THE GREAT DEBATE: SINGLE PAYER HEALTH CARE IN CALIFORNIA

Good evening everyone welcome to the CommonwealthClub I'm mark sitter chair of the sedima project a member of the club's board of governors andyour moderator for tonight the program you are attending is called the great debate single-payerhealthcare in California as I'm sure most of you are aware many Americans are fed up with whatthey see is a dysfunctional healthcare system and also fed up with politicians attempts to fixit as a result many Californians have called for a state-based solution a bill the Senate bill562 which passed in the state Senate last year puts on the table a government-run health planfor all California residents the bill is called the healthy California act and it would provideuniversal comprehensive single-payer health care coverage and a healthcare cost control systemintended to benefit all residents of the state.

Now California will have a new governor this yearand the leading candidates as well as advocates clinicians and other voters are split on thisissue about single-payer everybody seems to want access for everybody to quality health care at alower cost but the question is is single-payer or what some people think of as Medicare for all isthat the answer I think we have a few parties here tonight which is just fine well there are manysupporters of a single-payer plan and they point out that nearly every other industrialized countryhas some form of a single-payer system and is able to cover pretty much all of its citizens atlower cost than the United States skeptics about single-payer say that it would be too expensiveand it would also be very disruptive as several US states have found so sounds like the makings ofa great debate tonight we'll debate single-payer.

Health care with two experts who hold differingviews and let me introduce them to you right now on my immediate left your right is dr. Paul songhe is co-chair of the group behind SB 562 that's the bill I mentioned he's a board-certifiedradiation oncologist he's a biotech executive chief medical officer of 80 gen global and ahealth care reform activist he's a national board member of physicians for a National Health Programand also serves as co-chair for the campaign for a healthy California we also have dr. MichaelWeinberg who is president of the Bay Area Council economic Institute the leading think-tank focusedon critical economic and policy issues faced in the Silicon Valley in San Francisco region beforejoining the council he was a senior he was senior research fellow at the New America Foundation heholds a doctoral degree in political science from.

The University of North Carolina please helpme welcome dr. Paul song and dr. Michael Unger now just right up front I want to make apreparatory comment and make a very important distinction it seems to be a confusing issue formany people in this area that is the distinction between single-payer health care and universalcoverage sounds simple but single-payer means one pair usually the government and usuallyit's either the state government or a federal government or provincial government but just onegovernment not multiple government entities is the only payer for health care the universal coverageof course means that pretty much everybody gets covered they're not the same thing and polls showthat most Americans are in favor of everybody getting covered they agree on that polls also showthat Americans disagree a great deal about whether.

The government should be the only payer and we'llfind the same thing with our experts tonight who both of whom agree strongly that pretty mucheverybody should be covered but they disagree about whether the government should be the solepayer so if you came here looking for a good fight over whether health care is our right you're notgonna get that what you're gonna get is if we all pretty much think that everybody should be coveredwhat is the best way to do that now you won't be surprised to hear that dr. song is in favor ofa single-payer approach so I want to start out by asking Paul why do you think single-payeris the best way to go so as somebody who's practiced in the system for 20 years I've had achance to practice at government-run hospitals like Walter Reed private hospitals like Cedarsinai and in private practice and I will tell.

You that our system is very inefficient you havepeople many of you here whose insurance coverage changes year to year maybe one year it's UnitedHealthcare next year it's Aetna maybe the next year your Medicare eligible so when you go toa hospital and you you get admitted the first thing is the hospital administrators got to figureout who is your coverage what type of coverage do you have a PPO HMO what is your copay what's yourdeductible am I in your network or not same thing with physicians and that sort of inefficiencyis translated to where universities like Duke University Medical Center now has more hospitaladministrators than hospital beds and ultimately that starts to consume more and more of thehospital budget some people estimate that it consumes 25 to 30 percent of the actual hospitalbudget each year same thing but with physicians.

Offices we're spending you know eighty threethousand dollars per day or to basically hire someone to handle pre authorizations and to fightdenials coupled with the twenty hours so when you take that administrative waste that's actuallymoney that's being taken out of the healthcare system that would better be used to take care ofpatients or to be able to reduce costs and when you have a single-payer system it doesn't matterif you change jobs if you change insurance you go from one Hospital one doctor another you stoleit's it's simple they don't have to figure out who's covering your your expensive the otherthing I will say if we were really serious about reducing costs when Kaiser uses its marketshare to negotiate drug prices discounts that's considered to be good free-market good businesssavvy but Medicare is forbidden to do that if.

We put all the people in the state of Californiapulled them together and really used our market share to extract good concessions both purchasingthat's another way we could reduce costs so when you look at all of those things coupled withthe fact that all of the administrative waste money that's wasted on that Peter Lee fromcovered California was bragging how they spent a hundred and fifty million dollars to and frommarketing to enroll people in covered California we wouldn't have to spend money on marketinganymore you wouldn't have to run billboards at you know the baseball field saying you knowat Anthem that's the official partner of the San Francisco Giants or some things along thoselines that's money that should be used to take care of patients to expand benefits and that'swhat I believe a single-payer system would do.

That's that sounds pretty convincing Micah howcould you possibly be opposed to that well you know what's interesting is that I'm like notopposed to almost anything he said whatsoever and the sort of level set of you know what I thinkmakes a lot of sense it's been an interesting week for me last night that was on laura ingraham showon fox news getting yelled at because I support extending médicale to undocumented immigrantsand the organization that I work for supports that and I get a sense I mean I don't know but itseemed like from the clapping like maybe you know the you know this audience is gonna be much nicerthan she was she's psycho but but I get the sense that you know I might be in a little bit of ayou know underdog position here as well but in any case all I'm saying is that you know I agreeabout the the crazy administrative waste in our.

