News Headlines Article

Another Voice: Speaker Rendon made courageous decision to delay action on S.B. 562
OP/Ed by CHA CEO, C. Duane Dauner: Sacramento Business Journal

Senate Bill 562 would upend California’s health care marketplace and replace it with a government run system.

The decision by Assembly Speaker Anthony Rendon to delay action on legislation that would upend California’s health care marketplace and replace it with a government-run system was a courageous act of leadership rarely seen in today’s polarized political environment.

Senate Bill 562 is a sweeping legislative proposal that would change how all Californians access and pay for their health care services. Under the bill, employer-sponsored health coverage would disappear. Gone too would be programs such as Medi-Cal, which covers one out of every three Californians including 4 million children. Even seniors would be affected, since the Medicare program as we know it would be eliminated in California.

Yet, despite the far-reaching nature of this proposal, S.B. 562 lacked fundamental, essential details. There was no mention of how this new state-run program would be financed, nor was there any discussion on how the delivery of care would be impacted. Also noticeably absent from the legislation was any mention of how the state would keep health care costs under control or what government officials will do to encourage continued improvements in patient safety and quality of care.

As Speaker Rendon said in his press statement, S.B. 562 is “woefully incomplete.” There are too many unanswered questions and unresolved issues for this bill to move forward this year.

The state Legislative Analyst’s Office, a non-partisan advisor to the Legislature on fiscal and policy matters, pegged the cost of S.B. 562 at $400 billion annually. That is more than twice the size of California’s $183 billion state budget, which funds public schools, community colleges, the University of California and California State University systems, public safety and roads in addition to health care. S.B. 562 would take all of that money and still be short by approximately $220 billion. Yet, the legislation provided no specific financing plan other than to say that new taxes would be needed and that existing state and federal funding for health care would be redirected to cover the costs of this single-payer, state-controlled system.

The notion that the Trump administration and the Republican-controlled Congress would allow California to redirect billions of dollars of federal money toward a state-run government health care system is questionable. And given the controversy over the Legislature’s recent, narrow passage of the $5.2 billion annual gas tax increase to fix California’s aging roads and bridges, it is unlikely that the state’s elected officials or voters will eagerly embrace a much larger (more than $200 billion) tax increase in the near future.

Rushing forward without a thorough and thoughtful plan puts all public services at risk: our schools, roads, public safety and existing health care services.
The issues raised by S.B. 562 are important. How do we ensure that all Californians have equitable access to affordable, high-quality, medically necessary health care? How do we ensure that the latest medical technologies and advances in the delivery of care are available to everyone in need, regardless of their income or employment status? How do we reduce bureaucracy, improve quality and patient safety, increase efficiency and reduce costs? What would be the impact on Californians if we became the only state to enact a single-payer system?

While the questions are important, the answers are even more crucial. The answers aren’t easily apparent. What is obvious is that S.B. 562 would simply shift the financing of health care into an underfunded, budget-driven public system without a financing mechanism.

California hospitals have long supported the goal of universal health care coverage. This goal can be achieved without a government run, single-payer system that takes control away from patients and providers and puts it in the hands of state officials. Universal coverage must be a shared responsibility among all stakeholders in order to succeed.

Speaker Rendon was right to focus on ensuring that the appropriate time will be invested so that any resulting plan will achieve the goal of ensuring access to affordable, high-quality health care for all Californians. His decision to put reason and practicality ahead of politics is the mark of a true leader. Hopefully, through evaluation, debate and compromise a system can be enacted that builds on the good things in health care and addresses problems that are well recognized.

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