Healthcare - Archive

Dear Legislators,

Few services are more important than medical services yet due to efforts by the politically-active doctors’ lobby to limit supply, Californians have not always been able to get immediate access to such services. Your passage of AB 890 (Wood) in 2020 was a big step towards improving that environment but more must be done. A good review is provided by this excellent article in The Atlantic, which details the “costly, lengthy credentialing system” unique to the United States. With reforms, we can have not only more doctors but also more medical practitioners in aggregate.

We looked high and low for an article that exposed the poison pill buried in Section 100610 of AB 1400, a single-payer measure recently proposed and withdrawn in the California State Assembly, but found none. That’s worrisome. Typical single-payer systems are not governed by boards dominated by providers as called for by Section 100610, which would put the fox in charge of the henhouse. California already has a fox/henhouse problem on its public pension fund boards, which since Proposition 162 passed in 1992 must give precedence to beneficiaries, thereby delegating residents and taxpayers to subordinate roles. That’s how, eg, CalPERS’s board employed biased actuarial assumptions in 1999 to justify a retroactive pension increase the cost of which is still crushing services and taxpayers today.

We are pleased to report that, thanks in significant part to excellent work by GFC’s Sacramento team and more than 10,000 personalized letters of opposition from members of the GFC Network to 47 lawmakers, AB 1400 will not be brought up for a vote in the State Assembly. AB 1400 sought to establish a health care system governed by providers…

It’s that time of year when California state legislators rush to introduce bills before a February deadline. Because it’s also an election year, many — including some to whom we give support from time to time — support bad bills that are good for them politically. We will work to defeat those bills but not to defeat those legislators unless alternative candidates from their districts are better bets for us.

Dear Legislators,

>90 percent of Californians have health insurance. To reach 100 percent, Governor Newsom proposes expanding Medi-Cal to all income-eligible residents, which would turn California into a multi-payer universal coverage system not unlike the systems of Netherlands and most of Europe.*

Whenever I use Medicare, the government pays a health provider of my choice even if the provider is not operated by the government. The same goes for Medicaid, which uses public funds to pay for the care of 15 million Californians.

San Francisco Unified School District spends up to 250% more than the average CA school district on OPEB, which are insurance subsidies for retired employees.

November 1 marked the commencement of the Open Enrollment period during which residents can purchase health insurance for the upcoming year and another opportunity to praise Covered California, the state’s healthcare exchange that’s an exemplar of government services well provided. At a time when even the New York Times is cynical about blue state performance, Covered CA is a reminder that California’s government can do its job well.

If ever you needed a reminder that our nation has always been a confederation of diverse states united only when facing a common enemy, re-read Democracy In America, Alexis de Tocqueville’s 1835 masterpiece.

This year California will devote more than $120 billion to Medi-Cal, the state’s version of Medicaid that serves more than one of every three residents.

Dear Legislators,

We are pleased that 94% of Californians now have health coverage. We’d love to see that figure rise to 100%. Multi-payer universal coverage systems such as those that dominate continental Europe and towards which California is marching can work extremely well. But one big difference is that European systems do a better job of controlling costs and utilization. That’s one reason the US devotes so much more of its GDP to health spending without getting much better health in exchange, and also why some enterprises — including providers doing business with the state who make political donations — are so profitable.

Dear Legislators,

92 percent of Californians have insurance coverage. The eight percent who don’t are primarily undocumented residents. CA has sufficient ongoing resources to cover them.

At a cost of $4.9 billion per year, California provides more than Medicare to retired state employees and under terms far more generous than other states:

Recently, US Senator Bernie Sanders issued this surprising tweet:

Dear Legislators,

We find ourselves amazed that few state legislators and their staffs know about CoveredCA. They should take a test spin, which takes less than a minute. Eg, say you are a 53 year old retired prison guard with a $90,000 annual pension who lives in Sacramento with a spouse age 53 and two kids ages 15 and 13. Input that info at the Shop and Compare page and after a few click you’ll be presented with 24 plans and estimated savings of $1,461.15 per month.

