≡ Menu
Share

Last week’s decision by the California Senate to approve a single-payer health care bill (SB 562) was ridiculed by our local daily newspaper, which editorialized on June 6 that “Single-payer health vote just a political stunt.” The editorial concluded SB 562 “is a glorified political stunt which, if it proceeds with the same thoughtlessness shown to date, could do real harm to the state of California.”

That’s a bit insulting to Mark Stone, our local Assembly member who is co-sponsoring SB 562, and to Bill Monning, our local Senator who voted in favor. Furthermore, it’s contrary to the only comprehensive economic analysis of SB 562 available so far, the 82-page economic analysis by Robert Pollin, cistinguished professor of economics at University of Massachusetts/Amherst, who was economic spokesperson in Jerry Brown’s 1992 campaign for U.S. President. Pollin’s analysis concludes “establishment of the Healthy California single-payer system [SB 562] will generate financial benefits for both families and businesses at all levels of the California economy.”

The editorial argues the approval vote “was a proposal lacking crucial details without which a responsible vote in favor is impossible.” That’s correct on the minor point that SB 562 does not lay out the specific tax structure it would establish nor does it offer supporting calculations about how that structure would fund its implementation. However, the major point is that SB 562 commits California to a single-payer system that will provide coverage to all Californians at a lower total cost than what we pay now. Pollin’s study explains specifically how SB 562 would reduce California’s total health care costs while expanding coverage (9% increase in costs to cover uninsured and underinsured, 19% reduction in health care costs due to a variety of savings measures such as lower cost prescription drugs by negotiating directly with Rx companies) equals 10% net savings.

Thus, SB 562 meets the financial test (we would get more for less) and the moral test (we would cover all of California’s citizens regardless of income). Moreover, the exact funding structure must be established before the system becomes operational (SB 562 states it will not become operative until the secretary of California Health and Human Services certifies there is revenue to fund costs of implementation).

The major point is that health care costs would go down by 10% even after moving to universal coverage; the minor point is that the exact details of the funding mechanism have not been determined at this stage.

The editorial also argues SB 562 should be voted down because it will raise taxes. However, the issue is total health care costs, not labels for how these costs are paid. California businesses and citizens currently pay roughly $200 billion per year for health care. They pay this through something called “premiums” and “out of pocket costs,” and in return for these payments they cover 90% of the state’s population. Under SB 562, California businesses and citizens will pay less than what they pay now through something called a “tax” and for this they will get 100% of the state’s population covered. In other words, Californians will get more for less because we can either pay something called a “premium”’ and “out of pocket,” or we can pay something called a “tax.”’ The important point is not what you call it; what’s important is how much you pay and what you get for that.

The editorial overlooks some of SB 562’s honest-to-goodness problems. For example, before SB 562 becomes operational, it must still must be approved by the California Assembly and, eventually, by Governor Brown and ultimately by the voters, because it would need to be exempted from spending limits and budget formulas in the state Constitution. Additionally, the Trump administration would need to allow federal funding currently directed to Medicaid, Medicare and Obamacare (among others) to be re directed in California. Significant transitional issues will occur as California moves to this new system, and details about deductibles, copays and similar cost sharing measures must be worked out, as must the final payment/contribution structure for businesses and individuals, plus near-term health costs are likely to surge as the uninsured and under insured immediately receive care they have delayed.

However, those real problems are minor points compared to the major point that by passing SB 562, California will commit itself to a path where it receives more for less. The editorial’s concerns are akin to objecting to JFK’s first call for the U.S. to put a man on the moon by saying “that is just a political stunt, he has not even figured out how phase three, sub procedure six of the re entry procedure will work.” It is true that phase three, sub point six had not been worked out at that time, but that was a minor point that paled in comparison to the major point of whether the U.S. should commit to send a man to the moon.

I am not proposing we send a man to the moon; I am proposing Partisan readers not be fooled by one-liners and take seriously that SB 562 is California’s chance to provide health coverage to all Californians at a lower total cost than what we pay now.

Jane Haines is a retired lawyer who lives in Pacific Grove. She has previously written for the Partisan on housing issues and development issues.

Comments on this entry are closed.

  • Dan Turner June 10, 2017, 10:17 am

    I felt just as Jane did after reading The Herald’s editorial but I would never have been able to compose as cogent a response to it as she did. Right on the mark, Jane!

  • Alice June 10, 2017, 10:43 am

    While a mandatory participation, single payer system is clearly best, the one thing the successful single payer systems around the world have that we lack is any form of cost control for services and meds. Until that component is built in, there will on ongoing, rapid inflation of costs that ultimately will be unsustainable.

    • Keith McCallin June 26, 2017, 3:33 pm

      Agree Alice!

