Commentary : Four Ways to Look at Deukmejian’s Employee Health Insurance Plan

Those of us in the trenches have seen our ability to care for patients significantly eroded by policies of the Deukmejian Administration. Therefore, I welcome the governor’s recognition of the plight of California’s uninsured and the debate that his insurance proposal will engender. However, with regard to the actual plan, I have many doubts centered mainly around its exclusion of certain groups and its economic feasibility.

The plan misses a lot of people. It ignores entirely about 20% of the uninsured: students, the homeless, and unemployed or retired persons. A way should and can be found to include them.

The governor’s plan also will cost too much. Even with tax credits and subsidized insurance premiums, small businesses and low-income individuals will bear large burdens. But beyond that cost is the cost to society: billions more dollars beyond the billions already spent in this state on health care. This will inevitably lead to increased production costs for industry, higher taxes and a siphoning of resources from other essential areas like education or public works. Medi-Cal is already the single largest component of the state budget. Can we afford to spend more on Medi-Cal and private insurance? I would argue that we cannot. I would also argue that we can deal with this problem more efficiently and without extra cost.

Before he moves this process further, the governor should take a serious look at the proposal offered by the Physicians for a National Health Plan (PNHP). The governor’s plan to control costs is to offer Medi-Cal as an option to individuals when health-care costs exceed the cost of living. Medi-Cal pays much lower than prevailing rates, however, and most doctors won’t see Medi-Cal patients even if reimbursement is increased 15%. Besides, doctors don’t control a large part of health costs, particularly the cost of new technology and administrative overhead.

The PNHP suggests a look at the entire health-care system and a restructuring along the lines of Canada’s national health plan. The Canadian plan is viewed as very good to excellent by 80% of Canadians. The Canadian system consumes only about two-thirds the cost per person spent in this country. Saving occurs by authorizing the provinces to be the sole payer for health care. This makes available for direct health-care services the 12% of every health dollar that would otherwise go to insurance companies and provides that the Canadian provinces, as the sole payer, can negotiate effectively with physicians and hospitals to control costs.

The PNHP proposal for a national health plan calls for single-state demonstration projects. I urge Gov. Deukmejian to lead California into this bold venture.