Dear Legislators,

We are pleased that more and more of you are eager to address the billions you unnecessarily divert every year from services to extravagant insurance subsidies for retired state employees (“Retiree Health Subsidies,” or “RHS”). Following are some basic facts followed by a list of reform opportunities.

Here’s something Assembly Members Luz Rivas, David Chiu, Richard Bloom and Buffy Wicks don’t want their constituents to know:

At a time when criticism is leveled at CA’s government for poorly performing agencies such as the Employment Development Department, it’s important to point out excellently performing agencies such as Covered California. Now that I’m on Medicare I no longer need CC but my wife and daughter do and it is a marvel. Application and renewal are simple and this morning (just seven days into the new year) 1095-A forms have already been sent. In contrast, our son who lives in New York has to deal with New York State of Health, which turns every task into a heavy effort.

From Bay Area Council, 9/10/2020: Accurate, timely information is among the key weapons in our response to the COVID-19 pandemic, from understanding public health warnings and directives to planning for what’s ahead. The Bay Area Council’s series of weekly webinars feature top experts providing information, insights and guidance on a range of topics from the public health response, to federal and local policy, to business continuity. As California struggles to reopen and rebound from a ruinous economic downturn that has cost millions of jobs, state and local elected officials are proposing a raft of new targeted taxes on businesses, investors and entrepreneurs that will slow down the recovery, make California less able to compete and worsen the state’s already volatile budget. To understand what’s behind these tax proposals and what they mean for California’s economy, Bay Area Council Chair Mary Huss, President and Publisher of the San Francisco Business Times and Silicon Valley Business Journal, and CEO Jim Wunderman led a discussion on Thursday, September 10 with David Crane, President of Govern for California and Stanford University lecturer; Richard Kovacevich, former CEO, Wells Fargo; and Jim Wallace, CEO, BPM.

No organizations ignite more fear in the hearts of California lawmakers than California Correctional Peace Officers Association, California Teachers Association, California Medical Association and Service Employees International Union. But like the Wizard of Oz, there’s not as much behind the curtain as most people think:

As federal policymakers consider future legislation to address the economic challenges created by COVID-19, they should take the shortest route possible to get aid to those who need it. Where possible, the assistance should go directly to affected individuals and businesses, rather than through the states. If it’s not feasible for the aid to be sent to recipients directly, states should be held accountable for ensuring that those in need are actually getting it.

GFC has long pointed out to legislators that there is more than one path to universal coverage, including the multi-payer path taken by Germany, France and others. In the past we’ve encouraged legislators to read The Healing of America by TR Reid to gain a sense of those paths. Now, health policy advisor to President Obama Ezekiel Emanuel has written a book (Which Country Has The World’s Best Health Care) that, based on an interview he gave earlier this week on KQED’s Forum, promises to shed valuable new light. I’ve just started the book and will share my notes when completed (here are my notes from Reid’s book, which we’ve shared with some of you before). 92 percent of Californians are covered. Let’s get it to 100 percent.

Yesterday, Los Angeles Mayor Eric Garcetti warned of employee furloughs to help meet an anticipated $600 million revenue shortfall. Before LA furloughs workers providing important services, the city should save up to $300 million per year by emulating the City of Glendale in reforming and means-testing a subsidy currently provided to retired employees.

SACRAMENTO — More Californians are acquiring medical insurance, but there are increasingly fewer primary care doctors to treat them. There’s an easy partial fix, but it’s blocked by an old turf war.

Continue reading at LA Times.

San Francisco Unified School District’s revenues are 40 percent higher than five years ago yet the district just announced a $32 million deficit. That’s because spending on retirement costs went up more than 100 percent.

One of the fundamental problems with the U.S. healthcare system is that it’s costlier than just about any other country’s, and yet it does not deliver notably better results. Millions of Americans are forced to skimp on or go without care, either because they can’t afford the out-of-pocket costs required by their insurance or because the coverage is too costly to begin with.