      The nonsense out of D.C – left and right, is how do we we re-jigger and re-configure the for-profit based insurance system to better effect – which is a fools pursuit destined for failure. But it is also a fat red herring as the nobody is talking cost containment… as health care as a percent of GDP higher and higher… It’s a leader backed backed looting.

  • Jo Ann Novoson June 10, 2017, 10:50 am

    👍

  • Luke Coletti June 10, 2017, 10:58 am

    It’s hardly a “minor point” when a program needs to be “exempted from spending limits and budget formulas in the state constitution”! A recent newsletter from the Howard Jarvis Taxpayers Association (below) perfectly illustrates that senate democrats share the belief in unlimited government and the contempt for tax limits (such as Prop 13). Further, HJTA mentions that SB 562 (single payer health care, an unfortunate euphemism for a state run monopoly) is estimated to cost $400 billion, a truly astronomical figure, considering the Apollo 13 program cost $25 billion.

    Sacramento Democrats Kill Morrell Measure to Reaffirm Commitment
    to Protecting Taxpayers

    Today, Democrats on the Senate Governance and Finance Committee blocked Senate Resolution 39 by Senator Mike Morrell (R-Rancho Cucamonga), a measure that would have recognized the historic passage of Proposition 13 and its role in keeping property taxes low for homeowners. The committee’s rejection of this measure comes on the heels of the largest gas and car tax increase in California history and the Senate’s recent passage of a single-payer state-run health care bill estimated to cost $400 billion and that could increase personal tax bills by more than $9,200.

    “It has become increasingly clear that Sacramento Democrats do not believe there should be any limits on the amount of money that can be taken from hardworking citizens to pay for growing government,” said Morrell. “Proposition 13 has empowered seniors on fixed incomes to stay in their homes and made homeownership possible for millions of first-time buyers. Senate Resolution 39 would have recognized this fact and shown the people of California that this body is in strong support of the initiative almost four decades after voters passed it.”

    Proposition 13 was overwhelmingly approved by California voters in 1978 to lower property taxes. During a time of economic uncertainty, the law ushered in welcome tax stability and certainty. Today, Proposition 13 continues to save individual new homeowners and small businesses thousands of dollars annually in property tax payments. The initiative still remains popular with voters 39 years later.

    “As we celebrate the 39th anniversary of Proposition 13, we can be thankful that property owners have saved hundreds of billions of dollars in property taxes,” said David Wolfe of the Howard Jarvis Taxpayers Association in support of Senate Resolution 39. “The stability of Proposition 13’s one percent cap has been imperative to not only keep seniors in their homes and small businesses afloat, but also to allow millennials to overcome high home prices to be able to live out the American Dream.”

    “Only in the California legislature would standing up for a law that saves homeowners money and prevents them from being kicked off their property be considered controversial,” continued Morrell. “Today’s vote should be a red flag to taxpayers, as it further reinforces the fact that Democrats want to see Californians pay even more of their well-earned money to the government.”

    Senate Resolution 39, supported by the Howard Jarvis Taxpayers Association, failed passage in the Senate Governance and Finance Committee by a final vote of 2-5. Committee members voting in favor of low property taxes were Senators John Moorlach (R-Costa Mesa) and Janet Nguyen (R-Garden Grove). Committee members voting against the resolution were Senators Jim Beall (D-San Jose), Ed Hernandez (D-West Covina), Bob Hertzberg (D-Los Angeles), Ricardo Lara (D-Bell Gardens), and Mike McGuire (D-Healdsburg).

    • Jane Haines June 10, 2017, 3:51 pm

      The proposed single payer healthcare system would cost a staggering $400 billion per year, that is true. The only figure that is higher is the cost of our current healthcare system, which costs 10% more.

      • Luke Coletti June 10, 2017, 5:57 pm

        “This year’s state budget in California, by the way, is about $180 billion. That means that implementing a single-payer health care system would require doubling (at least) the state’s current tax burden. The analysis of the health care proposal presented to lawmakers on Monday suggests a 15 percent increase to the state’s payroll tax to provide the necessary revenue.”

        http://reason.com/blog/2017/05/23/california-single-payer-health-care-cost

        • Jane Haines June 10, 2017, 9:48 pm

          You can call something a premium or you can call it a tax. Most people don’t care what you call it, they only care how much it is. Taxes < premiums. Single payer cost current insured. This isn’t complicated.

          • Jane Haines June 10, 2017, 9:51 pm

            Should say – single payer cost < current insured.

          • Luke Coletti June 11, 2017, 2:27 am

            No, it’s not complicated, that’s why I’m a bit confused by your claim that the costs of the current system are 10% greater than the estimated $400 billion price tag for a state run monopoly.

