California Dreamin'

Piecemeal reforms show the unwillingness of policy makers to take bold steps to deal with the nation's health care crisis.
January 2005
Penelope Lemov
By Penelope Lemov  |  correspondent
Penelope Lemov is a GOVERNING correspondent. She was GOVERNING's health columnist and was senior editor for several award-winning features.

Not content to be the national leader in environmental standards and Internet privacy laws, California has headed down the health runway at full throttle.

As almost everyone in the world knows by now, stem-cell research was on the ballot last November and won big-time. What got less attention were four other major health initiatives. California voters had the option of giving thumbs up or down to an expansion of mental health services, renovation of children's hospitals, a mandate for "play or pay" employer-based health insurance and a plan to cover uncompensated care provided by emergency health workers.

All totaled, the five health initiatives represented a broad approach to health care reform--from new therapies to expanded services to broader access to care for everyone. But the initiatives weren't, in fact, a package. Each program had to stand on its own, and in the end, voters went for three of them. Those that won voter approval--stem- cell research, mental health services and children's hospitals--were relatively narrow programs targeting a single, self-contained issue. The broadest of the initiatives--the health insurance mandate on employers--went down to defeat.

But the real point of the November balloting on health care is that the people of California spoke very directly to policy makers. And what they had to say may hold important lessons for other states bent on the very necessary task of tackling health care reform.

The first is that health care is very much on voters' minds. The grocery workers' strike in Southern California, which lasted four-and- a-half months and ended in February 2004, may have helped put it there, since health insurance benefits were at the heart of the battle between the grocery chains and their employees. But the grocery industry is not the only one where the high cost of health insurance premiums is affecting competitiveness. Across the country, companies in almost every sector are struggling with the issue, and those struggles get played out in local job markets.

The second lesson is voters' willingness to pay for solutions. Four of the five initiatives came with a price tag and a means of paying it. The initiative to float a $750 million bond to finance improvements in children's hospitals breezed through, with 58 percent of voters approving the measure. The mental health initiative called for a 1 percent tax increase on incomes over $1 million to fund expansion of mental health services and programs. It won with 53 percent of the vote. Stem-cell research was, of course, the high- profile, big-ticket item: a $3 billion bond to create a California Institute for Regenerative Medicine that would pursue cures for chronic and debilitating illnesses. It won with an impressive 59 percent of the vote.

The two measures that targeted the uninsured both lost, despite the fact that California has the highest uninsured rate of any state. The emergency care referendum, which called for an increase in a telephone surcharge to pay for uncompensated care provided by emergency health workers, lost by a landslide. The business-insurance initiative, which did not call for new taxes or bond financing, called on all companies with 20 or more employees to provide their workers with access to insurance--and pay 80 percent of the premium--or pay into a state fund that would provide the insurance. The initiative was an up-or-down vote on a law that the legislature had passed and former Governor Gray Davis had signed. Big corporations, such as McDonald's and Target, and the Chamber of Commerce led the drive to, in effect, use the ballot box to recall the mandate. They succeeded but by a squeaker of just over 50 percent of the vote. Putting that in perspective, Anthony Wright, executive director of Health Access Foundation of California, a patient advocacy group, noted recently that the close vote "shows that people are getting ready for a change. If we had taken a real walloping, we couldn't say that."

Three wins out of five opportunities is impressive, especially when the three health initiatives that won affect voters in their pocketbooks. So the third lesson I take away from the California vote is a signal to policy makers: If governors and legislators don't work with health care stakeholders to come up with a comprehensive approach to health care reform--taming costs, making access universal and maintaining quality of care--then voters will settle for piecemeal reforms. That is the easiest political road to follow, and it may be better than nothing. But just like its infamous referendum predecessor, the property-tax-limiting Proposition 13, it hardly lays the groundwork for resolving a very real problem in a logical and balanced way. It is a very clear symptom of the unwillingness of policy makers to take their courage in hand and try to deal with the big problems that are on their constituents' minds. And that would certainly define the devastating health care crisis that's now affecting not just the working poor but, increasingly, middle-class voters and corporate America.