When you fly from Washington, DC, to California, as I did several weeks ago, you always encounter headwinds. They slow the journey and often force the pilot to make unexpected course corrections along the way. My trip to the nation's capital convinced me that the process to health reform will follow a similar path — if a meaningful law can even get off the ground.
In Washington, I met with congressional aides, administration officials, policy analysts, and others. There is heady talk in the air — far-ranging debates at the highest level of government over how to expand coverage. Much of that talk is speculation about the hoped-for second- and third-order effects of new structures and agencies. Nevertheless, it is clearly a historic time in which there are ambitious plans to expand coverage, and some voices still hammering away at controlling costs. Most of these plans build incrementally on what already exists; they involve substantially expanding eligibility for Medicaid (and some for SCHIP) and preserving employer-based insurance.
But as I returned to California I was confronted with the reality of an economy in turmoil, a budget agreement that is already unraveling, deep cuts in Medi-Cal and Healthy Families, and more bad news to come. Once-ambitious local attempts to cover uninsured kids are crumbling daily; county governments, hard hit by the triple whammy to their principal sources of income (sales tax, property tax, and transfer tax) are probably only at the beginning of a painful, multi-year retrenchment.
As I write this in early August, some aspects of the health care debate seem eerily reminiscent of those in 1993, the last time major reform was proposed, and failed. Nevertheless, the situation now compared to then is in some ways better — fewer illusions about the capacity of a good economy or "managed care" to solve the problem of the uninsured — and in some ways worse, since the cost of health care is significantly higher, making any effort to expand coverage substantially more difficult.
I don't pretend to know what this latest "year of health reform" will bring. But from the vantage point of a foundation that engages deeply with providers, hospitals, government, insurers, payers, and patients in California, and with particular concern for the underserved, several things now seem clear to me:
Fasten your seat belts, the air war has begun. Over the next several weeks we will be deluged with advertisements for and against "real" reform, "true" reform, "Obamacare," and "protecting the middle class" (either by or from health reform, depending on who's paying for the ad). Interest groups will attempt to sway the media, public opinion, and through them, Congress. All of these ads will have a grain of truth, and all will substantially distort the real issues in play. Try not to get too distracted. This August air (and ground) war is mainly political theater — not unimportant, but mainly aimed at setting the stage for the policy debate and deal making that will happen when Congress returns and the inevitable differences between House and Senate bills will need to be resolved.
"Universal" will be more of a journey than a destination. I hope and believe that a major health care reform bill will pass this year. But even in the best-case scenario, our state's uninsured will not disappear any time soon. We didn't get into this situation in 8 or 10 months, and we're not going to get out of it that quickly either. In addition to the general affordability problem, California faces the specific problem of the undocumented. None of the major proposals would provide them coverage. So those who care for them will continue to struggle and will need to strive for the greatest possible efficiency in this unsung work.
The health care "ticket" has to be cheaper. The cost of flying to Washington and back has dropped over the past 20 years. Not only has technology allowed me to check my flight status from the taxi, but the cost of that mobile call has also fallen. Still, the cost of health care rockets ever upward. Health care has to be cheaper if it's going to be affordable for anyone but the wealthiest Americans and members of Congress. There are some (mainly those who derive their income from health care) who argue that it's society's moral responsibility to pony up the funds to buy people into our current system at its ever-rising prices. But their numbers are dwindling. That is, in part, because we're running out of people to stick with the bill. Efforts to bill "the wealthy," smokers, soda drinkers, and our children simply don't work. This foundation has put affordability as a principal aim of our work since its beginning — that work is more urgent than ever. And providers, regulators, advocates, and others who care about the insured and uninsured alike need to join in the necessary process of actually reducing costs (as opposed to searching for someone to pass them on to) so that those who need care can afford it.
It's about the delivery system, stupid. The political debate has recently shifted from "health reform" to "insurance reform." That's an understandable, but troubling, turn of events. There are surely savings to be had by reducing administrative expenses in health insurance, but the real reason that health insurance costs so much is that health care costs so much. And the key to reducing costs and improving quality is in the delivery system, not the insurance system. Focusing on insurance reform makes political sense, since your average voter sees the rising cost of care reflected in their insurance premiums. But this approach was tried in the mid-1990s when managed care health plans in California and nationally were supposed to use their market power to lower costs and improve quality. Didn't happen then; won't happen now.
In the end, it may not even be a "reform" bill that has the greatest long-term impact on the health care system. Ironically, measures passed as part of the stimulus package (health information technology financing, comparative effectiveness research, and support for electronic health records implementation) are farther-reaching delivery system reforms than tinkering with insurance markets.
Even if meaningful health reform is enacted in Washington, the journey will be far from over. The real consequences will be worked out in federal agencies and by state administrators across the country. And the unintended consequences will show up immediately. We'll have to figure out how to turn policy into actions that will increase coverage, while at the same time working to control the costs that will bankrupt us if we don't. There is still a lot of turbulence ahead.