            If you assume the state would retain the existing $200 billion in local, state and federal funding it currently receives and then add to this the $100 to $150 billion that employers currently pay you get a $300 to $350 billion total, which is not 10% greater than $400 billion ($440 billion), like you are claiming. Where is the missing $90 – $140 billion to make your numbers add up?

            http://www.sacbee.com/news/politics-government/capitol-alert/article151960182.html#storylink=cpy

      • Luke Coletti June 10, 2017, 6:01 pm

        “The Sacramento Bee notes that, even after accounting for an estimated $200 billion that could be saved by replacing current state-run health programs with the single-payer program, the state would still need to come up with $200 billion annually.

        This year’s state budget in California, by the way, is about $180 billion. That means that implementing a single-payer health care system would require doubling (at least) the state’s current tax burden. The analysis of the health care proposal presented to lawmakers on Monday suggests a 15 percent increase to the state’s payroll tax to provide the necessary revenue.”

        http://reason.com/blog/2017/05/23/california-single-payer-health-care-cost

  • john moore June 10, 2017, 11:41 am

    As a 55 year lawyer, my experience indicates that the “elephant in the room” for universal healthcare is “pre-existing conditions(PC).” The cost to treat PC destroyed Obama care and is the reason that the current administration cannot suggest a better plan.

    PC is spectacularly expensive, especially when coverage is provided for citizens who have not been paying premiums. I believe that the federal government should insure PC, because it controls the money supply and can just print money to pay for PC if the premiums are insufficient. That may sound irresponsible, but it is the only way that universal healthcare will see the light of day. With PC taken care of, it would be comparatively simple for insurance companies to provide health insurance at a reasonable cost. It is impossible to underwrite PC because of lack of reliable cost estimates, as proven by Obamacare. PC is very almost always underestimated and prevents a reliable barometer of future costs.

    As for the state of Ca. underwriting PC, it already has the worst financial rating next to Illinois. In my view, Pat Brown was the best governor in Ca. history and son Jerry, the worst by a wide margin. Given the trillion dollar deficit for govt. employee pensions and another trillion deficit for govt. health benefits, it seems counter-intuitive to bet on this governor and legislature to take on a universal health care system that has an open end cost because of PC.

  • Bob Oliver June 10, 2017, 12:09 pm

    At 70 years of of age the most relevant thing I could believe was that the country was being taken over from “with-in”. I learned this at age 5 and continued to prove it out to this very day. Since then I’ve learned and accepted that you can see UFO’s every night with PVS-7 third generation night vision goggles, September 11th 2001 ( 911 ) was definitely an “inside job”, about 99 percent of United States local population believe “The government lies to us about ‘EVERYTHING’.” The conclusion being “We are in ‘DENIAL’.” WAKE UP!https://www.youtube.com/watch?v=4utTbJ6b-Tg
    Bob Oliver 831 383-2676 boboliver9@gmail.com

  • bill leone June 10, 2017, 12:30 pm

    If Universal Health Care is such a bad idea with respect to pre-existing conditions, then why does France, which has a Single Payer Health Care system have the Best Health Care System of any civilized, industrial country in the World, as per the World Health Organization? Moreover, “pre-existing conditions,” Before Obamacare,
    was used as an excuse by insurance companies to deny coverage &/or charge obscene fees for “special, marginal” insurance. I know this, because I was booted off
    Blue Cross, Blue Shield, because, after I sold my business, & was not able to qualify for group insurance, & due to the fact that my medical records indicated I had been treated for a sprained knee, & I was referred to an audiologist to check my hearing. My hearing is fine, & I have been playing tennis, running 10k’s, & remain in excellent health. The term “pre-existing condition” is a sham used by insurance companies to exploit everyone who needs healthcare. If you’re concerned about costs, you should focus on the extra 10 t0 30% profit the insurance companies must generate (to support the multi-million dollar salaries of their executives), & a Single Payer Health Care System would not.

    • Dan Turner June 10, 2017, 10:29 pm

      Bill makes good points about pre-existing conditions being a phony, or non-existent, issue in single-payer plans. Not only the French but also the Canadians and many other countries find it possible to cover everyone not only w/o breaking the bank but, also, being able to control medical costs much better than in our system in the US. It should be obvious that if you want the most expensive medical system in the world that also delivers poor service (or none at all) to enormous numbers of people, just have it run by insurance companies who are interested primarily in profits and secondarily in nothing else.

      • john moore June 11, 2017, 8:27 am

        France, Canada, Switzerland et al have covered volitile pre-existing conditions from post world war II forward. The U.S. has not. Since WWII our population has doubled, so we have created tens of millions of citizens w/o coverage for pre-existing conditions and to instantly grant that coverage is a huge expense. That is why pre-existing conditions must be underwritten by the federal government, at least until there is a couple of decades of universal coverage so that all new born are universally covered from birth.

