Seeking the Right Prescription for Health Care : Policy: Local residents unfortunately rarely hear or debate the alternatives.

<i> Chauncey A. Alexander is professor/lecturer at Cal State Long Beach and founder of the Health Care Council of United Way</i>

Health care arguments have become the “Theater of the Absurd” as the contest for the minds of the public nears congressional action.

The Clinton health plan, with its “managed competition” approach, puts a bold face on moderate administrative changes, while congressional legislative siblings foster media battles over lesser Band-Aid measures.

Meanwhile, California’s frustrated consumers are trying to deal with the system, not the symptoms, via the State Single-Payer Initiative, Proposition 186.

Unfortunately, Orange County residents rarely hear or debate genuine system alternatives. Take, for example, the “employer-mandate” controversy. Arguments range from opposition to required participation. Local residents do not realize they pay anyway since business costs are normally transferred to consumers.


No matter where the eventual compromises lead, employer participation will be required because it’s the system we have. It was World War II, with its wage and price controls, that stimulated employer health plans as alternative salary compensation.

Simultaneously, 17 million Americans experienced a universal health care system in the military, creating advocates for universal health services.

Unfortunately, universal health care proposals by President Harry Truman were defeated by a vitriolic campaign of the American Medical Assn. Later, wage and price controls by President Richard Nixon in the early ‘70s cemented this deferred wages pattern into place.

In Orange County this meant that large employers with employee health plans inherited the cost-shifting of the ‘80s, the triple play from federal to state to county to hospitals and physicians. Most local small businesses with no health plans, in effect, transferred the health care costs of their “working poor” via increased provider fees to insured employees.


This cost-shifting effect was exacerbated by elimination of Orange County’s public hospital by the Board of Supervisors through sale to UCI Medical Center in the ‘70s.

This government and small business cost-shifting, along with increased privatization of health services, made Fluor, Rockwell International, TRW and other major Orange County employers the local “health philanthropists.” Their costs went to more than $4,200 per employee, among the highest in the nation.

Many large employers sought relief through tightly restricted contracts with HMOs, physician groups, or by direct self-insurance negotiation with hospitals and physicians. This brought some temporary relief but did not alter the basic system of fragmented services, crowding of hospital emergency rooms, escalating costs and unserved thousands.

So “employer mandates” was born out of the partial system we built for ourselves. Orange County residents have not realized the burden health care administration and its consequent distractions puts on businesses.


Think of a system where businesses are relieved of this burden. Costly administration does not contribute to the widget production of a company. Millions of hours and billions of dollars expended in the employer-based system could be released to increase the productive capacity of Orange County businesses for competition in today’s international markets.

Obviously, employer health administration would have to be phased out by a new system. The Clinton health proposal is a very modest start. California’s single-payer initiative is a more cost-effective step, though not the final remedy.

Eventually, direct payments to health providers from a designated Health Security Fund financed by a progressive tax, from 4% to 7%, will allow the U.S. to achieve its claim of “the world’s best health system.” And, at less cost and with no need for in-between paper pushers.

Someday there will be no one between Americans and their health services when the human right for good health is adopted.