Eric Leenson, Co-Director of the Business Alliance for a Heathy California, speaks to host Lisa Kiefer about the status of Single Payer Health in California and how a simpler, publicly funded system would deliver real reform.
Transcript:
Lisa Kiefer:Method to the Madness is next. You're listening to Method to the Madness, a biweekly public affairs show on KALX Berkeley, celebrating Bay Area innovators. I'm your host, Lisa Kiefer, and today I'm speaking with Eric Leenson, the co-director of Business Alliance for a Healthy California. They believe that healthcare is a human right, and that all Californians should have affordable, high quality, cost-effective healthcare.
Eric Leenson:Hello. Thanks for having me, Lisa.
Lisa Kiefer:You have always been a person I think of around sustainability, and in this new venture, you're working to make healthcare more sustainable as we move to the future, all of us citizens of the US. Tell us about what you're doing at the business alliance for Healthy California.
Eric Leenson:Essentially, we created the Business alliance for a Healthy California about a year and a half ago, to support the implementation of a single-payer type system here in California. You know, we can get into discussion about what single payer means, but it was kind of a response to what's been happening in Washington, where we see all kinds of major roadblocks, as far as protecting people's healthcare and in not even talking about expanding it. So here in California, we have a very strong group of people who have been pursuing single payer healthcare for a long time.
And back in 2017, the California Nurses Association sponsored a bill called the Healthy California Act, Senate Bill 562, which would bring a single payer healthcare to the state of California, because we just don't see it in the cards on a national level for long time. But here we are in California, as everyone likes to say, the fifth largest economy in the world. We should be able to provide quality healthcare to all of our people.
Lisa Kiefer:But, as we all know, this SB 562 is dead in the water right now.
Eric Leenson:Right now, it's dead. Basically-
Lisa Kiefer:So tell us what happened, and what's going to happen.
Eric Leenson:Okay. The bill garnered really amazing grassroots support and it passed the Senate, so it was approved by the California State Senate. In the assembly, it was blocked primarily by the Speaker of the Assembly, who did not want it to come to a vote.
And he didn't want it to come to a vote, in my opinion, primarily because it's embarrassing to the Democrats. There's no Democrat these days in California, that's not "for single payer," but you know, we have people that really support it and are ready to implement it, and others who say they support it, because politically it's convenient.
Part of of where the Democrats are going, certainly in California, but also nationally, is in the concept of a Medicare For All-type program. So what you have is a situation where, on the legislative floor, if the bill had been brought up, then the Assembly people would've had to take a vote and show whether they supported this for real or not. And it was much easier just to sort of stall on it.
It wouldn't, he didn't allow it to go to committee. Even for further review and discussion, they were claiming, "Well, the bill's inadequate," and there's no doubt there was more that needed to be flushed out in the bill, but that's part of what the Assembly's supposed to do through their committees, and they wouldn't even allow it to go to committee.
At this point, there is no bill. What's happened is, I think everyone's got their attention really focused on the elections coming up in November, particularly the Governor's race.
Lisa Kiefer:Right. I want to talk to you about John Cox, the Republican candidate, versus Gavin Newsom's position on single payer.
Eric Leenson:Well, it's pretty much black and white-
Lisa Kiefer:Yeah.
Eric Leenson:In many ways, although there's always gray with, when you talk about politicians, the black and white part is that John Cox is absolutely opposed to any form of single-payer.
Lisa Kiefer:Is he fiscally opposed? I read that there's a range of, from $330 to $400 billion is what people are saying it's going to cost Californians.
Eric Leenson:Well, so what I would say is that as a Republican, he's opposed to it not only financially, but ideologically. He does not believe that government should play an extensive role in healthcare. So these would be the same Republicans that want to cut Medicare, because it's government-controlled, in a way.
Finance, I should say, not controlled. Gavin Newsom has been a strong proponent of single payer, and in fact has a history of introducing healthcare reform when he was mayor of San Francisco. So he has been an outspoken proponent of single payer, and that's the black part.
The gray part is, well, when you actually get elected, what do you do? Because health care represents 20% of the entire economy of California, and nationwide, as well. You're not talking about a small budget item, you're talking about an industry, whether it be pharmaceuticals, hospitals, physicians, insurance companies, that affects a huge swath of people.