  • John Pearse June 10, 2017, 3:32 pm

    Jane’s cogent response to the editorial in the local daily should be published by that same local daily for its readers to see.

  • Karl Pallastrini June 10, 2017, 7:36 pm

    Janes summary is once again on target. Having said that, so are many of the responses on the other side of the issue. The problem that simple folk like me have is trust in the government of California to get this right. With increased gas and license fee taxes, voted in hastily and w/o public input to repair our aging highways, creates doubt in the representative process. One might ask…how about the Billions of dollars involved in Brown’s pet project the bullet train? How about fixing the existing infrastructure first, and then committing tax payer dollars to future transportation projects? Bill is correct in his comments about pre-existing conditions. It is a scam by insurance companies to preclude services to people that need it. For me…there are still too many layers for profiteering on the road to what should be a basic human right for all of our citizens…affordable health care. As a career educator, I have an inside perspective on how many tax dollars are wasted in the public system…not to mention the disparity between the have’s and have nots. Can our elected officials be trusted to implement a Single Payer Plan effectively?

    • Jane Haines June 10, 2017, 10:02 pm

      My main criticism of the Pollin report is that it did not consider the cost of fraud. The General Accounting Office perennially ranks Medicare and Medicaid as the two government programs with the highest level of fraud – according to the GAO roughly 11% of every dollar paid in claims is fraudulent. I strongly favor moving to a universal health plan, and agree with moving to a single payer plan, but an alternative to consider is creating a single California healthcare exchange where all Californians purchase private health insurance for a fixed percentage of their income, with the State being the single payer for all the health premiums. We would get all the benefits stated in the Pollin analysis, but eliminate fraud since the private sector is better at managing that. This would leave the actual operation of the healthcare system itself to the private sector which, if properly regulated and with an arms length relationship with the government, would likely produce a better outcome as well as serve as a potentially more politically appealing alternative with conservatives. Regardless, a single payer system which guarantees healthcare to all Californians is the right way to go.

      • Dan Turner June 10, 2017, 10:46 pm

        “…if properly regulated…”. Proper regulation is a real problem in our era of “regulatory capture” where individuals and businesses w/enormous (unlimited?) amounts of money to apply to our political system via our legalized form of bribery that we call “campaign contributions” can get people appointed to regulatory agencies who will not enforce the regulations. What has Canada, or other countries, done about fraudulent billing? I doubt that this is a uniquely American problem.
        One of the reasons that the Canadian system has worked as well as it has for as long as it has is that there are people up there who are constantly on the alert for insurance companies, or any other sort of private company, trying to get a foot in the door, so to speak, of their single payer system. So, I’m not saying that billing fraud isn’t a problem, just that I doubt that the idea of letting private companies, especially insurance companies, have a role in the administration of the program will have any sort of a positive result.

        • Luke Coletti June 11, 2017, 2:54 am

          That’s right, much better to have a bureaucracy manage things.

          • Dan Turner June 11, 2017, 11:16 am

            The only thing that is worse than a government bureaucracy managing your health care is an insurance company executive doing it w/his or her eye on the value of his or her stock option package which depends on reducing costs (i.e. : not paying for your healthcare expenses). Give me the govt bureaucracy every time, thank you!

  • James Toy June 10, 2017, 7:49 pm

    My observation of news reporting on this coincides with Jane’s. These reports all talk about new taxes needed to implement a single-payer plan, but I have yet to see a single report (in the supposedly “liberal” media no less) that mentions that businesses and individuals alike will no longer have to pay insurance premiums for themselves or their employees. If it can be demonstrated that the taxes will be less than premiums, then everybody will come out ahead, and business interests should overwhelmingly support single-payer. But irrational anti-tax and anti-government ideologies will cloud the issue in many people’s minds, making simple math controversial.

  • Alan Haffa June 10, 2017, 9:19 pm

    Thank you Jane! Now in the next few months we need folks to call Assemblymembers. Mark Stone is solid but we have quite a few who are not so reliable and need to be reminded how important this is.

  • bill leone June 10, 2017, 10:13 pm

    Actually, James you have quite a relevant point: businesses in countries that have Single Payer, or some other form of Universal Health Care, (AKA: “Socialized Medicine,” if you’re a die-hard Conservative), & that includes nearly Every other country in the World, do not have the additional burden of paying for their employee’s health care. This is a tremendous advantage in the Global Marketplace, which the US, & many Free Marketeers, have yet to figure out.
    Bill Monning & Mark Stone’s efforts to pass SB 562 make me proud to be an active member of the Democratic Party. Moreover, I don’t read the Herald any more; they seem to be on the Wrong side of Every issue, not unlike KSBW’s editorials.

