|May 12: Sacramento, Calif. - A report released today by the California Association of Health Underwriters (CAHU) sheds new light on the debate over how to reform California's troubled health care system. According to the CAHU Report, a government-run single-payer health care system in California will decrease personal choice, result in long waits for care, require significant tax increases and place huge costs on the state at a time when it continues to deal with serious fiscal challenges.
The state association, representing more than 2,500 health insurance professionals serving millions of California consumers, also revealed the results of a statewide public opinion survey, in which a solid majority of Californians indicated that a single-payer system would not result in better quality health care compared to the current private system.
The primary objective of the CAHU Report was to analyze the theory and evidence on centralized health care systems and apply those findings to the practical application of a single-payer style health care system in California as proposed by State Senator Sheila Kuehl in her bill, SB 840. The CAHU Report identifies a number of flaws in the fundamental assertions made by single-payer proponents, and it details a number of negative impacts that SB 840 would have on the delivery of care if implemented in California.
John E. Schneider, PhD, of Health Economics Consulting Group (HECG), authored the CAHU Report as a policy analysis of the proposed California legislation.
HECG includes a group of academic health economists and health services researchers, including faculty from the University of Iowa, Texas A&M University, University of California Berkeley, Emory University, University of Louisville, University of Nebraska, Purdue University and Washington University.
"We hope that California's health care leaders, advocates and elected officials will work together to develop a comprehensive, workable solution to the problems of the uninsured. Good policy is good politics and it will take a bipartisan and balanced approach to build a great California solution," stated Jim Price, CAHU President.
The single-payer plan envisioned by Senator Kuehl is a variation of the less-than-successful government-controlled health care system seen in other countries such as Canada or Great Britain. These state-run systems have seen significant problems in recent years, particularly in terms of rationing care that results in extremely long waiting periods for critical health care services, ballooning tax burdens and high levels of dissatisfaction among patients.
The CAHU Report demonstrates that nearly one-half of California's uninsured residents are currently eligible for an assortment of public and private health coverage options. However, the state has continually fallen far short of making sure that those uninsured residents are aware of, or enrolled in, those coverage options.
Further, the CAHU Report points out that administrative cost savings estimated by single-payer proponents are inaccurate because they drastically overstate private health insurance administrative expenses, estimating them to be $9.7 billion in 2006. In reality, health care administration costs typically fall between $5-6 billion annually, and have been shown to be declining over the past several years. In fact, administrative functions are the primary defense against fraud and abuse.
If single-payer supporters are overestimating cost savings to that extent, the CAHU Report raises serious questions about the size of the new tax increases that would be needed to finance single-payer. It is estimated that at least $95 billion in new tax revenues would be needed to finance a state-run system.
Complementing the CAHU Report, the results of a recently conducted statewide public opinion poll were also released, demonstrating voter awareness and opinions on various health care issues. The poll examined the preferences of more than 1,000 high-propensity voters throughout the State of California on an assortment of health care issues. Strategic Research Institute (SRI), a California-based research firm conducted the poll. SRI routinely predicts outcomes of voter preferences within 1 percent to 2 percent of actual voting behavior.
Key findings of the survey indicate:
- Respondent's individual satisfaction with health care they received in recent years, and with their own health care plan is at 78% and 76%, respectively
- 44% feel dissatisfied with the state's current health care system
- 65% believe single-payer would result in more administrative problems, not less
- 62% oppose increasing employer payroll taxes to fund health care
- 59% believe that single-payer would not provide better quality health care than the current system
"Virtually everyone recognizes that our current health care system is in a state of crisis, but this study confirms that replacing our current public-private system with a the state-run system will not result in the quality health care availability and affordability that single-payer health care presumes to offer," stated Dave Benson, President-Elect of CAHU.