Universal healthcare isn’t what you’d expect from a Republican governor.
But in Gov. Arnold Schwarzenegger’s move to the center,or to the left, some might argue,he’s proposed spending $12 billion annually in public and private money to provide health coverage to 6.5 million uninsured Californians.
The governor’s proposal requires employers with 10 workers or more to offer insurance or pay 4% of their payroll into a state fund. The proposal contains something that directly affects hospitals: a tax that’s part of what’s being called a “shared-responsibility” scenario.
Schwarzenegger’s plan resembles one passed by the Legislature in 2006 that he vetoed. There are questions about whether the federal Employee Retirement Income Security Act can stop his proposal in its tracks. Interest groups on both sides are picking at it (see Viewpoint).
The Business Journal’s Vita Reed spoke to hospital executives about Schwarzenegger’s proposal. Some of their comments follow.
Barry Arbuckle
Chief executive,
MemorialCare Health Systems
From an economic perspective, healthcare in the U.S. is in critical condition. Changes must be made. The governor’s plan includes the fundamental principle of “shared responsibility, shared benefit” and contains three key elements: prevention, health promotion and wellness; coverage for all Californians; and affordability and cost containment.
While these are key components for any sustainable healthcare reform proposal, the healthcare providers themselves must survive as well. Yes, affordability can be legislated. But hospitals and the system itself will fall into disarray if the real costs of care aren’t adequately covered.
The governor accurately points out what he terms the “hidden tax” in healthcare. Health plans, employers and consumers must make up for the shortfall in provider reimbursement from government-funded programs like Medi-Cal and from the uninsured.
In our state, 49% of hospitals operate at a loss. And those generating an operating margin hover around 4%. We have 149 fewer hospitals in California than we did a decade ago, and during that same period, the number of hospital emergency departments in our state dropped by 70.
Like our healthcare system, the governor’s plan is extraordinarily complicated and contains a multitude of elements that will be opposed by some group or another. It has been termed the plan that everyone loves to hate. But with a system in critical need of an overhaul, we must overcome immediate reactions and personal agendas to work together to craft a plan that accomplishes the goals set forth by the governor.
Kimberly Chavalas Cripe
Chief executive,
Children’s Hospital of Orange County
As a pediatric safety net hospital with the mission to nurture, advance and protect the health and well-being of children, Children’s Hospital of Orange County applauds the governor’s plan to expand existing programs to cover all children in need. This element of the proposal should be prioritized and implemented sooner rather than later. The governor’s complex concept may require a multiyear implementation process.
We are also encouraged that the governor and his administration recognized the need to improve reimbursement for healthcare providers who serve low-income patients through the Medi-Cal program. About half our patients in the hospital and close to 75% of our clinic patients receive services through Medi-Cal or other government programs. Since current Medi-Cal reimbursement rates fall significantly short of covering the cost of care for our patients, underpayment for Medi-Cal has long been a primary concern for CHOC.
Ultimately, CHOC’s position on the governor’s proposal will be based on the answer to this question: Will it enable CHOC to better serve the children of our community?
Maureen Zehntner
Interim chief executive,
UCI Medical Center
All Californians should have appropriate access to needed healthcare. The governor’s proposal to secure healthcare coverage for all represents a significant and serious effort to accomplish this goal.
Our healthcare delivery and financing system is badly in need of repair, including Orange County’s healthcare safety net for our most vulnerable populations, which is severely frayed. UC Irvine Medical Center is eager to work with the governor and others to find realistic and sustainable solutions to this serious issue.