    • Dan Turner June 10, 2017, 11:05 pm

      I agree w/Bill and just want to add that, although reactionaries may call any sort of government program “socialized medicine”, the Canadian single-payer system and most other countries’ government administered or mandated medical systems are not “socialized medicine”.
      Military and VA health care is socialized medicine where the government employs the medical personnel and owns the real estate on which the hospitals and clinics sit (along w/the hospitals and clinics themselves). Kaiser is the same sort of a system except that Kaiser is some sort of a non-profit that has been able to remain true to the vision of its founder. The socialized medicine model of delivering medical care can be very successful at delivering high quality care at reasonable costs if it is not starved for funds and is properly administered.
      The point, however, is that what we are talking about w/SB562 and with the Canadian single payer system is not socialized medicine in any way, shape or form. Doctors will still own their own practices, hospitals will still own their own equipment and none of the employees of the actual medical system will be government employees. The government will negotiate fees w/doctors’ organizations and w/hospital organizations and, then, a relatively small government bureaucracy will simply pay the bills as they come in.

      • Helga Fellay June 12, 2017, 10:03 am

        As far as I know, the model Dan describes above in Canada is the same model of “socialized medicine” practiced in Germany. Doctors own their own practices, including their own equipment, they hire their own staff (who are not government employees) and many of them even own their own small clinics for inpatient care. The government (like under Medicare here in the US) sets the amount the doctor can charge the government for services provided. The only difference is that instead of billing various and sundry insurance companies, the practice only bills the government, thus streamlining and reducing the costs of billing. Any way you look at it, it’s a win/win situation for patients. Physicians, it is my guess, would earn less than they do now, but still make a very good living.

  • Bill Boosman June 10, 2017, 10:41 pm

    I suspect that a savings of 10% is a gross underestimate.

    The rest of the developed world manages to pay an average of 60% of what we do, and gets better results! People like Luke like to scare Americans with talk about higher taxes but ignore that we spend roughly 17% of our GDP on healthcare costs. Does American exceptionalism mean that we can’t do what the rest of the world can do?

    http://www.pgpf.org/chart-archive/0170_international_health_spending_comparison

    • Dan Turner June 10, 2017, 10:49 pm

      I agree completely! Well said!

    • Luke Coletti June 11, 2017, 2:42 am

      I suspect the 10% savings is nonsense. Also, I’m not ignoring anything, quite the opposite. You, on the other hand, are ignoring that Medicare, which you reference, will soon be insolvent. Your solution appears to rely on America becoming socialist Europe, no thanks! Socialism is scary and I’m happy to “scare” those wise enough to listen.

      • Bill Boosman June 11, 2017, 9:54 am

        Oooo! Scary socialistic countries, where there’s greater social equality and people live longer, happier lives! So scary!

        If republicans would allow Medicare to simply bargain on pharmaceutical costs, as any business would, it would go a long ways towards solving the balance sheet.

        • Luke Coletti June 11, 2017, 10:49 am

          Yep, it’s those darm republicans.

        • Helga Fellay June 12, 2017, 10:08 am

          Thank you Bill. What I forgot to mention is that the government also limits what Big Pharma can charge for drugs, thus limiting Big Pharma’s outrageous prices, which are sometimes 1,000% (yes, three zeros) marked up from what they could or should be. Big Pharma is the only real loser if we switch to single payer as practiced in other, more advanced countries.

  • STEPHEN MILLICH June 11, 2017, 9:45 am

    It does not matter whether medical insurance is a right or a privilege if it is a responsibility of a civilized society to provide it; but until costs are controlled there can be no effective reform.

    • Helga Fellay June 13, 2017, 12:22 pm

      precisely, Stephen, and only the government has the authority and power to control costs. Anything goes in the private sector, and Big Pharma knows that when it comes to pain and/or dying, people are willing to pay whatever for that pain pill or that life-saving treatment, and Big Pharma shamelessly exploits this to satisfy their unlimited greed. This may be the #1 reason why it has to be a government administered health care system, in which the bureaucrats administering it cannot personally profit from it. Voters also have some measure of influence over how government controls it, whereas the arrogant Skrellys (sp?) or Big Pharma CEO’s are accountable to no one and don’t give a flying flipper about what voters think of them.

  • Tom June 11, 2017, 9:52 am

    Just remember, when the gov’t is in sole control of something, it is a MONOPOLY. Like all monopolies, the first things to suffer are innovation & customer service – not to mention that the customer loses all control over costs through a system of no choices. I’m sure the politically favored drug companies will love that! If you know or like how the VA works, you’ll love California Single Payer. Please, California – don’t be fools. BTW…..did any of you stop to think about how to pay for this? What with perpetually increasing property taxes, astronomic rents, high speed rail still on the table, coddling costs for the homeless, rising gasoline taxes (supposedly for infrastructure/road maintainance), ridiculous regulations of “you-name-it”, etc – can you afford another “fee”, “tax” or what ever you wanna call it out of your dwindling income? Better think about it clearly. The Peoples Socialist State of California isn’t going to be all lollipops & roses.