And when this gets out, you know, it gets discussed. It affects people's interest dramatically. I mean, basically ,if single payer were to be implemented, there would be no role, not much of any role, I should say, for private health insurance any longer. Can you imagine how many people would possibly lose revenue, because they sell insurance, or the insurance companies are making a lot of money.
So, you have the problem, whenever you're dealing with trying to make major reform to the healthcare system. And it's extraordinarily complicated. I don't mean by any stretch of imagination to try to simplify it. You're going to have huge vested interests. Everyone uses healthcare, so everyone's concerned about what their healthcare is going to look like as a consumer. And you have, as I'm suggesting, a tremendous number of industries and businesses that basically survive on the revenues that are generated through healthcare.
So it makes it difficult, and it makes it difficult for an elected official to really implement. They're going to need strong support from backers in the legislature, and insistence by the general public that this is beneficial.
Lisa Kiefer:So I was thinking about this, a great percentage of money will be saved. It seems like if inefficiencies will be gone, so you're going to save a lot of money, but all of those people who deal with the phone calls to the insurance company are without a job. So whoever has to figure out this fiscal analysis has to incorporate job loss to the state. Very complicated.
Eric Leenson:It's very complicated.
Lisa Kiefer:And do you know if that cost-benefit works?
Eric Leenson:Well, let's put it this way. Virtually every study that's been done, that I'm aware of, shows enormous cost savings through single payer. If you look at the numbers right now, the administrative costs of private health insurance are around, between, let's say 10% or 15% administrative costs. For Medicare, which is, in fact, single payer-
Lisa Kiefer:Single payer, yeah.
Eric Leenson:The administrative costs are 3%, so you're talking off the bat, you know, 10-12% savings. Just by streamlining that system, number one, and part of that administrative savings isn't only on the insurance side of it, you know, who's financing. It's also on the doctor side.
You realize that in this country, every doctor has to hire me. I mean, every two doctors have to hire at least one or two administrative people, just to deal with the billing. I mean, we all have the experience of going to the office, and, "Are you covered by this, are you..."
They spend endless amounts of time, instead of giving healthcare, on the phone, arguing with the insurance companies, whether or not there's coverage. This simplifies that entire thing.
Number two, the other large savings is that if there were a single payer, they would be able to negotiate pricing, with hospitals and with pharmaceutical companies, because right now we pay so much more in the United States for healthcare than any other country industrialized country in the world. It's kind of ridiculous. I mean, we're spending, often, more than two times as much as any other country and not getting results that are even as good as those countries. It's all about the cost.
Lisa Kiefer:If you're just tuning in, you're listening to Method to the Madness, a biweekly public affairs show on KALX Berkeley, celebrating Bay area innovators. Today I'm speaking with Eric Leenson. He's the co-director of Business Alliance for a Healthy California. He's working to educate and organize the business community to support universal health care.
Eric Leenson:Back to your question, there have been studies done, and serious academic studies. You can imagine, this debate's been going on for decades, and in the case of California, let's just hone in on California.
Yes, the cost of cost of healthcare in the system right now, everyone kind of agrees on, is about $400 billion a year. And the opposition, the single payer has done a great job in propagandizing the role of who's paying for what? So they come out with this phenomenal number of increase in taxes.
Well, let's walk through the numbers. So let's say it's $400 billion right now. That's $400 billion being spent, where you still have 3 million people in the state that don't have insurance, and you have 14 million people in the state who are underinsured. Under insured means they "have coverage," but the deductibles and the copays are so high, they can't afford to use their insurance. So they don't go for the help they need.
Lisa Kiefer:It's just catastrophic, at that point.
Eric Leenson:Yeah. Yeah. Well, it often gets a catastrophic, because they're not going on a preventative basis. But what people don't understand is, right now, of that $400 billion, 70% is already being paid by government, 70%, if you add in, you know what the federal government is paying through Medicare, through Medicaid, which is huge, especially in the state of California.
What local governments spend, think about it, all the government employees there are in the state. All the firemen, all the policemen, all the teachers, they have health insurance, right? So you're talking about 70%.
What you're really looking at funding is 30%. Well, where does that 30% come from? That comes from premiums, and typically, a lot of it is paid for by employers, and some of it's paid for by employees. And some of it is just paid by individuals who aren't employed at all.
