No time for gobbledygook

San Francisco’s Mayor Gavin Newsom visited the editorial board to discuss his plan to provide care for every uninsured person in the city by the bay. Is it a bold new solution to the health care crisis or public policy disaster waiting to happen? Some highlights...

Crime numbers, population numbers and the bad census

Gavin Newsom: Our violent crime rates keep going down but the violence related to uh, gang activity and particularly drug-related activity is going up.

Jim Newton: How many homicides do you have a year in San Francisco?

Gavin: Less than 100 consistently.

Jim: Is that right?

Gavin: Yeah. Eight-five...

Jim: Is that up or down from last year?

Gavin: Yeah, kind of in the range. You know we’ve been consistently under a hundred for the last 15 years. Eighty-five last year. Ninety-six was the peak in the last decade. Uh, this year we’re pacing, uh, we were down 11% on homicides last year, which was an anomaly in the country. You know, most cities were either 1% or 2% down at most or — I mean if you’re, you know Philadelphia, or Boston, uh Atlanta; I was with Shirley Franklin, I had no idea, close to a 50% increase, she’s having a hard time — it’s starting to go up in the bigger cities. But this year that’s not the case. Our gang-related numbers are down. Black-on-black gang-related homicides have dropped 60.5% in the last four years. It’s a curious anomaly, that the area where we were having traditional problems is, has actually seen tremendous results. But in other areas — domestic violence, murder/suicides, again drugs, drug-related violence. Younger and younger people using the same weapons of war that are being used in Iraq; I mean just a proliferation of guns. Everybody knows that. But it’s, you know, 15-year-olds literally killing 16-year-olds. We had a 21-year-old who shot a six-week-old baby trying to kill his father. Uh, you know it’s exactly the headlines here, and I talk to Chief Bratton often at various events. And he’s been very helpful to us, which I appreciate. And we’re all sitting there scratching our heads trying to figure this out. Because there’s no rhyme or reason based upon sort of the macro-economic realities that have all been established in the past. Even the Freakonomics version that it was, you know, Roe v. Wade, uh, that dramatically reduced crime and violence in this country. You can’t, you know, can’t use those arguments right now.

Tim Cavanaugh: Is black-on-black crime declining along with pop-, with black population?

Gavin: Um that’s a good question. We are analyzing that. We just did what we call a drill-down and determined that our census data, like census data across this country, are so far off, now, as to be almost trivial and irrelevant. We saw that in the population there were close to a quarter of a million people more than what the census data showed us.

Tim: That would be about a million people in San Francisco. Traditionally it’s always 700,000 right?

Gavin: Exactly, just over 900,000. In fact next week I get the subset so I’ll know in the African-American community, if this African-American flight has been accurately reflected or it’s been overstated. And I imagine it’s not been overstated because we’ve lost our middle class, which is a great challenge we face, losing families generally: cost of housing, quality of public education, primarily choice: We have some outstanding public schools but we just don’t have enough of them.

David Hiller: Where does the black community move when it leaves?

Gavin: All over the Bay Area. The problem with San Francisco is, it’s proximity. So you’re just, you know, so many people commute in the size of the city practically doubles every day... There are tens of thousands who have left the city but still come in to enjoy the amenities...

And incidentally, that census number — and L.A. should be doing the same thing, and I hope they are — is profoundly significant in terms of state and federal dollars. We work out about $2200 a resident is the net benefit of actually having an accurate reflection of population, in terms of state and federal benefit that can be drawn down. California’s never been aggressive, incidentally, on the census data, as other states have... The census data is really questionable, at best, and it just becomes sacrosanct, it becomes gospel. And it creates a framework for governance in this country. It’s something we all need to be cognizant of...

Tim: How appealable is that, when you say “I know the census says this but we’ve run our own numbers?”

Gavin: Very much so. Particularly when they do the annual adjustments. When they do the annual adjustments you can appeal. We’re about to do ours. So states, many states do it. Particularly smaller states are aggressive, because they understand the game. Larger states like California don’t. We haven’t in this state been as aggressive as we should in terms of making, making the case for our population. That’s why I think all of these numbers, I won’t say all of them, but I question numbers all the time.

Health care

Gavin: It reached a point where I was fed up with my own party, the Democrats, because I’d been to too many of these chicken dinners and lunches and rallies, and everyone just sits there and says “Universal health care,” and everyone starts giving us a standing ovation. You know, five years ago everyone was saying “We’ll get rid of Rumsfeld,” and that’s sort of the new applause line. And you know, things just get worse and worse. And to pay, you know the stats in California: 6.5 million, 7.1 million, it depends on the sources. We had last year we estimated we had 140,000 uninsured.

