FEATURE ARTICLE

Reforming the Health Care Non-System

By Clinton Lane, MD

In researching this article, I was almost paralyzed by the wealth of information recently published relating to the U.S. health care “system.” (Let’s face it, health care is a vast, expensive non-system that rewards profits and results in non-coverage of 47 million Americans.) My sources include the Annals of Internal Medicine, the New England Journal of Medicine, AMA’s eVoice and even the North Bay Bohemian (please contact me for specific references).

The big picture is just that—but how does it apply to Sonoma County’s patients and physicians? Certainly the under-reimbursement by Medicare is well known, and now Medi-Cal reimbursement is slated to be cut by 10% as of July 1. The mental health picture becomes more parlous by the day. (And we all know Gov. Schwarzenegger’s statewide plan for health care is dead in the water.)

The country as a whole cannot indefinitely sustain the growth of health care spending (16% of GDP as of 2006), nearly double that of the 30 countries comprising the Organization for Cooperation and Development. Administrative costs for health care account for 31% of overall costs; in contrast, CMS reports about 2% administrative costs for Parts A and B of Medicare and 1% for Medicaid. These statistics buttress the many strong voices calling for a single-payer system, but the obstacles to such a solution remain daunting (read: insurance companies and Big Pharma’s campaign donations and lobbying efforts). At least some of the candidates for the November elections are proposing incremental reforms.

For those of us whose practices live and die by Medicare reimbursements, a long-term fix to how those are calculated would be welcome, and the AMA and state medical associations are maintaining the pressure on Washington to make that fix. As individual physicians, we can and should do our part to keep hammering our elected representatives on this topic.

What about local alternatives? I find the Healthy San Francisco (HSF) plan of April 2007 fascinating. (For details, see Katz M, “Golden Gate to health care for all?” NEJM, 2008;327-329). A phased start-up, HSF is a restructuring of San Francisco County’s health care safety net, not an insurance product. Their health department administers a universal-access model for inpatient/outpatient care, prescriptions, durable medical equipment, mental illness and substance abuse. (Dental services, organ transplants and long-term care are not covered).

Eligibility includes all uninsured residents aged 18 to 65. If the residents are eligible for Medicare or MediCal, they are enrolled in these programs as well. Participation is free for low-income residents; others pay quarterly and point-of-service fees. HSF mimics many of the benefits of managed care, and the provision of coverage gives security to San Franciscans even if they change jobs or become unemployed.

There are some drawbacks. Care must be provided at the patient’s “medical home,” and so far only San Francisco County Hospital is participating for inpatient care. Emergency care elsewhere is not covered (though EMTALA still applies). HSF will not pay for care received outside San Francisco, and enrollees will lose their benefits if they move outside the city. Administrative costs are anticipated to be around 5%.

The HSF model, unlike insurance, gives the county access to certain state and federal revenues. Financing is to include existing county funds for the uninsured, which were $123 million in 2007. Twenty million more will come from other government health programs, and a three-year health care expansion award from the state will add $24 million to the budget yearly.

There is also a controversial employer mandate for employers of 20 or more people. Over the objections of the local restaurant association, the 9th Circuit Court of Appeals recently allowed the HSF plan to go ahead.

The HSF model may be applicable to Sonoma County. Our populations are similar in number and demographics. Systematizing services provided by clinics, hospitals and physicians should improve our health care outcomes.

HSF is a work in progress. It should, however, be a model for other efforts. Healthy Sonoma County, anyone?