The impending Schwarzenegger health care disaster

The big news this week is going to be the release of the Governor’s health care plan. Ordinarily, giving the Governor a shot and seeing what he comes up with would be the right thing to do, but you read it here first: this is going to be an unmitigated disaster.
This is a complex topic, but from my perspective there are two simple principles that any health care plan has to adhere to to have any hope of success. One is easy, and one is difficult:

First, get employers out of the loop. This should be the easy one: there isn’t a single employer in the United States that honestly wants to be in whatever business they are in AND in the health care provider business. This system barely made sense when it first started, and given the changes that have happened in the economy since then, it makes no sense whatsoever now.

There are two primary sources of political capital that are going to power reform in this area: the very high level of ambient citizen disgust, and – if someone makes the case to them – small and large businesses whose competetiveness is being harmed by the current system. Every last drop of political capital from both sources is going to be necessary to put the second and much more difficult principle into effect, which is:

Second, housebreak the insurance companies. They may need to be removed from the system entirely. It’s possible that any for-profit entity where providing care is a cost subtracted from the bottom line is simply never going to successfully provide care.

But maybe they can. I can imagine a system where cleanly regulated insurance companies do add value, by helping contain costs both on the demand side (through promoting wellness) and on the supply side (by being a countervailing power to the service providers) And given the political reality of where we’re at, making them go away completely isn’t going to happen soon. So regulating them, giving the marketplace some basic ground rules like stopping the cherrypicking of healthy customers, would be a great start.

Why the Governor is structurally incapable of getting this right is on the flip…


From a story in this morning’s SF Chronicle, regarding contributions to the Governor’s inaugural…

Contributions of at least $15,000 came from insurance giant American International Group, the California Hospital Association, Allstate Insurance and Health Net. Twenty-two donors from the health care industry provided the governor’s celebration planners at least $400,000.

Keep in mind that this half a million is just for the inaugural party. You don’t even want to know how much they’ve thrown down for all of his various campaigns, committees and slush funds.
There’s an inexorable logic behind the single-payer system: the easiest way for our society to shoulder the burden of people getting sick is to socialize the costs as broadly and fairly as possible through progressive taxes. Yep, socialize. Progressives have to make that not a dirty word in this discussion, because it’s the main fear-mongering word that gets thrown around in this discussion every time the possibility of real reform comes up. The fact is, the costs of health care are getting socialized anyway. The question is just whether we want a layer of corrupt and unregulated companies leaching profit away from care, or not, and the relentless name calling the forces of corruption use around this word doesn’t help move the discussion. If you hear a politician who is on the take from the insurance company say “socialized medicine” like it’s a bad thing, reach for your wallet.
This is a crucial social justice issue, and the LA Times op-ed linked to above has some interesting speculations (beyond insurance industry payoffs) on the origins of the Governor’s lack of moral clarity on this issue…

Schwarzenegger’s experience with health insurers is not your average citizen’s. Anyone as rich as he is doesn’t have to worry about medical expenses. He and his surgeon surely didn’t have to seek permission for treatment. They didn’t have to argue with a cost-control center demanding something cheaper — such as outpatient surgery. The governor won’t fear that his insurer will retroactively cancel his policy or double his premiums because of the surgery.

So is it the industry payola, or the appallingly stratospheric differentials in wealth in this country that lead to two completely different experiences in the health care system. Which is more nauseating?
Maybe we’ll be ready to move towards single payer once people realize how impossible this reform is going to be with the system as corrupt as it is, and maybe we’ll only be able to move that direction once we get clean money for elections in place. But in the meantime, it seems possible that someone in the elected leadership of this state could combine principles one and two and at least start nudging things in the right direction. It just seems clear it isn’t going to be this Governor.