California's Health Care Crisis

California's broken health care system needs fixing. In spite of a booming economy and swift advances in medical science, millions of Californians are without the health care they need to live decent and productive lives. The state's two largest metropolitan areas, Los Angeles and San Diego, are among the nation's worst in terms of percentage of non-elderly residents without health insurance (see accompanying chart).

Nearly a quarter of all Californians, at least 7 million people, lack health coverage. According to a study released in January by the UC Berkeley Center for Health and Public Policy Studies, the number of uninsured residents continues to rise by 50,000 per month.

Ethnicity, poverty and lack of health insurance are clearly linked. Latinos, who are expected to emerge as the state's single largest ethnic group in the next 25 years and who hold many of the worst-paying jobs, have the highest rates of uninsured, and the lowest rates of employer-based insurance coverage. African Americans and Asian Americans fare better than Latinos but still fall behind the white population (for details, see accompanying chart).

The Trouble with Medi-Cal

Medi-Cal, California's version of the federally-funded Medicaid program, is supposed to take care of those without insurance. However, confusion and fear provoked by recent changes in welfare policies have conspired to drive people away from the benefits they are entitled to receive. As the state's economy improves and its welfare rolls drop, many people moving off welfare do not realize that they may still qualify for Medi- Cal benefits. Medi-Cal participation also suffers because many immigrants believe that enrollment in the program will put them at risk of harassment or deportation by the Immigration and Naturalization Service (INS).

Immigrants' reluctance to sign up for Medi-Cal has been fueled in recent years by a now-suspended California Department of Health Services (DHS) program called the "Public Charge Lookout System." Under this program, as described by The San Jose Mercury News, "the state began pressuring legal U.S. residents, even citizens, to pay back Medi-Cal benefits they were legally entitled to receive, or risk having their relatives' visa applications rejected.... The (DHS) initiative has spurred many legal immigrants to avoid prenatal care and drop their children from Medi-Cal rolls."

Medi-Cal is a bureaucratic nightmare. Medi-Cal eligibility must be renewed every three months and the process requires extensive record-keeping and paperwork. The new Healthy Families Program, intended to bring Medi-Cal to over a half million children living just above poverty, suffered from significant under-enrollment in its first year. Its 28-page application form intimidated potential users and included questions that provoked many immigrant parents' fears.

Some progress is expected on these problems in the year ahead. The State Department of Health Services is spending $18 million in federal money to help people understand their Medi-Cal eligibility in the wake of welfare reforms. The INS, in a flier to be distributed to Medi-Cal and Healthy Family applicants, is telling parents that they will not be penalized if their children receive health benefits. And study groups convened by state agencies are working on reducing the Healthy Family application form to a more manageable size. However, none of these measures is likely to make a major dent in the massive numbers of people who are not insured or otherwise unable to receive treatment they need.

The Power of the Health Care Industry

While few would deny that California desperately needs a health care fix, solutions are neither simple nor easy when the billions of dollars that the nation and the state spends on health care are involved. The stakes are clearly indicated by the massive amounts insurance companies, HMOs, and their allies devoted to fighting new regulations for managed care at the federal level in the first half of 1998, the latest period for which information is available. Their $60 million in lobbying expenditures, $112,000 per member of Congress, exceeded by almost four times the approximately $14 million spent by medical organizations, trial lawyers, unions and consumer groups to lobby for the patients' bill of rights in the 1997-98 congressional session.

No similar figures are available for California. This much is known; 1998 dawned with ambitious plans for both HMO reform and universal health coverage. By the end of the year, the political landscape was littered with the wreckage of dozens of bills intended to make health care more available and less expensive.

"Cal-Care," a scheme to provide health insurance to "everyone in the state" by blending existing government expenditures with a business payroll tax, secured the backing of over 100 consumer, professional and public interest groups. But under a barrage of criticism from the insurance and private health care industries (aided and abetted by the California Chamber of Commerce), Cal-Care failed to survive its first legislative hearing. Health reform advocates were thrown a tiny crumb in the form of a $100,000 study of universal care to be conducted for the legislature by the University of California Medical Center in San Francisco. The findings are scheduled to be released in July, too late to be acted upon until the next century.

HMO reformers, working to improve conditions for those Californians fortunate enough to be insured, fared far better in the legislature but ran into what the Orange County Register called "a brick wall blocking major change in the way managed health care works in California." The brick wall was Governor Pete Wilson who vetoed a dozen bills that would have required health plans to, among other things, pay for a second medical opinion and for contraceptive drugs; cover outpatient care for serious mental illness; give licensed doctors control over denial of care; disclose the criteria used in determining benefits; hold physicians making decisions for health plans to the same professional standards as doctors who treat patients; and turn over HMO regulation to a new five-member board made up of the governor's and the legislature's appointees. Further opposition from HMOs also persuaded Wilson to fly in the face of intense advocacy from FCL, senior organizations, and gay/lesbian rights activists and veto legislation that would have ordered health insurers to offer domestic partner benefits through employer-run programs.