Continue reading at LA Times.

To understand California’s publicly-funded school system, it helps to understand federally-funded health insurance. Both Medicare and the Veterans Administration are government-funded insurers but the VA is also a government-operated health care provider. While Medicare enrollees may freely choose among health care providers, VA enrollees may choose a non-VA provider only in limited cases.

Here’s another way to look at the complicated question of California’s commitment to public education in these flush economic times, with some compelling illustration of the state’s finances. And an unsettling conclusion: more and more tax increases will be the Golden State’s fate unless lawmakers get serious about reforming two large portions of California’s budget—K–12 schools and Medi-Cal, which account for more than one-half of California’s General Fund spending.

Socialism has become a hot topic in the presidential election but that should not be a surprise. Governments in the US have long engaged in various shades of socialism. California is no exception.

For all its progressive talk, California often walks regressive paths. One example is the state’s paternalistic restriction on nurse practitioners (NPs), who are advanced practice registered nurses with post-graduate degrees. California is among the minority of US states, and the only western state, to require NPs to work under physician oversight. In doing so, California has effectively created a feudal system under which physicians get to earn unnecessary stipends even when patients don’t request their participation.

Medi-Cal is an entitlement to health insurance provided to low-income Californians. With 13 million customers, Medi-Cal is a voucher-type system funded by a combination of the state and federal government. Spending on Medi-Cal in the fiscal year starting July 1 is projected to be $102 billion, $23 billion of which is projected to come from the state’s General Fund.

Opinion  // Open Forum

Last month I turned 65 and became eligible for Medicare, the national health insurance program for people my age and older. Medicare is fantastic — and fantastically cheap — health insurance. But, believe it or not, if I were a retired California state employee, both I and my dependents would be entitled to health insurance subsidies.

In December I turned 65 and became eligible for Medicare, the national health insurance program for people my age and older. Medicare is fantastic — and fantastically cheap — insurance. But, believe it or not, if I was a retired California state employee, I would also be entitled to a state-provided health insurance subsidy that this fiscal year will cost taxpayers $2.6 billion — more than double the cost ten years ago.

Ten years ago, California’s Department of Social Services — whose mission is “to serve, aid, and protect needy and vulnerable children and adults” — received nearly $10 billion, which was 10 percent of the General Fund that year:

Now that Governor Brown has acted on all 1,217 bills sent him by the legislature, we are turning our attention to the 2019 legislative session. One GFC focus will be improving the quality of services provided Californians. Below is a overview of two of the most important services.

California has two state-operated enterprises (SOE’s), each with annual revenues of ~$100 billion: K-12 education, which serves six million students, and Medi-Cal, a single-payer health insurer covering 13.5 million low-income Californians. K-12 services are largely provided by public employees while Medi-Cal pays for services largely provided by private sector employees.

Start with $1,815.

Via a budget trailer bill signed into law last month, California has budgeted $5 million to establish a “Council on Health Care Delivery Systems” charged with developing a plan “for advancing progress toward achieving a health care delivery system that provides coverage and access through a unified financing system for all Californians.” Made up of five members, three chosen by the governor, one by the Senate Rules Committee, and one by the Speaker of the Assembly, the Council will start meeting in 2019 and must submit a plan to the legislature and governor on or before October 1, 2021.

California’s unemployment rate exceeds the national rate…

Lunch isn’t free.

California’s General Fund operates like a waterfall. Programs protected by constitution (principally K-12, community colleges, and debt service on General Obligation Bonds), statute (principally Medi-Cal, the state single-payer health insurer for low-income Californians) and contract (principally pensions and subsidies for retired employee health insurance) get first dibs on tax revenues. Only after those programs are satisfied do funds become available for unprotected programs such as UC, CSU and courts.

Health insurance is now California’s largest expenditure as a result of the expansion of Medicaid under the Affordable Care Act (Obamacare). Medi-Cal (the state’s version of Medicaid) now insures 13.5 million — 1 in 3 — Californians, making it the second largest single-payer system in the country. Spending now exceeds $100 billion per year, double spending in 2010.

