Universal Coverage Will Take Universal Sacrifice

Universal health-care reform is back in vogue, but it will take sacrifice by every stakeholder in health care to achieve it.

Last week, Blue Shield CEO Bruce Bodaken called on California to enact a law mandating that every resident have health insurance; this would be done through a tax and by requiring that large employers provide coverage and that those who can afford insurance buy it. Labor unions and doctors are seeking state legislation requiring employers to pay for employees’ coverage or pay a tax that covers the uninsured. Nurses and progressives are backing a bill to create a Canadian-style universal health-care system.

The problem with getting universal coverage in the U.S. has always been the politics, not the policy. Insuring everyone is indisputably the most cost-effective system, because everyone pays less when all are insured; also, sickness is dealt with when it is cheapest to treat.

The politics that have doomed reforms have pitted insured against uninsured, patient against provider, employer against employee. The hope for a new political dynamic arises because the system is so broken that only radical change can save any one group.

California town hall meetings among key stakeholders produced three points of consensus about the problem: First, there is enough money in the health-care system to insure everyone, but it is being mismanaged. Second, cost inefficiencies in the market-based system are devastating all stakeholders except insurers, HMOs and drug companies. And third, more public control is needed for greater cost-efficiency and to coordinate the disparate public and private health-care delivery systems.

To reach a solution, the key players each have to give up something.

* Labor unions: Employers have responded to higher insurance premiums by limiting or eliminating employee health-care benefits. As a result, unions want to mandate that employers pay for insurance benefits. In this, they have common cause with insurers who would like nothing better than for every employer to have to buy their product. Rather than form a politically convenient alliance with insurers, labor must insist on cost-efficiency from them.

Labor also wants to retain insurance as an employer-based benefit because it is a bargaining chip. Unions should be open to moving the benefit away from the employer if that is in the best public policy interest of uninsured workers.

* Hospitals: Many good hospitals are withering due to insufficient and unstable payments from government and insurers. Some hospital chains, however, have been profiteering by working the system. In exchange for more stable payments, hospitals should agree to submit to a public process that determines standardized rates.

* Doctors: Some ethical doctors have been driven out of California by unethical HMO rules and insufficient payments, while some physician-run medical groups have made a killing. Physicians should open their books and allow the state to set fair reimbursement rates for all care.

* Nurses: The state’s largest nurses union has been one of the most ardent advocates for a Canadian-style health-care system, but it should consider another model if it can achieve similar cost-efficiency and limits on profit while being politically more palatable.

* Employers: Businesses have been hit with huge premium increases, but their fear of government bureaucrats has been greater than their fear of insurance bureaucrats. However, government regulation can hold down their premiums while protecting employee benefits. Employers must break ranks with an HMO lobby whose main solution for controlling costs has been cutting coverage.

* Insurers/HMOs: Insurers must agree to limits on profits and to strict government regulation of premiums and coverage.

* Patients: The middle class and upper class must recognize that the cure for unaffordable or unavailable health coverage is to support a plan that insures everyone.

While not all stakeholders will agree, the only hope for reform is that a critical mass will. An important measure of Gov. Gray Davis’ leadership will be whether he locks the right people in the right room at the right time.