  • Luke Coletti June 11, 2017, 11:08 am

    Ms Haines has claimed the cost of our current healthcare system is $440 billion and yet the study she cites (Pollin et al – text and link below) mentions that it’s $368 billion. So, which is it? Again, according to the study, and the many assumptions contained therein (e.g., continued federal funding, significantly reduced pharmaceutical costs, etc…), this proposed state run monopoly (SB-562) would represent a 10% increase, not a decrease.

    Cost Estimate of Universal Health Care Coverage in California:

    “Total spending on health care in California at present is $368.5 billion. This represents 14.2 percent of California’s 2016 GDP….The primary goal of Healthy California is to provide high-quality health care to all California residents. We estimate that to achieve this under California’s existing health care system would increase overall costs of the system by 9.6 percent. Health care spending in California would thus increase to $404.1 billion under the existing system.”

    http://www.healthycaliforniaact.org/wp-content/uploads/Pollin-Economic-Analysis-SB-562.pdf

    • Jane Haines June 11, 2017, 1:26 pm

      Luke, you want figures, here are the figures:

      1. California’s current healthcare system costs $368 billion per year.
      2. $225 billion of the current system is paid for by the state of California, plus the federal government.
      3. The remainder of the current system is paid for by premiums (paid by businesses and individuals) as well as out of pocket expenses (paid by individuals). So, total premiums and out of pocket expenses paid by California citizens and businesses are currently $143 billion ($368 billion total cost minus the $225 billion paid for by government)
      4. Under the single payer system, the total healthcare costs would go to $331 billion. Of this $331 billion, $225 billion would continue to be paid for by the government from current sources, and they would need an incremental $106 billion from new taxes ($331 billion total cost minus $225 billion they are currently paying)..
      5. So, California residents and businesses have a choice, they can pay $143 billion in something called premiums and out of pocket expenses, or they can pay $106 billion in something called a tax. They don’t care what you call it, they just care how much it is. $106 billion < $143 billion. Single payer is better.
      6. They also care what you get for what they pay. Under current system, they pay $143 billion and get 90% of our citizens covered, under single payer they pay $106 billion and get 100% coverage. Single payer is better.
      7. So, the simple math is: $106 billion 90% coverage, California citizens and businesses pay less, and get more.

      There’s a simple description for this – a good deal.

      Here’s another way of thinking about your argument – the single payer system offers a simple proposition to Californians – pay me $106 billion, and I will give you back your $143 billion. Your argument seems to be – “that single payer system is crazy, do you know they want us to give it $106 billion?” You forgot the part about us not having to pay the $143 billion anymore. You also forget about 100% coverage versus 90%. Combine that with your focus on labels (premiums and out of pocket expenses versus taxes) and you, frankly, get your specious argument.

      • Jane Haines June 11, 2017, 3:23 pm

        The above figures are from Pollin’s economic analysis of SB 562.

        Here’s what I think you misunderstand:

        Current system costs $368 billion

        However, it then increases by 10% to cover uninsured.

        You neglect to mention the study then says costs drop by 19% due to efficiencies.

        So net cost reduction is roughly 10%.

        In other words, you only cited the increase; you did not include the reduction.

        • Luke Coletti June 11, 2017, 6:16 pm

          First, thank you for correcting your earlier claim (mistake) about the current system costing $440 billion. You (and others) are clearly cherry picking and letting idealogogy cloud your judgement. I think what you misunderstand is that most, if not all, of your claims and citations are based on false assumptions regarding reductions in overall costs.

          • Jane Haines June 13, 2017, 8:10 am

            Luke,

            Your latest response is that “most, if not all of [my] claims and citations are based on false assumptions regarding reductions in overall costs.”

            Your characterizing the cost reduction assumptions as “false” is unsupported by specific facts. The Pollin report outlines in some detail the cost reduction assumptions. I reviewed them and found them to be specific, credible and conservative. Rather than just saying the analysis is based on “false assumptions”, perhaps you could outline specifically which assumptions you believe are false and why?

            To illustrate what I mean by being specific, I will focus on one cost reduction assumption to illustrate why I believe it is specific and credible (versus “false”), specifically the Pollin report’s projected reduction in prescription drug prices Californians would enjoy under single payer system (projected at 30%). According to the Organization for Economic Cooperation and Development (OECD), in 2013 the per capita spending on prescription drug prices in the U.S. was by far the highest of any other country, roughly $1,000 per capita. The second highest country (Canada) was roughly 40% below that and the average for a range of wealthy, industrialized countries was more than 50% below the U.S.