Jim: A hundred and forty thousand residents of San Francisco?

Gavin: Residents. You know, without any health insurance. At the time. And this, you know it’s a very important point I’m making, because we had made up that number. That was a number we were given. That’s a number that was repeated, over and over. So it became reality even though it was fiction. We never really did — it’s like our population, we assumed the census number was right...

So here we’ve got 140,000 uninsured San Franciscans. Turns out, when we got Kaiser to do the actuarial work, it turned out to be only 82,000. All of a sudden our ability to think differently about the population changed. We said “What a second, maybe this isn’t unmanageable. Maybe there is a way of doing this. When I became mayor I ran on sort of policy platforms, and one of them was to expand healthcare to everyone zero to 25. People said it can’t be done; no city’s ever done it. You’ve got huge deficits. We did it. We proved it can be done, without raising taxes.

David: What did you do?

Gavin: We provided health care to everyone zero to 25. The first year I was in office. So we had a framework...

David: How did you do that?

Gavin: We just did it. General fund. Drawing down state and federal dollars...

David: For, for a part of that 82,000?

Gavin: Yeah, well at the time we thought it was 140,000. Biggest percentage we estimated were 19- to 24-year-olds. We had estimated 44% of them were uninsured. And that was the argument: emancipated youth, transitional youth, have been a focus, a real focus of mine. But it was insurance. And it was very costly. It’s a big line item for us. The idea of doing it for everyone else we just couldn’t figure out how to do it. We convened a big group and we had a new number now.

So we thought, all right, this population is more rational in terms of our ability to provide that. But nobody could answer the question until we asked a profoundly different question. We asked what, instead of providing universal health insurance to all our people, we said how do we provide universal health care to all our people. And that question, by definition, elicited a different response. Health care, not insurance. And we came up with this new program called Healthy San Francisco, where we actually are providing health care to all San Franciscans who remain uninsured. And the benefit of that is the eligibility as a county and a city to draw down state and federal dollars, because these same people who are in our health plan are still uninsured, and eligible for a lot of these state and federal dollars.

Jim: So how does that work? I’m a resident of San Francisco, of whatever age now, and for whatever reason I don’t have health insurance. How do I go about getting a checkup? How do I...

Gavin: You’ve got HIV or AIDS, you’ve got prostate cancer, breast cancer, you have a pre-existing condition, doesn’t matter. You’re a resident of the city, you prove your residency, very easy thing to do. Come down, you get a medical card.

Jim: To City Hall?

Gavin: To City Hall, right now we’ve got 27 sites, 22 clinics, 27 sites, or City Hall, our health department. Go down, prove your eligibility. You have to apply, one of the requirements is you have to apply — and this is a big part of drawing down benefits for people who are not necessarily aware that they’re eligible for benefits — you’ve got to apply for state and federal programs. Once we determine your eligibility, you get, and part of our San Francisco health plan is a non-profit wing of the city. But it’s not part of the city. It’s a non-profit that already does our Health Kids, Healthy Families, Healthy Workers, zero to 25. And IHSS, our in-home support service workers, and others. You get a medical ID card, you get a medical home, you get a list of benefits; same quality care that I have with my health insurance. The only downside is it’s not portable. That’s the difference between the insurance and the health care. You can’t bring it down to L.A. with you.

But the bottom line is in the city it works; you have the same provider network. Right now it’s limited. It will expand to a network that includes UCSF, Kaiser and others. Right now it’s within our clinic consortium. Mostly private non-profits, not public, so it’s not socialized medicine as the cliché, um, is advanced. We’re currently enrolling people up to 100% of federal poverty. The initiative is based on people’s ability to pay: 100% of federal poverty, there’s no monthly premium. Hundred to 300% it will blend to about $50-60, nothing. And then above that, 300% to 500% it’s a hundred-fiftyish, and then above 500% of poverty it’s $201.25; it caps there. We’re phasing in zero to 100% of federal poverty first. January we’ll start 100% to 300%. By June of next year, we’ll have half, over half, close to 50,000 folks enrolled in our program. And the rest within, we think, six to nine months after that. About $200 million annual cost — substantially less than, again, we imagined. About $196 million this year. Of that, $104 million comes from existing sources. And remember, right now all of us are paying for these people. We’re just paying for them in our community clinics and in our emergency rooms. So we’ve converted basically the acute care environment, not necessarily to primary care but to a long-term care environment.

Jim: So are you seeing the savings?