In our US healthcare system we have we don'thave a market-based healthcare system we have ten healthcare systems right we have Medicare wehave Medicaid we have employer sponsored insurance we have individual insurance we have TRICARE wehave the VA and it's really that that creates the administrative chaos and expense associated withthis all I'm saying is that when we look at which international system we should move towards Ibelieve that we should move more towards a system like the Bismark systems is kind of what they'rereferred to as butts in Germany Switzerland and the Netherlands which have a single market whicheveryone is in you can kind of think about it as like exchanges for everyone the health insurersthat participate are regulated very differently for the most part they're entirely nonprofitbut they're private and we'll get into over the.

Course of this conversation why I might preferone of the other but I just wanted to sort of level set in terms of what I prefer okay greatbefore we get too far since this week this is titled single-payer health care in Californiaand there's a bill that's in the offing or at least the bill was passed in a state Senatein June of 2017 but later that month Assembly Speaker Anthony Rendon shelled it and it's beenshelved ever since I believe Paul what is the current status of that bill as you mentioned isshelved I will say one thing about SSB 562 as it passed in the Senate it did not have some of thespecifics that with the intent that they would be addressed with a good faith effort by thehouse it has been languishing and it's been on hold and that's where we are right now one thingabout SB 5 seeks to before we get into specifics.

Because there are some areas that I think Michaelwill have some valid points on is that the bill was never the whole premise of 562 is it wouldnever be implement into law unless every eye was dotted and T was crossed that everything all theconcerns all the funding mechanisms everything was in place once that was in place then it wouldbe placed into law so that's that's really it wouldn't have been implemented irresponsiblywith all these you know loose ends to it okay so the biggest loose ends and this comes up in thegubernatorial discussions is how it's going to get paid for right so when speaker Rendon shelvedit the bill he said he called it won't fully and complete and describing how it be paid for here'sjust a couple of quick numbers I promise I won't let your eyes glaze over too much but California'slegislative analysts estimated that single-payer.

Health care would cost about 400 billion now thisis an estate whose budget is less than 200 billion how different mark Mark Twain said when he wasasked what he thought of vogner's music he said it's not as bad as it sounds so in some waysit's not as bad as it sounds it sounds like an impossible number 400 billion because the budgetsless than 200 however California already gets 225 billion dollars from the federal government forMedicare Medicaid and so forth and presumably all that would be folded into that 400 billionso now you're only down to 175 billion now one way that could be funded the bill did not suggesthow to fund it but the legislative analysts gave an example it could be funded they estimated bya payroll tax basically on employers of about 15 percent of earned income and even that's not asbad as it sounds 15 percent more taxes sounds bad.

But of course I remember employers and employeesfor most companies are already paying for health care so they no longer pay for health care thatwould go that would go to the tax in the fund so it would be somewhat less than that and someothers have suggested that we should tax increase the sales tax a tax on gross business receiptsrather than on payroll any other thing those things could happen but basically I guess I'd liketo ask you Paul how would you imagine single payer health care being funded there will have to besome kind of increase in taxes do you believe Californians have an appetite for more taxes so Iwill say first and foremost the that 400 billion I think if even if you there are other estimatesbut let's take before hundr billion I think it's high it's not as if this isn't what the state ofCalifornia is ready paying the state of California.

Even the most conservative estimates estimate thatwe're spending 368 billion dollars on health care alone right now of which a UCLA study found that71 cents of every health care dollar that spent in California is actually paid for by us thetaxpayers whether it be providing health care to every state city employee teachers tax breaksto Apple and Google to provide health care for their employees that seventy wants of every centsof every healthcare dollars already being paid for us you take that with the fact that the healthinsurance industry probably takes anywhere from 20 to 30 cents of every health care dollar awayfrom actual patient care for administrative costs marketing CEO salaries all of the above themoney is basically there now in terms of how to come how to come about it in raising taxesthere was a study that was done by the group.

At University of Massachusetts they looked at allsorts of potential sales tax I think what I would say is this that was a sort of a benchmark or atleast something to show that the the people behind the bill were serious about trying to advancethis with the idea that the people in that we elected to do the job would put some of theirbrightest minds together to find a way to make this happen if this was going to happen companiesare being crippled by healthcare costs right now Charlie Munger has said he calls our health caresystem the tapeworm of American competitiveness prior to the bailout General Motors spent moreon health care than it did on steel to build cars so the idea that somehow corporations are notbeing crippled and then on top of that workers are being asked to contribute more their paychecktowards their employer-sponsored plan it's in the.

Last 10 years it's got up a hundred percent interms of what employers are being taken out of their paycheck towards their health care costs andthen on the backend in terms of what they pay for co-pays and deductibles the other thing that youknow when Michael was talking about undocumented brothers and sisters people who are using ourhospitals and quote the hospitals are paying for uncompensated care they're passing that onto us in terms of higher premiums so every way around we're being asked to pay we're just notpaying it quote in a tax and we're not getting any credit for it so I think when we look at thefunding it's not like we're going from 0 to 400 billion whereas a state already spending 368building billion what the analysis also showed that when you Institute all of the advantages ofbulk purchasing discounts and also at reducing.

The administrative waste that you actually save 30billion dollars a year now as far as the funding that's where I would love to use bright minds likeMicah to come up with the ways to make this happen but our legislature in the end was to behold intothe private insurance industry to even bother to advance this yeah ok so again I agree with 90%of what he's saying actually think the German system is the better solution to those thingsbut the legislature was beholden to not doing a terrible job of legislating this isn't justa couple of dudes sitting around talking about what should happen if you're going to even startdebating something in a health care committee of the California state legislature and you're goingto pass it out of that agust body you should have some plan for how you come up with that additionalhundred and fifty billion let's say let's let's.

Not even do the 400 let's say it's only a hundredand fifty billion additional dollars right they didn't have that plan before they passed itout of the California State Senate that is legislative malpractice and I think that it doesa disservice like I think it's fine to like a Canadian system like you know last night you knowI thought the person you know Laura was evil she thought I was a lunatic I actually think Paul'sgreat I don't think there's anything wrong with a canadian-style system I happen to have anotherpreference however I don't think it's great to pass an additional 150 billion dollar implicationof taxes out of the California State Senate and just say hey we're gonna work it out later rightso that you know I really think that ought to have been taken much more seriously much more earlieron and actually it was the bill that we debated.

