In favor of California single-payer health care
With chaos and uncertainty reigning in Washington over health care policy, and tens of millions still struggling with lack of health coverage or excessive out-of-pocket costs, nurses and activists in California continue to press for real reform, a Medicare for all type bill, SB 562.
In Washington, the GOP appears at best divided, and at worst clueless. Day to day the story changes. Is the bill repeal and/or replace? Stalled, dead, start from scratch, or to be resurrected? In what form?
Bad enough that premiums continue to rise, benefits and plans more complex to manage, and drugs keep costing more. Adding to the fundamental disadvantage payers of health care face when up against the market power of insurers, hospital chains, and prescription drug companies, is the instability of the existing policy environment.
In health care policy, those factors businesses value most — stability, predictability of costs, efficiency, an end to burdensome administration — can be best achieved in California if we take control of our health care system finances through a 'single-payer' that will guarantee health care for all Californians.
In endorsing a single-payer approach, Nobel Prize-winning economist Professor Angus Deaton has called health care spending the worst example of 'crony capitalism.'
Major Republican donor Charles Munger, vice-chairman of Berkshire-Hathaway, has called for single-payer health care financing due to the 'competitive disadvantage' our present system creates for US companies.
In California, taxpayers pay 70 percent of the $368.5 billion in personal health care expenses. We are just not getting our money's worth. Huge tax subsidies support employer and individual purchase of private health insurance.
Without those tax subsidies, do the health insurance companies have a viable business model? Likely not, but so far it's working for them: since 2011 the top health insurers booked $27 billion in net income.
Businesses legitimately ask what value they receive for the 20 cents on the dollar that goes to insurers' administration, profit, and marketing. Particularly since those profits derive from denying care.
Fortunately, in California there is an alternative to the tax-subsidized, inefficient, and wasteful insurance-based financing approach: SB 562, The Healthy California Act.
Championed by nearly 400 hundred organizations, led by nurses, doctors, and advocates, including the Business Alliance for Healthy California, SB 562 would replace all insurance company premiums, deductibles and co-pays.
Rather than negotiating with health plans or third party administrators, businesses would pay into the Healthy California Trust Fund, which then reimburses all providers based on Medicare rates and per capita payments for all covered services. Those include dental, vision, all medical, mental health, disabled services, and expanded long-term care, and within two years the medical portion of workers' compensation coverage.
Under the current proposal, the Trust Fund would channel all current public financing consolidated with the new financing from businesses and individuals.
In a recent study, economics professor Robert Pollin, of PERI at University of Massachusetts, Amherst, detailed a proposed financing plan that would save small businesses who now provide health coverage 22 percent of their current payroll costs. Medium-sized businesses would save between 6 percent–13 percent of payroll, and large businesses who currently pay substantially for benefits, would save 0.6 percent–2.5 percent of payroll.
In total, the cost of covering all California residents, including those with 'under insurance' (deductibles of $2,000 a year or more) and the 2.7 million uninsured, would go from $400 billion under the present system to $331 billion under single-payer financing.
As a result of the savings achieved through single-payer financing, Healthy California is able to cover everybody, establish a universal standard of safe, therapeutic care, provide complete choice of provider, and improve the clinical environment for nurses, doctors and other providers.
Those integrated health care delivery organizations, community clinic consortiums, and county health systems, as well as all existing private providers, remain organized as they are, and may receive per capita payments.
Publicly financed. Mostly privately delivered. Robust public health systems.
The greatest benefit of Healthy California to businesses and individuals is an end to the anxiety and instability of our present 'non-system.' Yes, we can have peace of mind when it comes to health care: SB 562.
CORRECTION: Charles Munger is vice chairman of Berkshire-Hathaway.