To his credit, Wilson did sign several bills that made minor changes in the way health care is delivered in California. Those signatures were in marked contrast to the previous year, when he vetoed all but one reform bill in a display of animosity that was called the "Columbus Day Massacre" by health care reformers. Wilson explained his actions by saying he supported only those reforms that, in his opinion, would not raise health care costs. Appparently, in his view the pupose of the health care system is to save money, not save lives.

Political Prospects

Last fall's general election bodes well for small improvements in the quality, quantity and accountability of the state's health care system. But the pace is likely to be slow and incremental. Dramatic short-term changes, such as single payer universal coverage, are unlikely.

Some HMO reform is expected as the result of new Governor Gray Davis' close ties to trial lawyers, who spent almost $8 million in the 1998 elections and who would like to see HMOs held liable for their mistakes. Most HMO patients in California, when injured through malpractice or denial of care, are not able to sue for pain and suffering. As things stand now, Californians can sue an HMO only for the cost of treatment and economic losses such as wages. This restriction denies both California lawyers and patients the opportunity to collect damages allowed under the laws of many other states.

Under pressure from a solidly Democratic majority feeling the heat of ever-growing provider and consumer discontent, Davis is also expected to support and sign many health-related budget items and bills rejected by his predecessor. Assembly Speaker Antonio Villaraigosa (D., Los Angeles) said in February that the Democratic Caucus' top priority, besides improving education, is increasing access to health care for poor people. Earlier in the year, leading Senate Democrat Pat Johnston (D., Stockton) asserted in an op-ed piece that "if we can't insure everyone, then insure the children." To date, however, the Democrats have not put forward any earth-shaking proposals toward those goals (see accompanying sidebars on state legislation and state budget).

"A Knock Out Drag Down Fight" (sic)

The major health care battle of 1999, it appears, will not be about relieving the pain of the state's millions of uninsured residents. Instead, the "knock out drag down fight" of the year (in the words of veteran state legislator Senator Bill Morrow, R., Oceanside) will spring from attempts to resolve a lengthy struggle between two somewhat unusual coalitions.

On one side are trial attorneys, many legislative Democrats and some consumer groups who seek to overturn the state's 23- year-old $250,000 limit in pain and suffering awards in personal injury lawsuits. On the other are doctors, insurance companies, Republican leaders, and many advocates for health care for the poor. In the middle are the Assembly Democrats, who want to raise the cap to as high as $700,000 but also boost health care for all.

Fred Hiedstand, general counsel and chief executive officer of Californians Allied for Patient Protection, a coalition of doctors, dentists, medical schools and hospitals, says that the Democrats' plan just will not work. He recently told The Sacramento Bee, "You can't increase access to health care by increasing the amount of non-economic damages that health care providers have to pay out." Hiedstand claims raising the cap is unnecessary because patients can already sue for an unlimited amount of economic damages - covering such things as lost wages, future medical care, nursing costs and medications. A study prepared last fall by his group contends that lifting the cap would raise malpractice premiums and ultimately lead to an increase in insurance premiums of as much as $6 billion.

The opposing viewpoint is represented by Mark Robinson, president of Consumer Attorneys of California, who, according to The Bee, maintains that "the current system actually hurts the poor more than the rich because those who earn less are not awarded as much in damages. Furthermore, changing pain and suffering award caps in other states has not significantly affected the cost of health care or restricted access by the poor."

A Political Hot Potato

Whichever side is right or victorious in the liability cap battle, its outcome is merely a sideshow in the campaign to create a health care system that works for all Californians. Without an immense, persistent and consistent public uproar, dramatic improvements in the state's health care delivery system are unlikely to occur in the near future. Major changes are a political hot potato that it seems no elected official wants to touch.

Despite the power that they now hold, Democrats appear to be willing only to inch forward a fraction this year, adding a bit to coverage for poor children, nudging insurers and providers to improve the scope and quality of their services, making current low-income health programs a little more attractive to those intimidated by their complexity and Big Brotherliness, and perhaps raising the bar on liability for damages done by careless or incompetent providers. Largely left out of the debate, it seems, will be more radical proposals from the left, the right, and the just plain aggravated.

Some of those proposals include a suggestion from one of our readers (which he passed on, to lukewarm response, to his state senator) that health care, especially as it applies to those with disabilities, focus not only on maintenance but also on actually reducing or eliminating the disability, thereby saving taxpayers billions in the long run; a recently-published op-ed piece from the conservative Heritage Foundation that proclaimed "Change the system. ...Give every working family direct and generous tax relief, either in the form of a tax credit or a voucher for low- income people to help offset their health care costs"; and the United Health Care Action Networks campaign to transform Medicare and Medicaid from programs serving the elderly and the poor "to include coverage (with long-term care) for all."