In 2008 it's not like this is our first bite atthe Apple Shila cules bill in 2008 actually had a financing mechanism at the very least we couldhave started there but we've gotten into kind of where we are in America today which is like abunch of poorly specified nonsense which allows us to yell at each other and like I'm a policy wonkyeah okay so can I just say one thing about the court the malfeasance on if we're gonna use thatstandard then then I would like to hear him really condemn the bullet train because that's somethingit has been passed that is billions dollars over budget it's highly dependent on federal fundingthey're not even sure where they're going to get the money to extend the the rail and yet you anassembly and a governor and a Senate that went all-in they've passed multiple bills that didn'thave funding mechanisms so the apocrypha is not.

You know missed in when it comes to 562 the secondpart I will just say about Sheila Kuehl is our cap and trade you had a bill that died in the assemblybut what happened you had the political will of a governor who wanted to see something throughhe had the assembly in the Senate and what did they do they did it gotten the men they got rid ofthe the first bill and they put in a new bill that passed if our quote as people in the assembly whosay they're for single-payer and principle were really serious about it they could have said youknow what 562 it doesn't it's lacking let's put in Sheila Kuehl bill update it for things thatare germane ten years later verses when her bill passed but that's that's really the end it's it'sit's a lack of political will because if you look at everything else that's what's lacking what'swoefully incomplete as the political will not the.

Specifics of 562 so I mean sort of I mean I'lljust I'll concede the point that the California Legislature has done other stupid things Wowprobably going on there yeah yeah yeah okay but but I want to get I would really want to notjust focus on whether 562 was it was well done or not because the fact is the single-payer issue isin play right and I wanted to sing with something else and that is if single-payer saves moneydoesn't save money whatever else you're still switching you're still asking people to pay a lotmore in taxes even if they get more benefits even if they're not even forgetting higher wages asa result there's a difference there so I want to distinguish that single-payer would require moretaxes but I think there's a very other interesting point which is quite debatable I don't mean it'swrong but it's quite debatable and that is some.

People think single-payer will save money and somepeople think single-payer will cost more money and there's arguments for both so Paul clearlyfeels it will save money I heard certainly an administrative simplification less paperwork andso forth – and the government negotiating a lower prices Myka do you think single-payer wouldbe less expensive than our current system no I don't I I don't think that first off it's verydifficult to do single-payer within an individual state and so the you know you get all sorts ofthings like well you want to drive a super hard bargain with the doctors in the state well youknow they can go to other states right so it's very different to be doing this on a federallevel than doing it on the state level but one of the things that we need to be honest aboutis more healthcare for more people costs more.

Money maybe we like that I like that right butit it is something that we need to I mean this is just you know might be the economic analyst inme you know we need to understand that there are trade-offs and one of the trade-offs is that morehealthcare for more people cost more money and I think that's something that it's really importantto be very honest about if we were serious about controlling healthcare costs it's actually notprimarily healthcare where we would want to be spending our money and I'm afraid we're going toagree again because when you look at these other international systems and you see the betteroutcomes that they get in terms of mortality and all sorts of other public health issue itturns out they don't spend vastly less than us when you put together both health spending andsocial services spending it's that they spend.

A bunch more on social services which it turnsout has a much bigger impact on people's total health so the you know I I think kind of thedebate about single-payer or not single-payer is almost missing the point of what is reallygoing to produce health and if we're pouring more money into the health care system then we're notnecessarily spending the money exactly where it should be spent to produce health hey it's impactsfaster that's my blazer whether I've gotten some wonderful questions I can promise you I won'tbe able to ask them all but we will definitely get to some of them I think I want to push alittle further on whether single-payer would save money because one of the key argumentsand it's a reasonable argument it's just not completely obvious to me is that the governmentif it really had full control of all the purple.

Levers could negotiate prices down or it couldjust set prices lower and if you look at our health care system there's examples where that'shappened and the examples where government doesn't the government which is us ultimately doesn't havethe gumption to do it so I want to ask you do you think if the government had their hand on all theprice levers not just the VA here for 10 million people or something like that and the governmenthad to make choices saying we're going to close these hospitals or we're going to pay doctors nota little bit less but a lot less if we're gonna save money where the government says we're gonnapick these two drugs out of five in the category and those the only ones are going to cover do youthink that our federal government would be able or our state government in this case would be able tomake those hard decisions and stick with them so.

I would say that what's really suggestive of thatis in the run-up to the Affordable Care Act there were 33 hundred registered healthcare lobbyistsfor the 535 members of Congress they spent more than 1.2 million dollars a day and in total morethan what was spent on the bush Kerry election and that's why the Affordable Care Act has noinsurance rate regulation and no pharmaceutical drug pricing controls so if you give the powerto quote the federal government to do this who's beholden to the private insurance industry in thepharmaceutical industry the answer is No and I will say this with regard to reducing formulariesor denying care with death panels we have that right now and it's the private insurance industrythey get constantly get between me and my patients day after day telling me what drug I can prescribewhat procedures I can do so when they think that.

The government will do that no but the problemis this when they when United Healthcare when Kaiser they negotiate bulk purchases whether it'ssaline whether it be pharmaceuticals they don't pass those savings on to keep premiums down fortheir their enrollees that's what a single-payer system would ultimately do and as far as froma physician's office you know sure maybe I'll get paid less under a single-payer health planfrankly I get paid less for Medicare treating Medicare patients than I do United Healthcare butI'm not spending all this money fighting with the insurance company to get paid for things thatI should get paid for nor am i fighting to get pre-authorization so the amount of money thatI waste hiring people to fight an unnecessary battle to practice medicine the way I've beentrained is greatly offsets whatever quote more.

