before voting.