SF Chronicle: Proposed state health care plan is a faux single-payer system

Every Californian should read “The Healing of America” (Penguin Books, 2010) by T.R. Reid. An informative and entertaining tour of health care systems around the world, Reid’s book exposes the deception being proffered by proponents of legislation misleadingly characterized as a “single-payer” system similar to single-payer systems in other countries. It’s not.

The legislation, SB562, is a power play, not a serious effort to improve health or lower costs.

According to Reid, health care systems outside the United States generally follow one of these four models:

BEVERIDGE: Found in Great Britain, Italy, Spain, most of Scandinavia and Cuba. Under this single-payer model, government provides both health care and financing and “controls what doctors can do and what they can charge.”

BISMARCK: Found in Germany, Japan, Belgium, Switzerland and parts of Latin America. Under this multipayer model, providers and payers are private, payers are nonprofit and governments exercise “tight regulation of medical services and fees.”

NATIONAL HEALTH INSURANCE: Found in Canada and Australia, and to some extent Taiwan and South Korea. Under this single-payer model, providers are private and governments are sole financiers controlling “costs by limiting the medical services they will pay for or by making patients wait to be treated.”

OUT-OF-POCKET: In nations too poor to provide mass medical care, most medical care is paid out of pocket.

California health care is now provided through a combination of the four models, but with unique American variations:

American Indians, military personnel and veterans are in Beveridge-type single-payer systems but without Beveridge-type use-and-cost controls.

Californians over 65 or with end-stage renal disease are in an NHI-type single-payer system (Medicare) but without NHI-type controls.

Californians with incomes of less than 138 percent of the poverty level are in an NHI-type single-payer system (Medi-Cal) but without NHI-type controls.

Employed Californians under 65 or with incomes greater than 138 percent of the poverty level are in a Bismarck-type multipayer system but with for-profit insurance companies and without Bismarck-type regulations.

Uninsured Californians are in an out-of-pocket system.

Sponsors of the legislation now being debated in Sacramento, SB562, want everyone to think their bill is a single-payer system no different than the NHI systems described above. But astute observers, i.e., anyone who has read the bill, know that it doesn’t include the cost-and-use controls central to the successful operation of NHI systems.

In fact, SB562 does the opposite:

“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 22-person advisory committee, a majority of whom are health care providers receiving revenues from the program.

In other words, recipients of program dollars — estimated at $400 billion per year — would get to decide what the program pays for. That’s like Boeing and Lockheed Martin getting to decide federal military spending.

In a further incentive, 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 premium, co-payment, coinsurance, deductible, and any other form of cost sharing.” The bill would also increase costs by cementing “fee-for-service” models of health care, which (unlike “capitated” systems such as Kaiser Permanente) incentivize medical procedures whether they produce better health.

SB562’s sponsors don’t want you to know that state spending on California’s universities, courts, parks and social services is already being crowded out by fast-rising spending in favor of health care enterprises, or that there’s no evidence that Californians are any healthier despite a doubling in state payments to those enterprises over the last seven years. In fact, emergency room visits are up. Not surprisingly, so are the wages and profits of health care enterprises, which already collect $100 billion per year from the state.

The real motivation behind SB562 is power. Its sponsors want to establish a single point of political power in Sacramento because, as the state’s prison guards have so profitably demonstrated, that is the most lucrative way for cronies to gain control over government spending. If you want a sense of what’s in store for citizens if SB562 manages health care in California, just see the consequences for citizens of pensions managed by CalPERS and the California State Teachers’ Retirement System, the costs of which are increasingly crowding out public services.

SB562’s supporters don’t want a real single-payer system. They want a single-point-of-power patronage system over $400 billion of spending per year without cost-or-use controls. Legislators should read the bill before voting.

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