Money that they will pay a physician so I thinka simplified system would free up my office tomb allow me to spend more time with patients andless time fighting with insurance companies yeah there's certainly be less paperwork they're likewhat do you think about yeah I totally agree that a simple system would make a lot more sense butI think that our simple system should include you know private insurers so if you looked at the sortof march madness style tournament that a number of eminent economists from across the politicalspectrum did in the New York Times at the end of last year and it evaluated this various differentsystems on objective measures of access quality and cost candidate was knocked out in the firstround one of the things that's that's that's sort of poorly understood is that the Canadian systemwhich is the system that 562 is is modeled on is.

Actually one of the worst performing healthsystems in the entire world by all objective analyses so you know for it that's just a weirdthing to choose as your like a thing to emulate whereas the ultimate winner of this bracket wasSwitzerland in an arrow battle over France whoo Switzerland and France have private insurers andthey use them in different ways but the thing that is important to understand is that yet this is asingle system that people are in they're not in ten different systems including the United Statesis multiple single-payer systems but one last thing that it's also super important to understandwhen we talk about Medicare for all there's a very important benefit that the Medicare program doesnot cover and that's the long-term care benefit and we have a tremendous amount of long-term careneeds here in the United States which are paid for.

Now through another single-payer system that wehave called Medicaid so we have a long-term care insurance program but the deductible is yourlife savings if we change to a system in which everyone has universal unlimited free access tolong-term care that is an enormous ly expensive proposition and we just need to understand theirtrade-offs associated with this if we're talking about what the real cost of these systems are so Iwill say one thing with regard to Canada it would not be the premier model of single-payer that Iwould hold up my parents immigrated from Korea Korea as a single-payer system that's actuallyconsidered one of the best systems in the world Taiwan has a system as well I would say withregard to Canada part of the reason you're seeing just like with the British health system isyou saw the Conservatives chronically underfunding.

Health care in both of those countries and tryingto privatize it and those private solutions just like our Medicare Advantage here have endedup costing a lot more and delivering far less there was a recent study from Stanford and MITeconomists that basically showed that for our Medicare Advantage plans they're paying actuallyless per enrollee in terms of coverage than the traditional Medicare despite charging 20% more interms of enrollees Canada you know everyone likes to show Canada as the reason why single-payeris not great I'm not saying that single-payer is a perfect system I'm saying and frankly there isno perfect health care system but no one has ever gone bankrupt in Canada or had to mortgage theirfuture because they got sick and that's that's the what I would say is I think you know we actuallyagree on a lot more than disagree but I think the.

Most important thing I would say is is what is thebasic level of coverage that everyone should have and then if you want to have supplemental privateinsurance and things of that nature I think fine I I'm not opposed to that but we should have somebasic coverage that maximizes the market power of three you know 33 million people in the stateof California get the best discounts possible the other thing I will just say with regard tolong-term care my father the father-in-law was in palliative care we had him in long-term care itis devastating we were spending you know 10 to 12 thousand dollars a month on him and fortunately wehave the resources to do that but the reality is a lot of people don't and and with regard to 562 Iknow that that was one of the things that it was considering but in the end if we couldn't find away to cover that but we were still able to just.

Cover basic coverage for every single person we'dstill come out way ahead of what we have but just a quick question like is that what people actuallythink they're supporting when they support 562 do they understand that this massive health care needwhich is extraordinarily expensive that's actually super important for people is not part of what'scovered by this program this this room might hmm but this is very very smart room you know it'strue I mean I'm pandering and it's true but but I genuinely think that most people that support 562think of it as free unlimited health care of every type I will say that I think that maybe there aresome people that believe that but as as they're not getting it right now I don't think that ifthe final bill didn't have that but they still had better access to care far cheaper less riskof going bankrupt because they got sick and had.

No middleman that was denying every single step ofthe way I think they'd still be happier with the type of plan hmm so so there's been there's manyquestions here about the insurance industry okay so some of them are not very flattering manyof them say do insurance companies go out of business under single-payer do they still playa role and it's been pointed out that when you looked at the rollout of health of healthcare.govand the Affordable Care Act for only 10 million or so Americans now we're talking about three timesthat just for the state of California three three plus times that can the government really handlethe implementation of single-payer now you say no you're the government yeah like rememberthe government isn't the imaginary government we wish we had it's the messy crazy democraticgovernment of the United States which is currently.

Run by a lunatic right so every time you say thegovernment should do something you're taking your chances so so I will say that if you just takecovered California for a minute which has been lauded as the you know model exchange there are66,000 people today who are in covered California that are in a single-payer system meaning theyonly have one choice of a provider on the plan there are two hundred and sixteen thousand inCalifornia today they'd only have two choices so the idea that you know that single for themthey they already have single-payer I think if you moved everyone to one universal system andall it is is just a pool of money goes into one thing and that allocates it out I think that's alot easier to do than trying to herd 12 different HMOs and PPOs and Medicaid HMOs and and all ofthese other plans together I think that you know.

It if we can't do one payer then I think there'ssomething wrong and so the insurance companies go out of business there's no more Kaiser Permanenteor do they have any role at all Kaiser is an excellent accountable care organization theygive great care but as an insurance company that I don't think they need to function is butand and let and let's be clear I mean you you folks probably did your research like you knowso Kaiser Permanente Bernard Tyson is currently the chair of the Bay Area Council which is theorganization that I work for like they go out of business they are the their ability to do what itis that they do within their system is predicated on their ability to be the payer for their ownsystems so that is the party you know that is the model of these managed care organizations andthat's what I think you know I actually think.

There is a value in having these accountable careorganizations competing with each other and having private competition and I think that the proofis in the pudding you know look at the ways in which these systems are rated across the worldon access on quality and on cost and you'll find that many of the ones that are very high qualityhave private insurers that are involved Albee it in a very different way and I think that it willbe easier for us within our crazy country to get to that kind of a system we've been having kindof an abstract conversation up until this point but actually we have to get from here to there andif you have examples of great countries and great health systems that are a whole lot closer to ourhealth system and something we could conceivably negotiate with in a country where not everybodyactually agrees with us then that's another part.

