Policy Today magazine cover
September 20, 2006
California Ed.

PT talked with California Assemblyman Joe Nation, a longtime advocate of health care reform, about SB 840 and his vote on the controversial universal health care bill.

PT: You've been as active as anyone in the California legislature when it comes to health care reform policy, yet you voted against SB 840. Why did you decide to vote against the bill?

Nation: There are two reasons why I voted against SB 840. First, this is nothing more than a political drill. As you know, we posture a lot up here. A lot of issues are obviously very political. But I think that this is a case in which we need to sit down in good faith and come up with a viable solution.

I went to the annual DLC conference in Denver about a month ago and sat on a health care reform panel with a state legislator from Massachusetts. The difference in attitude between her delegation and ours was just remarkable. Their goal was to solve the problem to control costs, to insure everyone and to deal with all those difficult issues that we have in health care. But that's not what we do in California. We have a broken political system.

The second reason is purely based on policy. I don't believe that a single payer, or government-run system—is the right way to handle the problem. I'll just highlight a couple of the problems. First, let's assume that we have enough revenue from this 11% combined tax. Then we can actually fund health care. But what happens in two years, three years, five years? We enter a position of having to ration and ration significantly. Either that, or we have to go back and look for a revenue increase, and I don't think anyone would be willing to raise taxes by $100 billion. Even if you've got personal income growth at 5%, if you have medical cost and inflation at 15%, then you know that you'll be facing a 20-25% shortfall within a couple of years in order to cover everyone.

I think single payer generally does what a lot of political promises do. It says, "We will give you Cadillac coverage—medical, dental, vision and everything else except plastic surgery—and it will cost you less." I don't know who would believe that single payer health care would be able to do that. If you look at single payer systems elsewhere, in Canada especially they're having the same types of problems that we face here—technology, utilization and demographics. Those are things that are really causing the system to spin out of control. Until we deal with those issues we're not going to solve the health care problem at all. It may make everyone feel good for a day or two, but people would come back down to earth quickly. I could support some sort of a limited single payer system at the national level in which you don't have a Cadillac plan, you have basic coverage and people understand what's in it,
but it's much more difficult to do this at the
state level.

PT: You mentioned the practical challenges to health care today such as changing demographics, inefficient utilization and new technologies. Can you outline some things that can be done to
address these issues?

Nation: Absolutely. Keith and I did that last year with Assembly Bills 1670-1676. We've talked about mandating electronic medical records and having a loan or grant program to help small offices and hospitals to move to EMRs and EHRs. We know that that will save 8-10% in the system right there. We put in for something called the "Center for Quality Medicine," which would evaluate best practices and determine which ones should be funded and which shouldn't. It would help determine which drugs should be reimbursed for and which shouldn't. Of course, these would just be recommendations; doctors and insurers could make the ultimate decision.

Keith had one example to explain the need for something like the Center for Quality Medicine. He would talk about this particularly expensive colon cancer drug; it costs about $100,000 a year. Unfortunately, it only extends life for colon cancer patients by three to four months. We have to ask ourselves, "Is $30,000 to $40,000 the amount of money we want to be investing for that amount of time?" Now, if I had colon cancer, I'd probably say, "Sure." But from society's perspective, it may be better for us to take that $30-40,000 and put it into preventive medicine like child immunizations—things that we know really work. So, in his mind, the Center for Quality Medicine would evaluate those kinds of questions. It would act as a kind of independent think tank that would study things in an unbiased way in order to give accurate guidance.

Another important but somewhat unrelated issue are the seismic retrofitting standards for California hospitals. It doesn't make sense to spend $41 billion on seismic retrofits when you have other areas of the system in much greater need. I'm not suggesting you don't retrofit, not at all. But as wealthy a country as we are, we aren't that wealthy; we have to pick and choose what we're going to fund.

PT: These all sound like relatively modest, achievable goals.

Nation: Not in Sacramento.

PT: It seems like many legislators want to knock the ball out of the park, or, on the other side, play defense against anything that comes up against their ideology. Why can't you get consensus on
small steps like these that don't appear to be emotional issues?

Nation: Well, part of it is that small steps don't sell well to the public. If I go out and make a speech on cost containment and talk about the things we need to do to control cost, most people are going to yawn and turn off. But if I start talking about single payer health care, people stand up and say, "Yeah, I'll take it!" It's a much easier sell. It's not terribly honest to promise more than you can deliver, but I think that's part of it.

There are very reasonable steps and solutions but we just can't seem to get there. And that opens up a broader set of questions about how broken our political system is and what we need to do to fix it.

PT: Assemblyman, thank you for your time.

Assemblyman Joe Nation represents California's 6th Assembly District and the people of Marin and Sonoma Counties. He is the director of the Office of Policy Planning and Research and serves on the Committees for Veterans Affairs, Appropriations, Business and Professions, Human Services and Local Government.