            The per capita spending in the U.S. is higher versus other countries for two reasons – our per capita consumption of prescription drugs is higher (for example, even though we are only 5% of the world’s population, we consume more than 80% of the world’s opiod/pain killer prescriptions), and our prices are higher. There are a range of measures California could adopt under single payer to reduce per capita consumption, however, to be conservative the Pollin report disregarded that and instead focused exclusively on reducing prices.

            The prices we pay in the U.S. is significantly higher than prices paid in any other country. According to the Wall Street Journal, the price difference exists because compared to other countries “The U.S. market…is highly fragmented, with bill payers ranging from employers to insurance companies to federal and state governments. Medicare, the largest single U.S. payer for prescription drugs, is by law unable to negotiate pricing.”

            Under single payer this would no longer be the case. The State of California would negotiate with drug companies directly the same way other countries do, piggybacking with the VA to get volume discounts, There is no comprehensive analysis showing exactly what the price reduction is that would result from this, but here are a range of analyses regarding our drug price differences versus other countries:

            “Prices in the U.S. for brand-name patented drugs are 50 to 60 percent higher than in France and twice as high as in the United Kingdom or Australia.” (PBS)

            In 2013, the International Federation of Health Plans did a comparative pricing report of medical costs by country, including prescription drug prices. In simply comparing prices for eight different common prescription drug, it found U.S. prices on average would be reduced by 51.1% if our prices were brought in line with the rest of the world.

            In December 2015 Bloomberg did an analysis of average prices paid in the U.S. versus selected other countries (roughly 10) for a range of prescription drugs after the effect of discounts were taken into account (i.e. the net price paid versus the list price). For seven drugs, they found if the U.S. brought its prices in line with the country paying the second highest price in the world, it would reduce prices by an average of 34.6%, and if we brought our prices in line with the average price paid by these other countries we would reduce prices by 57.4%. The Pollin report listed a number of additional data as well, completely supporting the assumption that a 30% reduction in Rx prices is credible and conservative.

            Based on all of this, it is clear that conservatively we can reduce our prescription drug prices by 30%, however, the actual expected savings would probably be higher, probably on the order of 55%.

            The discussion above is what I mean by being specific. If you want to characterize the cost reduction assumptions in the Pollin report as “false”, please explain why – specifically.

          • Luke Coletti June 30, 2017, 3:25 pm

            Jane,

            Although you originally claimed: “SB 562 is California’s chance to provide health coverage to all Californians at a lower total cost (10% less) than what we pay now”, I have shown that it would actually cost (at least) 10% more, an approx. 20% delta. You then claim that by reducing pharmaceutical costs by 30% we can narrow this 20% delta. However, when you examine Pollin et al they report that an assumed reduction in pharmaceutical costs by 30% only amounts to 3.4% of the total 13% reduction in potential cost savings identified in Table 7. Your argument is presented as if reduced pharmaceutical costs can save the day but the numbers don’t back you up. By the way, the rest of the potential savings outlined in the report (Unnecessary Services, Insufficiently Delivered Services, Missed Prevention Opportunities and Fraud – see Table 8) again sound like they might be doable but are likely just wishful thinking. I’m afraid you have a long way to go before you convince me, especially when your original claim of SB 562 costing less immediately came up short after just a little digging. Even Assembly Speaker Anthony Rendon stated that SB 562: “didn’t make any sense.”…“It just didn’t seem like public policy as much as it seemed a statement of principles. I think your article here reflects the same.

            http://www.sacbee.com/news/politics-government/capitol-alert/article158363674.html

  • bill leone June 11, 2017, 2:33 pm

    Another example of Free Marketeers bloviating at length about a subject they know nothing about.
    There are so many examples of countries with Universal Health Care, which demonstrate better outcomes (higher quality health care for more people, & longer average life spans) for less cost. It reminds me of the 1950’s when (even doctors) were refusing to admit cigarette smoking was related to incidences of lung cancer (Read: The Emperor Of All Maladies).

  • john moore June 11, 2017, 5:25 pm

    I just heard Sen. Lindsey Graham say that 90% of health care costs relate to 10% of the population. He recommended that those cases should be covered by a federal Government Managed Care Program. He didn’t seem to realize that if his 90 v. 10 statement was true, the federal govt. would pay for 90% of healthcare(which would be fine with me). He didn’t discuss how his plan would be financed(of course).

    • Luke Coletti June 11, 2017, 6:08 pm

      They never do, it’s all based on unrealistic assumptions and false premises.

  • Luke Coletti June 11, 2017, 6:09 pm

    Jane, you fail to realize or discuss the false assumptions baked into your claims.