Of the reason why in practical terms I preferthe Bismark systems rather than something like you know Korea or the other systems I'll just sayone thing about the Bismark system because it it is quite good but you have to realize that the wayso it's really an employer-sponsored system where the employer pays a percentage far less than whatour companies pay here and then the employee pays based on a percentage of their payroll the theproblem between our system and theirs is they have far greater utilization I looked at whatthey cover they cover things that you wouldn't even dare to try to get covered here in the itstates and and patience the denials they don't have the denials that we have here in the stateof California last nine years we've had over 45 million denials and what's really insidious aboutthis David Ignatius wrote an article about this.

In the LA Times is that if you take the time tofight with the insurance company either you as a patient or your doctor spends hours doing thisthat 50% of the time they get overturned what does that tell you that a lot of the insurancecompanies here are purposely denying it with the intent that you probably are going to get tooworn out fighting it and they'll just pocket the money and if they do decide to pay back what theyshould have paid the beginning they've sat on this for four or five months and Bank the interest sowhen we talk about insurance companies I think that you have to realize they don't work for thebest interest their interests are completely mal aligned with the interests of the people thatbuy their product so they they can be but they are not always in everywhere like what we'rewhat you're talking about is interests right.

And alignment of interests well that's incentivesand you can set up an incentive system and parts of our healthcare system work this way parts ofinternational healthcare systems work this way where insurers are actually held accountable forpopulation health and they compete with each other on the basis of providing population health andthey actually aren't compensated and one of the big problems that a lot of people includingmyself had with 562 and have a single-payer systems generally is that they're generally basedon a fee-for-service chassis so it's about like you get this set price for this set procedure andyou and you deliver it at that price and they have a lot more utilization in these other countriesthey just do it at a much lower price I actually don't think that's the right set of incentivesat all I think that you know if we set up this.

Much simpler system with a series of accountablecare organizations that are competing with each other then they can do whatever they can poopyI mean you know so you know about this right really you just want people hiking around in thewoods really you just want people like petting ponies you know like that's at you know and likehaving stable housing right and so you have these accountable care organizations not fee-for-serviceorganizations that are actually beginning you know Kaiser just made a 200 million dollar investmentin affordable housing here in the Bay Area and let me tell you newsflash it wasn't entirelycharitable it actually matters for Kaiser Permanente and these other companies that thereis stable affordable housing for people in the Bay Area that has a much bigger impact on people'shealth than healthcare access but right now it's.

A freaking mess it is an absolute mess and eventhe most well-meaning health insurance company is not empowered to go out of business and there areso many different ways in which they not only get bad incentives but they have like 15 differenttypes of bad incentives right so they're trying to play some crazy game where they maximize therevenue over here in one way and do it another way you know doctors and hospitals we're likemeasuring quality in 20 different ways we do need a simpler system we just disagree on whatthat simple system should be I I will say this I I actually like accountable care organizationsalthough I think under the Affordable Care Act they've kind of failed because they've stillfragmented Kaiser has done a tremendous job at you know integrated care and I would like themto continue doing that I just don't think they.

Need to be in the insurance industry I think wecould hold that get everyone's funds that give it back to look Kaiser sitting on I think last Iheard 2,000 times the necessary reserves required by an insurance company in it while they've donegreat things like invested in affordable housing they've also spent a lot of money investing in aVC arm for home dialysis units they've actually laid off custodial staff because they've investedin a for-profit cleaning service you know is that stuff that an insurance company needs to be doingthis is money that they could keep premiums lower and and pass it on to people were having troublesince the Affordable Care Act it should be point out just from 2015 to 2017 the number of peoplethat report having difficulty paying their monthly premiums has gone up to almost 40% that that'sthat's no positive measure so and there's no.

Insurance rate regulation so if all these placesare making so much money let's give some of that back to the insurers I mean to the people mmm okayso here's here's a part that I wrestle with a bit the real problem we have with cost in health careis very simple we collectively want to consume more health care than we collectively want to payfor we're complaining it cost too much money right now the organizations that have to try to managethat have to say no are the insurance companies so they're gonna be unpopular maybe they're doinga crappy job everything to a great job they're gonna be unpopular what happens if that becomesthe government that has to say no because the the system is really set up so though peoplewill always want more than we can problem it's interesting a member of the assembly who willremain nameless and I were hanging out talking.

To a single payer advocate and you know he and andthis member of the assembly was was talking about well you know we actually use private insurancecompanies in the Medicaid program almost everybody is on Medicaid managed care and that looks alot more like these Bismarck type systems then then you know they're very heavily regulatedthey have a particular public mission and so on and the reason why we are working throughthese private insurance companies is because the people in government realized we didn't wantto be the people saying no but we also realized somebody had to say no so we're working with theseinsurance companies and that is tough it's tough in a lot of other cut countries these decisionsare made by and and here are not using this as a curse word unelected bureaucrats I'm actually coolwith unelected bureaucrats I'm a policy wonk but I.

Don't know if in the United States of America wewould really turn over to a politically sort of you know insulated set of experts to make thislevel of decisions for us in in this country I don't know if that's that's politically plausibleyeah so just for that last thought Pete Earley who runs covered California who is not elected butappointed came out against prop 45 which was insurance rate regulation which would have put thehand the right to regulate rates and an elected official Dave Jones he came out against it andsince he came out against it insurance rates have continued to climb well beyond what he predictedfor covered California so there is somebody who is not an elected official who who was insertinghimself into the the dialogue there the other thing I would say about Medicaid privatization ofMedicaid is one of the doctor only doctors who've.

Continually taken Medicaid since my 11 years inCalifornia I will say the Medicaid HMOs have been a disaster for patients Medicaid which coversright now thirteen million people here in the state of California is being sued by MALDEF theMexican American Legal Defense Fund for being separate and unequal because we are 47th in thenation in terms of physician reimbursement so what happens you can't find doctors that are willingto treat Medicaid patients so the access to care is not there secondly when they in a testimonyin Sacramento which I have the transcripts for they looked at the Medicaid private HMOs plansmajority of them are not spending the amount of money that they're supposed to be dictated tospend per enrollee and the rankings of a lot of these Medicaid HMOs are horrendous so that theprivatization all that's done has put more money.