Gavin: Well we don’t know yet. We haven’t been able to quantify yet. Just happened a few months ago that we started. So we’re redirecting a $104 million. Folks that are coming to the clinics now get this stability and this connection to a larger narrative and a larger system. They have more choice. They’ve got their medical home, their medical card. They’ve got all the quality care with one exception; that’s dental. But that’s hard even for the care that I have. I’m paying a lot more in dental. But all the specialty care is there, preventive care, all the lab work. So $104 million’s there; $56 million comes from individuals in point-of-service fees, which are these co-pays and monthly premiums based on ability to pay.

And the rest comes from — and here’s the controversy, and this, there’s always gotta be a controversy with health care — there’s a mandate to businesses, starting with businesses with 50 employees or more. Incidentally, those represent, the mandate will represent only 13% of the businesses in the city, because 87% fall into the category of 50 employees or more or they fall into a category where they don’t already provide a baseline of services. So you’re affecting about 13% of businesses above 50 employees or more that aren’t necessarily investing in the health care of their employees. It works out to a de minimis cost of the overall $196 million. It’s about $28 million, the business mandate.

The reason we have a business mandate, again, is for no other reason, it’s not intended for the money so much as to create a floor of expenditure. Here’s the reason: I’ve got about 19 small businesses I’ve created, started restaurants and hotels. If the city said, as I have, that we’re gonna take care of health insurance, I’d say fantastic. I’ll dump all my health care; city picks it up. Then our uninsured population goes from 82,000 back to 190,000, 200,000, 300,000, and the system collapses. So we create a floor so there’s no dumping out. And this is the controversy. The restaurant association, of which I’m a former member and large contributor with our nine restaurants, have sued us. And we’ll see if they’re successful. And if they are we’ll have to be more creative.

Tim: Well what happens when, I mean you have a large number of people in San Francisco who live in the city and commute down the Peninsula to work at a dotcom somewhere. And some of them are making, well wait: If you’re at 500% of the federal poverty level — what is federal poverty?

Gavin: Zero to 200% is $19,600. Zero to 100%, for a family of four, $21,000; $10,000 for an individual.

Tim: I mean, potentially you could have dotcommer making a hundred grand a year and getting city-funded health care.

Gavin: That’s right. As a resident of our city. Of course, the reverse is the real reality, the majority of those folks are people who commute in and are not residents of our city and are employed. And we’re not covering them.

Tim: Well it’s hard to tell some mornings on the 101 south, which way the traffic is going.

Gavin: Well look, I make no pretense of the perfection of this program. It’s never been done. It’s a question of accountability and responsibility rather than abdication. We said, look, in the absence of state and federal leadership we’re going to do something. Learn from our mistakes; others will learn from our mistakes. We’ve proven everybody wrong who said you can’t do it zero to 25. And we’ve got a capacity in the city that we developed during the HIV/AIDS epidemic. And we have the ability to build off of that, to convert that fragmented system and convert it into a coordinated system. And what’s important to me is that we’re taking a market dynamic and instilling it within this fragmented system. From my perspective as a former business person, that’s what the health care industry needs more of, as opposed to just government-run emergency room and city clinic support.

Robert Greene: You have about 2,000 people enrolled now, is that right?

Gavin: Yeah, we’re about 2,300 right now. Just started.

Robert: And do you have healthy people in the system now?

Gavin: Oh yeah.

Robert: And do you make an effort to go out and get them?

Gavin: Yeah, right now, we’re, we started in the immigrant communities; it’s interesting. Our first focus was the Chinese community. We started clinics in the Chinese community. You’ve got folks who are very healthy, 50 to 60 years old. We didn’t want to overload the system. But it went so well in the first few months that now we’re starting to market it. We just started a few weeks ago to market it: healthy, unhealthy, doesn’t matter to us. Now that’s gonna be the true test. If I’m back here this time next year, is the true test. Right now it’s going extraordinarily well — to the degree that, truly, internally all of us are looking around and saying what are we missing here?

David: How would this scale if it were done statewide?

Gavin: We have to look at the capacity of our clinics and see how we can expand. We tend to focus on what’s happening in our community. If you go down to Mission St. you’ll see little boards on the street saying, you know, $25 for this, $50 for that. You’re starting to see more of this prescriptive market being developed, doctors saying I’m going to start providing for this. People without health insurance: it will cost you this for an eye exam, this for a pap smear. And starting to build on the capacity. On the clinic capacity in your county, in L.A. County and elsewhere.

That’s been the great challenge for us, to build that just within the city. If you start building that within the state, then I think we can have a very different dialogue than we’re having now, about single payer this or that. Having immersed myself in this for seven years, it scares the hell out of me that politicians are making choices at the state and federal level. Because I know what I don’t know, consuming myself with this. Folks are negotiating, four or five folks in an assembly for an entire state. I know what those other politicians don’t know. I’m not being critical, just saying Boy, we’ve got to go into this with our eyes open and know we’ll have to make adjustments quickly...

