Health Reform: Now What?

1. Health Reform: Now What? John Troidl, MBA, Ph.D California Public Health Association-North UC Davis March 14, 2008

2. Your moderator • MBA and PhD training relate to health services management and research • Serve on California Health Workforce Policy Commission. • Faculty, UC Davis Department of Public Health Sciences… teach in MPH Program. • Developed first online class “Introduction to Public Health” for the public health practice community…. Offered starting last Fall.

3. National Health Insurance • We’ve been debating this issue for 90 years!!! • The US is the only industrialized Western nation without a government guarantee that every person is insured for basic health care • Piecemeal progress in broadening national health insurance through Medicare, Medicaid, and Child Health Insurance

4. National Health Insurance • There has been five attempts in the past to legislate national health insurance: • 1912-1915 American Association for Labor Legislation Plan • 1946-1949 Wagner-Murray-Dingell Bill • 1963-1965 Medicare and Medicaid • 1970-1974 Kennedy and Nixon proposals • 1991-1994 Clinton and others

5. Principle Goal of National Health Insurance • Principle goal: Arrange universal health care financing • Three basic methods of financing health insurance : • 1) Government Financing • 2) Employment Based Private Insurance • 3) Individual Private Insurance

6. Government Financed National Health Insurance • Two categories: • Social Insurance • Only those who have paid into the program are eligible for the program’s benefits • Public Assistance/ Welfare Model • Focuses eligibility on a “means” test

7. American Association for Labor Legislation Plan (1915) • Prompted by 25-40% of people in the 1900s not receiving medical care • Designed to provide for lower income individuals, workers, and their dependents: • Medical care • Sick pay • Funeral expenses

8. American Association for Labor Legislation Plan (1915) • Program would be state run and financed by a payroll tax like contribution from employers and employees that went into a regional fund • Compulsory and covered a large number of people • Opposition from: American Medical Association (AMA), business interests, and elements of labor

9. Wagner-Murray-Dingell Bill (1943) • Focus on expansion of social security system introduced in 1935 • Financed by: Employer and employee contributions that flow into a federal social insurance trust fund used to pay hospitals and physicians • Permanently unemployed not eligible • President Truman supported the WMD, but the AMA defeated the bill

10. Medicare and Medicaid (1965) • The 1950’s were a period when less than 15% of the elderly had health insurance • Medicare approach: narrowed the WMD to coverage of people over 65 yrs of age • Financed by: social security contributions, federal income taxes, and individual premiums • Medicaid approach: a welfare model of insurance with no expected contribution by recipient • Financed by: general fund at the federal and state level

11. Kennedy-Griffiths Health Security Act(1970) • Goal: Combine the social insurance and the public assistance approaches into one unified program • Opposed by: the private insurance industry and the AMA

12. Single Payer Program (1989) • Approach: Puts the single payer at the state level, eliminating HMOs and private insurance companies • Merges social insurance and public assistance programs into one unified program • Failed to succeed

13. Employment Based National Health Insurance • Different proposals through the years: • 1) 1971 President Nixon’s alternative to the Kennedy and Griffiths Health Security Act • 2) 1993 Clinton Plan • 3) Tax Credits and Medical Savings Accounts

14. President Nixon’s Alternative to the Kennedy and Griffiths Health Security Act (1971) • Approach: Employment based, privately administered national health insurance • Federal govt would require all employers to offer health insurance to employees • Uses private insurance industry to operate the insurance part

15. Clinton Plan (1993) • Because of the increase in the number of people who were without insurance from 25 to 40+ million people over the 1970s to the 1990s, Clinton proposed a new plan • Employer mandate approach • Overstudied and overly complicated

16. Tax Credits and Medical Savings Accounts • Some variations on the employer mandate primarily involve voluntary employer approach • Includes offering tax credits to companies that offer insurance and encouraging firms to offer Medical Savings Accounts to their employees • Neither have gained widespread support

17. Individually Purchased National Health Insurance • 1989 approach: Federal government requires all US residents to purchase individual health insurance policies • Tax credits are discredited as a true national health insurance proposal • Most poor or even lower middle income families could not wait for their tax return completion to be drawn to the incentive of tax credit

18. Which National Health Insurance Plan is Best? • Single Payer Approach • Pros: • Universality • Simplicity (which helps reduce administrative overhead) • Employers relieved from providing insurance • Employees regain freedom to select own provider • Cons: • Invitation to bureaucracy • Care dictated by government • Waiting lines • Rationing • Government susceptible to wealthy private interests

19. Which National Health Insurance Plan is Best? • Employer Mandate Approach • Pros: • Easier to extend this program that covers people under 65 yrs old now • A way to avoid raising taxes substantially while providing more coverage • Cons: • Big burden on small businesses that can’t provide the coverage • Employer chooses provider • Changing jobs complicated by health insurance considerations

20. Which National Health Insurance Plan is Best? • Individual Mandate Approach: • Pros: • Employers freed from providing insurance • Individuals get insurance regardless of job status • No need to raise taxes • No burden on small businesses • Income tax credits are fair and effective • Cons: • Low income families can’t afford to pay for this • Inefficient to sell insurance coverage family by family • Difficult to enforce mandatory insurance • High out of pocket cost

21. What Happens if We Do Nothing? • We can’t do nothing! • San Joaquin Valley Clinics Warn of Problems From Medi-Cal Cuts: • Gov. Schwarzenegger has signed legislation that will delay Medi-Cal payments this summer, including about $60 million to clinics in the San Joaquin Valley. Clinic operators are trying to secure loans or other funding to stay afloat during the funding crunch, but some clinic officials say facilities might have to reduce hours or temporarily close. ---Fresno Bee.

22. Questions about Health Reform • We have asked our panelists to make their own presentations but also to be prepared to help answer these questions: • 1. What happened to health reform in 2007/2008? • 2. Do we have reason to be optimistic that some form of health reform will be taking place going forward? • 3. How do we get our hands around the hard question of "out of control" health care cost escalation? • 4. Are important constituencies being left out of the health reform discussion? • 5.  Should there be a greater "public health" aspect to health reform policy and planning...... to increase the effectiveness of health reform and to reduce its overall cost?

23. Our panel today • Our panelists are: • Richard Figueroa: Deputy Cabinet Secretary, Office of the Governor • Ellen Wu: Executive Director, California Pan-Ethnic Health Network • Sara Rogers: Consultant to Senator Sheila Kuehl • Dave Kears: Agency Director, Alameda County Health Care Services