In the pockets of Centene so much I mean HealthNet so that they could be bought by Centene but that money did not translate to better care forpatients under Medicaid look like when the state was in charge of Medicaid the state was gettingsued and the state is still getting sued for various aspects of his administration the Medicaidprogram it sucks saying no people sue you I'm not saying that like every Medicaid HMO is amazingI'm saying that you know you're gonna get sued if you say no to people so the you know but it'syou know it's it's a matter of degrees ultimately I feel like there's a you know there's a continuumand you know we're in a couple of places that are sort of adjacent to each other in the continuum Ithink that the single-payer system you're talking about would have a place for private insurersI think you've mentioned supplemental coverage.

Perhaps coverage for long-term care and otheryou know I would place those private insurers a little bit further down the continuum but it'snot a fundamental disagreement about whether or not there should be infinite unlimited freehealth care or nasty evil private insurance companies for everyone I want to go back to thatyou said about doctors not taking medic Cal it's called Medicaid Medicaid it's called medicalin California of course because their rates are too low you know a good one of the main goalsof single-payer is to moderate costs and most people know we are somewhere most countries arethirty to fifty percent less expensive than the US and California is no exception however healthcare is also 18 percent of our economy and one in nine jobs okay so if single-payer were to bereally successful it wouldn't just moderate cost.

It wouldn't just not get down 2% you would haveto knock it down a lot to get anywhere near the other countries and one way you do that there'sonly a couple of ways to do it since health care is so labor-intensive and one ways you either havea lot fewer doctors or you pay them a lot less so if doctors currently don't want to take medicalrates wouldn't single-payer rates be lower still no because while medical is a fraction of Medicareand most doctors do participate in Medicare and what I said before is the average doctor and thiswas from the American Medical Association 2011 study and it's worse since then spends 20 hours aweek after seeing patients fighting with insurance companies dealing with pre-authorization thingsof that nature that's 20 less hours they could actually spend taking care of patients so evenif you got paid less per patient if you got to.

See more because the administrative hassle wasless you probably would come out ahead second thing is that as far as the you also have toemploy staff to fight with insurance companies constantly so that's another cost that goes awaythird thing is medical malpractice is far less in countries that have any type of universal healthcare system that's guaranteed to their citizens because especially in the state of Californiawhich put a cap on pain and suffering at $250,000 the reason medical malpractice remains high is notbecause for the pain and suffering but is for the continued medical cost care for that person thathas been harmed as a result of your injury of your malpractice if you have people constantly havingaccess to healthcare for the rest their lives no matter what that cost goes away and that's whymalpractice costs are actually less than other.

Countries as well so those three things I thinkwhen a doctor will take a step back and beyond the ideology and they look at how much easierit is right now for them to deal with a Medicare recipient than it is to deal with some of thesereally awful insurers and then as a result it's going to save money even if they get paid lessper enrollee they will come out pretty much the same with far less headache right now 50% of allphysicians are burned-out and they hate their profession it's it's really sad and and so I thinkthis would eliminate a lot of those headaches yeah absolutely I mean but you know the there'sno question but look talk to your doctors ask them if they love Medicare or love Medicaid theydon't they don't love private insurance companies either what is creating all of this administrativehassle is not the fact that you know they if only.

They could all have medical they would be in youknow hog heaven it's that they have to deal with 10 or 15 different types of payers and you knowtheir patients might be bouncing back and forth you know among them so any single system that wemove towards that is more rational is going to solve that tremendously terrible issue which weall agree on so that's raises some interesting issues the political supporters and opponents of562 interesting I'll just there's lots of both but I'll just name a couple of them in supportthe California Nurses Association the California Federation of Teachers and the State InsuranceCommissioner Dave Jones which to live opposed include the California Medical Association forall interesting California Chamber of Commerce and Small Business Association and at a number of thebusiness groups obviously the California session.

Of health plans not surprisingly the CaliforniaHospital Association has not taken a position they want to see more details okay interesting butinteresting Paul why do you think the California Medical Association is opposed to 562 because asit stands right now a disproportionate number of doctors in CMA also require physicians becauseunlike myself when I have to join the AMA I mean CMA and $800 a year annual dues that comes outof my own pockets whereas kaiser pays for each of their doctors to join CMA they are also aninsurance company and have a vested interest to preserve that they were also very much againstprop 45 which would have regulated insurance rates and I think a lot of doctors again it ischanging you know you have a leadership that's very much entrenched in their own ideology but youif you take a poll of CMA members that the the the.

Overall consensus is no longer anti single-payerit is changing like the rest of our country is hmm so Michael if well I'm curious as to why thebusiness community isn't in favor of single-payer if they think that would help control costs andsimplify their lives their employees lives well they don't think that yeah so yeah I mean sothe the the business community tends to be you know we love talking about disruption herebut the business community actually doesn't think that it's an awesome idea to for examplejust for starters we may hate everybody in the insurance industry but they're actually abouthalf a million people working in the insurance industry in California currently from in healthinsurance companies to health insurance agents and so on businesses actually don't think it'san awesome idea to suddenly put half a million.

People in California out of work they don'tthink it's an awesome idea to suddenly raise their you know payroll taxes or whatever it is by15% they think it's an awful idea to think about doing this on a state-based level because most ofthese businesses are operating in multiple states so having a completely different healthcare systemin one state makes absolutely no sense whatsoever but business is a lot of them have been verysupportive of health reform efforts they tend to be more incrementalist in their thinking andsay hey if we have these really well reviewed health systems around the world that we couldget to through a more incremental less disruptive process that's what we should do mmm you know it'simportant to know what's happened in some other states or at least to discuss so Vermont isn'tmost people know the home state of Bernie Sanders.

