Taking Aim at Health Care

The failure of the Legislature to approve major legislation to remedy the health-care crisis will now almost certainly force the issue on the ballot of November, 1990, with the likelihood that at least two measures will be before the voters.

California’s crisis, like the nation’s crisis, is measured in a variety of ways. There are 5.2 million Californians without any form of health insurance. Health-care inflation is overwhelming efforts to provide effective, affordable insurance. Cost containment remains elusive. Some basic services, including trauma centers, are deteriorating. Prenatal care, perhaps the single most cost-effective program, is not reaching all pregnant women, despite some improvements. Thousands of children are unable to receive basic medical and dental services. Many hospitals are in critical and declining financial condition because of the heavy burden of uncompensated care. The whole Medi-Cal system to serve low-income persons is handicapped by inadequate compensation for doctors and dentists and hospitals, which reduces the availability of care.

At the last session of the Legislature, two basic approaches were considered. One would have mandated that employers provide health insurance, a program that would have extended protection to about half of the uninsured. The other would have assured universal health insurance by a combination of state-directed programs. The best the Legislature could do was adopt a tax credit for businesses providing health care--to begin in 1992. In the wake of those failures, the two central concepts are being translated into rival initiatives for the 1990 general election.

The timetable for qualifying an initiative for next year requires formal filing by the end of October. Intense negotiations are now under way. There appears little likelihood of a broad-based agreement on a single ballot measure.

As matters stand now, the California Medical Assn. is leading efforts to draft an initiative based largely on mandating that employers provide health insurance. It reflects the proposals of Assembly Speaker Willie Brown in AB 350. It would envision some state subsidy to make the insurance more affordable.

The other leading provider organization, the California Assn. of Hospitals and Health Systems, is actively engaged with the CMA in drafting the mandated insurance initiative. Its initial collaboration with Health Access of California, a broad-based coalition seeking a more extensive solution, appears to have ended in disagreements over creating a new and powerful state agency to control health-care finance.

Health Access has been using as its model AB 328 by Assemblyman Burt Margolin (D-Los Angeles), which would assure health coverage for everyone in the state. It would be funded by a combination of existing federal and state revenues, payroll taxes, premiums and tobacco tax monies. A Health Plan Commission or elected state commissioner, a sort of “California Surgeon General,” would be created to administer the program. Minimum standards for health insurance would be set and premiums controlled. Rates paid providers for specific procedures and services would also be controlled. Citizens would continue to have options regarding the kind of coverage they purchased, including fee for service, preferred provider and health maintenance organization plans. The access initiative also would step into the most pressing problem of seniors, to provide long-term nursing-home care insurance, not now a benefit of Medicare.

The most significant unfinished business for those drafting the initiatives is cost containment. There is no question that any extension of health insurance without provision to contain the costs will invite a fresh surge of the already excessive medical inflation.

There is another caution that the drafters should observe. Initiatives are a poor substitute for legislation because of their rigidity, the difficulty of adapting them as times change. That risk can be minimized by providing for amendment by a simple majority of the Legislature.