State senate votes single-payer system

Kern legislators oppose bill, while RRH CEO voices skepticism

Rebecca Neipp

News Review Staff Writer

State senate votes single-payer systemJust weeks after a Republican-led congressional initiative to repeal the Affordable Care Act squeaked through the House, the controlling Democrats in the State Senate responded by passing SB 562 to put California on the path to a single-payer healthcare system.

With the exception of one Democrat opposing, and three who did not cast votes, the state measure moved forward along partisan lines.

Proponents point to the initiative as the first necessary step in establishing universal health care — which legislators cite as a priority among the majority of Golden State residents. Supporters say that such a program would increase access to the poorest residents, and potentially eliminate administrative waste.

Meanwhile, those in opposition cite California’s poor track record of successfully managing government programs, the unknown consequences of eliminating competition in the marketplace, and most of all, the lack of funding identified to cover the estimated $400 billion cost to taxpayers.

“Single-payer health care will create a government-run monopoly and cost taxpayers an additional $200 billion,” said State Sen. Jean Fuller. “Everyday Californians will pay more for less under this half-baked government power grab.”

Assemblyman Vince Fong expressed similar concerns about the cost — which he noted is more than twice the size of the entire state budget.

“This is a lose-lose for everyone — Californians will pay astronomically higher taxes for a DMV-run healthcare program. I will do everything in my power to fight this ill-conceived proposal, which will drive families out of the state.”

Rob Lapsley, president of the California Business Roundtable, lumps SB 562 with a series of job-killing bills coming out of Sacramento that threaten to further undermine economic stability.

“Our debt liabilities are more than $250 billion, we are the highest taxed state in the nation and too many Californians continue to struggle daily with how to make ends meet,” he said.

While the nation and the state continue down diametrically opposed paths, each bill has stirred up criticism — much of which has originated from opposing partisans. But healthcare professionals, including Ridgecrest Regional Hospital CEO Jim Suver, have voiced concerns about the practical implementation of both federal and state initiatives. (See related story,

Suver said that he was not surprised by the recent legislative action. He observed that there has been broad support for a single-payer system since he first entered the healthcare industry in 1986.

“So this time it actually got codified,” he said. “From a 30,000-foot level, I’m not sure this is as draconian as some people think.”

He pointed to the fact that Medicare spends about 2 percent of every premium dollar on administrative costs, compared to 15 percent of insurance companies — which must pay out dividends on top of paying for overhead. “Just in terms of efficiency, there is certainly a benefit to reducing that margin and applying it to patient care.”

But from a practical standpoint, he said, health care reforms that have been implemented over the years have demonstrated that projected cost savings never materialize as they are predicted. One of the drivers in this disparity is the fact that as access to health care is increased, the use of services — along with associated costs — goes up as well.

“The other risk we have to consider is that as a provider, I can drive down some costs by negotiating between different insurance companies.” Under a single-payer system, hospitals and clinics will not necessarily have a way to ensure that the revenue they are collecting actually matches the cost for delivering services.

There are other challenges he anticipates, such as the government compensating providers for an “average” cost — which will hurt those in areas where delivery of service is more costly. RRH — being located in a state with a high cost of living and a remote area — is in a high risk group for being under-compensated for services, which ultimately threatens sustainability.

Conceptually, it is worth finding a way to level the playing field, he said.

“I think what might slow this down is the realization on the part of our legislators that we really have no way to pay for this.”

Additional updates will be reported as developments arise.

Pictured: State Senator Jean Fuller

Story First Published: 2017-06-09