Robert: Do you buy the argument that San Francisco is exceptional and can have few lessons for the rest of the state?

Gavin: No, I think that’s gobbledygook; it’s a limiting belief. I mean, I could have made that excuse for this, said we’re just a city, what can we do? On everything. I mean look what we’re doing on education, look what we’re doing on health care...

Tim: I mean you really think the lessons from a seven-by-seven mile area that contains one of the most massive concentrations of wealth on this planet is exportable even across the bay?

Gavin: Yeah, but with different conditions, different strategies. Yes, absolutely. I mean, counties — I don’t look at the cities, I look at the counties — on a county-by-county basis there is absolutely a framework that can be built. That doesn’t mean it’s precise; not even close. But there are components of this that I’m absolutely convinced can be done.


Jim: Have hurt your ability either to be mayor or to be a candidate for higher office by the personal troubles in your life this year?

Gavin: Yeah, but I mean, I was dead right on gay marriage. And this health care think could be a big debacle. But I hope to have 150 things that I’ve done. One of the things about being mayor of San Francisco is to be audacious and take big chances...

Ta-DAH: the homelessness solution?

Tim: One other issue on which you may have some lessons for L.A. is homelessness. And that’s kind of the issue you got elected on the first time. Where do you stand with that now? What’s been the savings to the city?

Gavin: Dramatic shift in our approach. Moving away from how we solve sleep to how we solve homelessness. Getting out of the shelter business. The worst thing we did in this country — Giuliani, everybody has been responsible for this — was moving aggressively to solve sleep by building shelters and assuming that we have somehow solved the issue. Shelters is not a homeless strategy. And by the way I was part of the problem seven years ago. I was like “Ooh, we gotta build more shelters.” I’m embarrassed. We’re getting out of the shelter business, and we’re getting into the housing business. You’ve got to stabilize people, then you focus on the underlying causes of why they’re out on the streets in the first place. So that in itself is not the solution, but the stability allows you to address they underlying issues, the drug and alcohol issues, the educational issues, the physical ailments that exacerbate those conditions. We call it Direct Access to Housing, the DAH program. It’s being tried all over the country. It’s being funded disproportionately now, through HUD, which we’re very proud of. It’s their approach...

We’re moving away from this continuum of care that made everybody feel good and sound good, but again, a wasteful system, fragmented system. Its intent was not to be fragmented. The intent was to get you into a drop-in center, stabilize you by getting you to shelter, then we’ll move you to transitional housing, then supportive housing, then permanent housing. Sounded great. Our approach: Instead of getting you into a drop-in center we get you into permanent housing. We skip all that, the 32 people and all the costs of that, the car reimbursements, the rent reimbursements, and we get the cost savings, and we have dramatically improved the conditions: 38% decline in the street population. That doesn’t mean that you come into San Francisco and that’s not your Number One complaint, cause there’s still thousands of people still on the street, 2,771 as of our last count.

Jim: How do you do that count?

Gavin: It’s completely — I mean, thank you for the question — it’s anecdotal. We had 500 volunteers this year, because two years before we had 250, and our count was lower, and the Coalition for the Homeless was outraged that we got a lower number. They said it’s not lower, it’s higher. And I thought, you should be celebrating because it’s lower, but fair enough. So they brought all their volunteers this time and again they showed that it wasn’t as high. And they’re still upset, and they said we’ll get a thousand people to do outreach! So we do every shelter, every drop-in center, the jails, streets, parks, playgrounds. The most comprehensive outreach we’ve ever done.

Tim: Now are you saying Care Not Cash was the model you had to move away from? Wasn’t that all about transitional...

Gavin: No, we were giving $410 and trying to buy our way out of the problem, and congratulating ourselves because we’re so compassionate, because nobody else gives $410. Well that was comedic because who can afford a unit for $410. So we took that, aggregated that money. We’re bulk-purchasing rooms, managing rooms in SROs, taking advantage of the economies of scale by taking tens of millions of dollars that were going to cash, using it to pay for these units. We have behavioral-health roving teams, we have social services and case managers who come on site. And we connect the dots between the services and the people in the housing. So these are outcomes, we have actual numbers, audited numbers: 89% decline in the caseload, we had — this is fascinating — a 97% retention rate, people staying in the units for a year. Housing first, wraparound services. This is the service-resistant population, the folks everyone said: They’ll never go into the shelters; they prefer to be out on the streets. This was our excuse: They prefer it. Gobbledygook. I mean one out of every 1,000 contacts — it may take you 30 contacts — but one out of 1,000 may prefer living in a park, but that’s — and I’m still convinced we’ll get to that one person eventually.