The senator who's champion to national Medicarefor all plan in that's of course on the national level in 2014 the governor then Paul Peter Shumlinchampioned single-payer health care in his home state it passed but it was withdrawn a few yearslater when the real costs became clear okay now Colorado had single-payer health care on itsballot in November of 2016 you may recall Hillary Clinton won that state by five percent and in thesame election seven and astonishing 79 percent of Coloradans voted against single-payer health carethere in that state so there's something going on where the states when they walk up to the cliff ofsingle-payer health care decide against it so do you believe California could be successful whereother states have not been so light so I just want to say one thing about Vermont because it's theone that a lot of anti single-payer people like.

To tout first of all it's only got a population of500,000 and initially they thought maybe because it was small that would be the ideal place tostart but that was precisely why it was very difficult Vermont is surrounded by New York andMassachusetts you have a lot of people who work in other states and get their coverage through anemployer in the other states the risk pool simply wasn't big enough they couldn't get the would theyhave a fairly large military community that was on TRICARE so by the time they carved everything outit was a very very very small risk pool and then the the cost was starting that were just costprohibitive so that's why Vermont didn't work again I think Colorado came at a time when theACA was just in place and there were a lot of people who wanted to give it a chance I thinknow that we've had the ACA in place for quite.

A few years and people are having difficulty morethan ever with their co-pays and deductibles and premiums I think if you were to put that to thepoll it may not pass still but it would be a lot closer than it was back in the day and and andthat's where I think we're at I think it's like marriage equality I think that when it firststarted it was something that was the majority people didn't want to support maybe some peoplewere in favor of civil unions with time people started to come around to that and that's what'shappening with single-payer there was a recent study that just came out a month ago that showedfor the first time a clear majority does support a single-payer medicare-for-all plan now theKaiser Family Foundation had that maybe the study you're referring to the challenge was thatwhen they explained to people that single-payer.

Also meant that if they were employed and they'demployer-sponsored insurance they'd have to lose that then it dropped fairly substantially so Iguess the question is in California should SB 562 or some flavor of that pass would the averageemployed Californian find that their health plan was better worse or about the same as what theyhad well first of all III think that the idea of cost I think as I mentioned before if you lookat the last ten years the amount for those of you that get your coverage through an employersponsored plan the majority of people have had to spend a contribute a hundred percent moreof the last ten years towards their employer sponsored plan so that's money that's beingtaking out of their paycheck quote a hidden tax and then on the back end when they got sickand utilized that they had to pay seventy percent.

Higher amount in co-pays and deductibles overthe same 10-year period of time not to mention things that aren't covered so I think that a lotof people will find and that doesn't even take into account the if their employer plan is a onethat only covers seventy percent of costs right so there are a lot of expenses today actually therewas a report that came out the Milman index that the average family of four out-of-pocket the costfor to cover that is $28,000 a year it in 2018 so when you tell people this is what they're spendingbut they're not getting any tax credits for it and that by changing it to maybe a two and a halfpercent payroll tax or two and a half percent sales tax they would gladly switch especially ifthey know that they're not going to get denied all the time and they're going to have more enhancedbenefits no more co-pays no more deductible so.

Let's be really clear about what we're talkingabout we're talking about Medicaid for all right that's what the program at let's look at whatthe program actually looks like it looks like the Medicaid program 562 it doesn't look like theMedicare program and you see that because there's no premiums and no cost-sharing right exactlyjust wait at all the Medicare program there was no part ABC and D there's no it does not look likethe Medicare program if we pass Medicaid for all which is okay Medicaid is actually not terriblethere are winners and losers if you don't believe that you don't understand how life works thereare a lot let me start with the winners though let me start with the winners I'm not up heresaying like I actually think there are a lot of people that would be better off in the state ofCalifornia currently under a Medicaid for all type.

System under a 5 62 type system that's there's noquestion whatsoever about that many people who are uninsured many people in the individual marketsome people that have employer sponsored health insurance would be unquestionably better off under560 too many other people who have Medicare many other people who have good employer sponsoredinsurance many other people that have what they consider to be good policies in the individualmarket would be worse off under 562 it's not going to be better for everyone life involves trade-offsand I don't think that people are going to want to make those trade-offs when they're explainedto them so with regard to Medicare my mom is on Medicare and as you know it covers 80% of certaincharges outpatient charges her prescription drug prices she's a transplant recipient are extinctfortunately she has some supplemental insurance.

Offset that but there you know last year 45million Americans reported foregoing filling one prescription here in the United States twenty-twopercent were seniors I I do believe that Congress has constantly undermined Medicare and you knowthere's no bulk purchasing and Medicare there's no prescription drug negotiating and Medicareand so as a result if you gave those things the biggest cost driver for seniors right now is theirprescription medication and now of all of a sudden if you were able to do away with the 80/20 andthey had 100% coverage for out patient services and then you gave them better drug prescriptioncoverage I think they would come out ahead I know my mom would come out cool so let's let's behonest about this we're telling seniors your Medicare goes away but it's going to be coolthat's what we're telling them and maybe they.

Agree and maybe they think it's right and maybefor some people they well but let's be honest that it isn't Medicare for all it's no more Medicarefor all to get Medicaid for all no well I will say this that that technically it is technicallyit is technically because it's a state-run program right so Medicaid is a state-run program thatis 50 percent funded by the federal government 50 percent funded by the state or unless you're astate like Louisiana or one of the welfare states where you get a greater federal contribution so inthe sense that if we are setting up our own state program it is quote more of a Medicaid becauseMedicare is still something that's more federal but I I think that in using that term it begins toimply that it's a lesser care because we all know that frankly Medicaid in the state of Californiastinks compared to the other coverages that we.

Have and short of being uninsured but it is notthe Medicare aid that or médicale that people here currently have so it's the most like the thingthat stinks the most but it's going to be great it that that is a that is a marketing brandingproduct but it it is but you wouldn't call I know you don't want to call it Medicare Medicaidfor all but it is structurally more like Medicaid than Medicare which has a different a differentconnotation let me let me bring up something else it's really important to understand that iscurrently more than half of California funding for Californians for health care comes from thefederal government okay another 16% comes from employers both those things are currently outsideof what you think of as as single-payer within California and if we were to get single-payerhealth care in California that would require if we.