Gov. Jerry Brown’s revised budget for 2018-19 predicts general fund revenues will be 30 percent greater than 10 years ago yet key services will receive less money than they did back then.

Retirees subsidized at expense of active teachers.

School funding in California is at record levels…

General Fund tax revenues in Governor Jerry Brown’s proposed budget for 2018–19 are expected to be 32 percent higher than ten years ago yet the same budget proposes only 9 percent more spending for California State University than ten years ago.

California’s largest health care system is a state-run single-payer system (“Medi-Cal”) that covers the state’s 13 million poorest residents, a population greater than all but four states. Service is terrible. Despite spending of $100 billion per year, appointments are hard to get, emergency room visits are up, there’s little indication of greater healthiness, and there’s even evidence than uninsured patients do better in some cases. Yet the California Legislature has not seriously tried to fix it. Indeed, in a twist worthy of parody by George Orwell, a Select Committee in the legislature recently proposed changes to other and even better-performing parts of the health care system but, with a single exception, not to Medi-Cal! Meanwhile, all that unproductive Medi-Cal spending is also crowding out funding for the needy, courts, parks, the University of California and California State University.

Every California legislator should read The Healing of America by T.R. Reid. An informative and entertaining world tour, Reid describes how health care models generally fall into four categories…

“Show Me The Incentive and I Will Show You The Outcome.”

Last month Berkshire Hathaway Vice-Chairman Charlie Munger reminded audiences that America’s health care problems are all about incentives. As he puts it, “show me the incentive and I will show you the outcome.” In the US, the incentive for health care providers — hospitals, doctors, nurses et al. — is to provide more services than necessary and not to address chronic problems. They make more money when people don’t get healthy. The outcome perfectly matches that incentive: US health is no better than the rest of the developed world despite spending twice as much per capita.

SB562 does not.

Here’s what Berkshire Hathaway Vice Chairman Charlie Munger had to say at the latest annual meeting of DJCO, another company of which he is Chairman, about health care…

But California needs 500 percent.

Governor Jerry Brown’s 2018–19 budget proposal prudently calls for filling the state’s Rainy Day Fund to its constitutional capacity of $13.5 billion. Doing so will “soften the magnitude and length” of budget cuts occasioned by the next recession, of which Brown reminds us there have been ten since World War II.

Actions speak louder than tweets.

Today California legislators are tweeting quotations from Martin Luther King. They should compare the objectives expressed in their tweets with the state of affairs for their constituents, starting with the six million children in California public schools and the 14 million customers of the state’s single-payer health care system.

Five pro-citizen issues should be on the agenda when the California Legislature reconvenes tomorrow…

It goes well beyond sexual harassment.

Sexual harassment by elected officials in California is all over the news but less visible forms of political immorality are just as prevalent. One example is that of state legislators who sell students, families and vulnerable citizens down the river to boost prison guard compensation. Another is legislators protecting the profits and turfs of cronies while ignoring the healthiness and convenience of 14 million customers of the state’s sub-functional single-payer system, Medi-Cal. Other examples include state officials opposing student civil rights and legislators robbing K-12 students and young teachers of their futures out of fear of powerful commercial interests.

Earlier this week the San Francisco Chronicle hosted a debate among the four announced Democrats for governor. Based upon the paper’s post-debate editorial, they left a big stone unturned.

Governor Jerry Brown just signed a bill requiring pharmaceutical companies in California to issue notifications at least 60 days in advance of a price increase that would be at least 16 percent over a two-year period and explain the reasons behind the increase. According to the San Francisco Chronicle, supporters of the legislation say it will discourage significant price increases.

California Speaker of the State Assembly Anthony Rendon established a Select Committee on Health Care Delivery Systems and Universal Coverage charged with determining (1) the method by which universal coverage in California could be financed and provided, discussed in an earlier post, and (2) how care should be delivered, which is the subject of this post.

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.

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. 

Hint: It’s not about health