No matter who or what group has the right answer to California's health care crisis, in these best of economic times it would be irresponsible to ignore the opportunity to forge ahead with building a health care system that meets the needs of all. Money and politics should not determine who lives or dies and who is sick or healthy.

FCL urges its supporters to write to us and their representatives with their ideas and support for systemic change. --Ken Larsen

"... To ensure equal access to preventive therapeutic and emergency care, FCL supports the creation of a universal health care system in which all individuals have access to comprehensive care regardless of income, present or previous health status, employment status, immigration status, or prison status. The system should provide sufficient reimbursement to health care providers so that health care services are available to those who need them.

Until universal health care is achieved, public policies should encourage the availability of comprehensive health insurance at a reasonable cost that is not interrupted by changes in employment. Regulations protecting the patient's right to safe and timely care, complete disclosure as to their condition and options, privacy protection of their medical records, and freedom to change providers and challenge denials of treatment must be vigorously advocated.

FCL recognizes that malpractice claims are a significant cause of increased insurance costs and hence higher overall medical costs. These costs should be brought down by greater policing of practitioners and the reduction of claims through the reduction of malpractice. We oppose tort 'reform' that makes the pursuit of legitimate claims more difficult. ..." (Adopted in 1996)

Governor Davis has presented the Legislature with a 1999-2000 budget that anticipates that Medi-Cal will serve almost 5 million people -- approximately one in seven Californians. Medi- Cal serves more people than any other state-funded program except for K-12 education, which involves 5.5 million young people. Davis' Medi-Cal budget totals $20.9 billion. Only $7.3 billion comes from the state's general fund; the federal government supplies the balance. According to the non-profit and non- partisan California Budget Project, "the budget assumes a slight decline in Medi-Cal caseloads, a modest increase for the Healthy Families Programs (HFP) and a significant increase in federal support for state health programs." HFP is expected to finally get off the ground, with a jump in enrollment from 138,000 children at the end of 1998-99 to 304,000 children by the end of 1999-2000.

The governor's proposed budget also instructs the state's Health and Human Services agency to evaluate the possibility of directing new tobacco tax revenues derived from Proposition 10 (passed by the voters last fall) to expand HFP coverage for children from birth to age five. Other major states, New York for one, are considering using federal tobacco settlement funds to expand health care, but no such discussion has yet begun in California.

Pre-natal care for undocumented immigrants, which had been kept in place by the courts and supported by the legislature while being fought tooth-and-nail by the Wilson administration, is slated for full funding in the new budget. And the state will take over from the federal government financial responsibility for nonemergency care of immigrants who arrived in the United States after August 22, 1996, the date that federal welfare reform took effect. This change will cost the state $36.6 million in 1999-2000 and $57 million in 2001-02. The added state expenses resulting from expanded immigrant health care services will be more than offset by an expected saving of $210 million resulting from a Clinton administration proposal to increase federal support for the Medi-Cal program.

Despite these modest gains in state health care eligibility, the fact remains that Medi-Cal caseloads are expected to continue to drop over the next year despite California's continuing growth in both population and numbers of uninsured. A recent report by the UCLA Center for Health Policy Research attributes this paradox to three factors; 1) low-wage workers who do not qualify for government-sponsored health insurance, whose employers do not offer health care coverage, and who cannot themselves afford the employee's share of premium costs; 2) former welfare recipients who are unaware or unwilling to jump through the hoops required to collect the one year of transitional Medi-Cal coverage for which they are eligible; 3) legal immigrants who fail to apply because of fears that their immigration status will be jeopardized by being adjudged "likely to become a public charge."

Trevor Thomas, one of FCL's original staff members, passed away in late January at the age of 76. Trevor worked with FCL from 1953 through 1958 as Executive Secretary, Editor, and Assistant to the then legislative advocate, Georges Weber. In addition to his manifold contributions to FCL, Trevor served local and national communities variously as Executive Secretary of The National Committee for a Sane Nuclear Policy from 1958- 1962, General Manager of KPFA-FM from 1962-63, and Acting President of the Pacifica Foundation in 1963. After working to rebuild vandalized and burned-down churches in Mississippi through 1964, Trevor returned to California and joined the staff of KQED. In 1975 he received an Emmy Award for a KQED documentary, "To Expect To Die: A Film About Living."

He will be especially well-remembered by Friends for his authorship of This Life We Take, a forceful and persuasive argument against the death penalty.

Trevor's contributions to FCL and the other issues and causes he so tellingly addressed add up to an extraordinary, unflagging record of service to others. He will be greatly missed by all who knew him. He is survived by two daughters and one son.