  • Karl Pallastrini June 11, 2017, 7:53 pm

    Hello Luke…not knowing you, but knowing Jane, my experience is that she is one of smartest ladies on the planet. It is unlikely that the data and facts have eluded her. No one can be spot on when spinning numbers, especially when the numbers are subject to interpretation, conjecture and a certain measure of BS provided for the purpose of supporting a position. She is on to something.

  • Julie Engell June 12, 2017, 7:47 am

    Thanks to Jane for fleshing out the argument in support of SB562 and to the Partisan for providing a forum for our most important discussions, something our news media seems incapable of doing anymore.

    SB562 would be a huge undertaking. If it passes, implementing it will require patience, courage, resolve and an abiding sense of humanity from our citizenry — qualities largely absent in our current political atmosphere. I’m not sure, given legislative term limits, where we’ll even find the continuity of leadership to see it through.

    I do believe that healthcare is a moral imperative, but that’s my value system. I would favor universal healthcare even if it costs more. Yes. If it meant knowing that everybody could receive the care they need, I’d pay more. I think it’s important to avoid waste, but I’d pay more to get more. I also accept that a fair percentage of people out there probably think my thinking is nuts. That’s why the economics are so important to reaching some sort of broad consensus.

    Anyhow, like Jane, it frustrated me that reportage and discussion of SB562 focused on increases to the state budget without any mention of what citizens pay now and what it buys us. It’s also frustrating to me that there’s little to no mention of what the overall economic impact is of a healthcare system that’s broken. What happens to our economic productivity when workers and/or their families get sick and stay sick because of inadequate healthcare? What is the collateral impact on purchasing patterns and how does that impact overall economic activity? What is the collateral impact on social support services as families sink into poverty, bankruptcy, homelessness?

    I don’t know the answers to those questions, but we should consider them when we decide whether or not we can afford to take care of each other.

  • Diane Cotton June 12, 2017, 8:30 am

    Thank you, Jane, for your intelligent, thoughtful and caring analysis. Of course, we should cover 100% of persons in need for health care. It is the right thing to do.

  • bill leone June 12, 2017, 11:31 am

    The “answer,” if anyone needs one, to the questions regarding Health Care, & many other social, economic & environmental problems is: We cannot, at this time, or any time in the near future, afford to Not take care of each other.
    When a growing number of people are sick & not taken care of, we (eventually) will all suffer, & we can say the same about Mental Health, poverty, hunger, homelessness, Global Warming, Income Inequality, & other personal & social ills.
    Moreover, the rationale for allowing people to suffer, using an out-dated, cruel, incorrect ideology of Social Darwinism, which was designed to resolve the cognitive dissonance between Christianity, Slavery & Colonization, has no basis in economic reality or historical facts.

  • Bill Boosman June 12, 2017, 9:36 pm
  • Julie Engell June 13, 2017, 1:19 am

    Bill, I don’t believe we’ll win the universal healthcare debate by preaching to the choir, which is why I suggested appealing to the other side’s economic self-interest. You think Social Darwinism is a morally bankrupt philosophy. So do I. So what? You think you’re going to change adherents’ minds by telling them they’re morally bankrupt? That kind of strategy worked real well in the last election, didn’t it?

    To win the big fights over the long haul, the Democratic Party needs to solidify its existing support, expand its base and build alliances that cross party lines. That’s going to take a lot more than strident, condescending rhetoric. That’s going to take talking to skeptics about what’s important to them, not blathering on about what’s important to you. I don’t see much of that leadership quality around. Without it, SB562’s chances are slim — for passage, for implementation or for long term survival.

  • bill leone June 14, 2017, 1:34 pm

    I have had this debate before, with people who thought it was a good idea to Reason with White Nationalists over the merits of Integration & the drawbacks of Segregation. I am no longer interested in hearing arguments in favor of perpetuating our current For-Profit Health Care System, or to brain-dead rationalizations for ignoring or down-playing the risks of Climate Change, or Promulgating “Second Amendment Rights,” or not extending Civil Rights to members of the LGBTQ community. I have no time for such nonsense, but perhaps You Do. What is important to me is Political Strategy Period. Because, while we waste our time listening to Idiots who base their political ideology on Social Darwinism, the less fortunate among us will suffer & die; that is the Purpose of Social Darwinism: to undermine empathy & care for our fellow citizens.

  • jim guy June 17, 2017, 3:06 pm

    It’s a minor point that it doesn’t lay out the tax structure. LOL Funny stuff. Might be time that we require that state legislatures pass basic math.

  • Jim guy June 24, 2017, 5:24 am

    Assembly speaker just killed this pipe dream. It appears there is at least one person in Sacramento capable of basic math, so I modify my previous comment.

  • Keith McCallin June 26, 2017, 3:29 pm

    Well written piece. Thank you Jane