Want it to include the Medicare and Medicaid fundswhich is essential right that's more than half gotta get waivers from the Trump administrationokay now remember employers in America it's just controversial but it's true employers get taxbreaks for paying people how care giving people health care rather than wages so those are federaltax subsidies if we wanted employers to pay into a statewide pool also crucial for 562 to work thatwould require employers diverting their federal subsidies to this state-based fund which wouldrequire an act of Congress including a revision of the tax code so the question is whether that'sa good idea or not what likelihood do we think that's happening anytime in the near future it'sa real question has to have right right so and I think that is a legitimate argument as it standsright now with just let's take the federal waiver.

Clearly under this administration that would neverhappen but the idea is that and certainly under this governor would never happen we don't evenneed to get to the president because the governor is against it but but I would say this that inthe next in 2020 if we do have a president who is in favor of single-payer or Medicare for all itis far more likely for a state to pass it than a Congress that continues to be beholden to theprivate insurance industry and pharmaceutical industry that's why you do have a congresswomanfrom Washington Pramila jayapal who has introduced reintroduced the McDermott waiver to try to getstates to then be able to implement things so it's not something that happens overnight this issomething that is going to take time we have to get all the specifics ironed out to really satisfypeople like mica and others to make sure that it's.

There but the the federal waiver was always goingto be a problem but that was you know again you've got to tackle it step by step by step mm-hmm wehave a lot of questions here that have to do with the for-profit insurance industry and I wantto make a little statement see what you think about this and that is that first of all theinsurance tree is partly for-profit and partly not-for-profit and it's not really clear thatthere's a tremendous difference on average about how those insurers behave for one for-profit ornot-for-profit so the profit motive doesn't seem to be the main thing not for-profit insurers wantto get revenue as well in terms of single-payer it seems that just as Medicare Part B the hospitalbenefit for instance uses private insurers to administer it right presumably if we went tosingle in California there still would be some.

Role for insurers and not just around the edgesbut to do some of the administration piece as well and presumably some of those it sure's wouldstill be for profit I believe do you think that's the case that we think that actually matters verymuch because a lot of the questioners think it does we have a for-profit insurance tree existingat all I think the way that 562 was envisioned and written that that would not be the case that youwould have one central administrator of a big pool of money that would then serve as the distributorof that too and also can government employees yes okay unlike the way Medicare operates yes okayand as I mentioned about Medicare part at least let's let's take although the privatizationof Medicare the Medicare Advantage plans as I mentioned there was a study from Stanford MITeconomist that came out in 2017 that basically.

Showed that they charge twenty percent more perprovider eiper per enrollee and yet they spend less per enrollee they've not shown thatthey can be more cost effective than the the current Medicare system but that's managedMedicare some of those managed Medicare plans are not-for-profit and some are for-profit rightbut and then that's the whole other thing about this quote not-for-profit I think that certainlywhether it be insurance companies or whether it be hospital chains that are quote not-for-profitwe all know that they certainly behave in act as if they're for profit yeah I mean like Mike Ithink about overseas overseas yeah other countries use ensures sometimes some of them are for-profitinsurers yeah quote unquote single-payer systems it's totally agree with Paul we should get backto agreeing we're agreeing on everything higher.

And they got a little dicey ah but it's not whatyou make you know it's not whether you make money it's what you make money for doing you know ifyou have a any kind of health provider whether it's a hospital or a health insurer that is notbeing compensated for keeping people as healthy as possible then you have a bad system whether or notit's for-profit or not-for-profit it really comes down again to the incentives that these folks haveand so that's that's why people get worried about you know a single-payer system which is basedon a fee-for-service mentality because that keeps the costs in the in the health system highand growing because it provides an incentive for providers to provide greater volume rather thangreater value so the type of single-payer system even a canadian-style thing or pay a single-payersystem that I'd be more interested in and then to.

Be cool to sit down and talk about would be onewhere you think about how could you really utilize like operationally these a cos that were heldaccountable for health rather than a single-payer system which is just unlimited fee-for-service foreveryone I think that'd be really cool to think about right some great thinking there by the wayfantastic questions I've done a lot of programs at the Commonwealth Club this is a personal recordfor the number of questions and the quality is terrific I feel like we should publish these in abook and we could be here all night but we don't have time and unfortunately we're at the partof the program we have time for just one more question and I'm gonna ask the same question ofboth of you and here it is if single-payer health care were to become the law in California wouldthat make a national single-payer single-payer.

System more likely or less likely or the same ohI think you know again Vermont with a population of 500,000 I'm not sure would have much impactbut with now fifth largest economy in the world with a population of 33 million if you could showthat you could have better outcomes and greatly reduce costs I think States would be foolishnot to consider that well the questions with the feds then say we should do it again I think theproblem with the federal government and I got a lot of trouble for referring to elected officialsis that you have unfortunately a Congress that is still highly beholden to corporations andspecifically the pharmaceutical industry in the insurance industry yeah it's so like whatCalifornia does matters you know when I was on Laura Ingraham last night you know she was likegoing after California I'm like oh it's terrible.

To be living here in the fifth largest economyin the world that's creating the most jobs in the entire country yes it's a socialist hellscapeyou're totally right know what you know it's not everything's perfect here we have you knowour rate of poverty is too high we've got lots of things that we got to work on but absolutelywhat California does matters so what we should do is we should do the best thing and we can dothe best thing right not only operationally and the best thing of course I believe is more of aBismarck style system so we can get there right but it's also practical we can get there from hereso what we do matter so let's keep thinking about this let's keep proposing it let's keep havingsubstantive engaged conversations like this one I really appreciate having this conversationwith you really appreciate the super informed.

Audience and thanks for letting me chat at youfor a while right I'd like to thank our speakers dr. Paul song co-chair the campaign for a healthyCalifornia and dr. Michael Weinberg president of the Bay Area Council economic institute we alsothank our live audience here in San Francisco also our audiences on the radio television andthe internet marketer of the sedima project and now this meeting of the Commonwealth Club theplace where you are in the know is adjourned
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