Well, it's all about how you look at the pie. The numbers show that you could probably insure, you could probably implement a Medicare For All type package in California, for everyone, paying less than what we're paying today. So there's savings in the system. The problem is, where are those savings coming from?
And that is, I pay premiums for my health insurance. Is that a tax? I mean, we're playing a little bit of a semantics game. Someone's paying this money. There's $400 billion in the system. That's what we're paying. So why do people say, "Well, if we use single payer, and it costs," let's say, 400 billion, it'll actually costs less than that.
Why do they say, "Well, we have to raise all these new taxes?" Well, it's because, instead of paying healthcare premiums, people will pay taxes. That's the difference. So based on studies, serious financial studies, it appears that single payer is financially feasible, without the scare of all these new taxes. The money's there.
Lisa Kiefer:But will we continue to get the money from the federal government, if we win on single payer here in California? Or would it be cut off?
Eric Leenson:Okay. It is dependent upon continuing to receive the funding that exists in the system today.
Lisa Kiefer:Both state and federal.
Eric Leenson:Correct. One of the largest stumbling blocks is about the federal portion, because it's not impossible. In fact, it's very likely that Washington, under this administration, would refuse to go along with this. There are what are known as waivers available for states to experiment and do different types of financing within healthcare, still using federal money, but it's got to be approved by the federal government.
So it's not impossible. But when people raise the question about, "Well, it's going to be a really hard slog to get this done, because we're not going to have the federal government." Well, the reality is that shouldn't prevent us from doing it.
I mean, it's like saying, "Well, we shouldn't regulate our car emissions, because we got to fight the federal government." What's the difference, in some sense? And the reality is, given the breadth and depth of the healthcare system impact on the overall economy, this is not something that's going to happen overnight.
So it makes, in my opinion, lots and lots of sense, to get California prepared, to be able to launch a program. And by the time we have the laws in place and things happening, then we'll hopefully have a new type of administration in Washington, and see about those possibilities. But it's going to take time. If we don't start preparing now, we're really going to be caught cold.
Lisa Kiefer:Are there other states? There are other states that are experimenting with single payer.
Eric Leenson:Not really.
Lisa Kiefer:You know, I used to lives in Massachusetts, and that was-
Eric Leenson:What? That's Romney Care.
Lisa Kiefer:Okay.
Eric Leenson:Now, I mean, the difference between single payer is literally, you're taking private insurance companies out of the mix.
That's where a lot of the savings come from, because I would contend that they provide no value. What they are are middlemen who collect a revenue, for basically not doing anything, and they game the system so that they can maximize their revenues.
This is why you see, I mean, you know, getting into the business part of this... In the 562 bill, because you asked, there were clear provisions within that bill, there's a certain amount of money allocated for job retraining. So you asked about the people-
Lisa Kiefer:Yes, whenever there's a disruption, people retrain jobs.
Eric Leenson:Yeah. There's tremendous concern. No one wants anyone to get hurt on this, but you know, it's the reality. Okay, well, should we continue hiring longshoreman to unload ships by hand, and not use technology?
Lisa Kiefer:Right. So I think you explained what single payer actually is.
Eric Leenson:Well, [crosstalk 00:14:29]-
Lisa Kiefer:Why don't you say it again, for people who... unless you don't really care.
Eric Leenson:Okay, what's really important to understand, single payer is not what people think is "socialized medicine." It's not government control of the services, medical services, that people receive. Right now, the way Medicare works is, the federal government is the financer of this. They set the rules of what can be paid for certain services, devices-
Lisa Kiefer:Prescriptions-
Eric Leenson:Prescriptions, things like that. Although, unfortunately they can't set the prices for prescriptions.
Lisa Kiefer:The Veterans Administration can.
Eric Leenson:Yeah, the Veterans only, but it has nothing to do with the actual provision of medical services. So I, as a Medicare recipient, go out and I pick the doctor and the plan that I want, and the government does not control that. And all of the services I receive are run by individual plans, clinics, doctors. It's not owned by the government.
So, understand we talk about single payer, it's only the financing part. It's got nothing to do with the benefits that you receive as a consumer. If anything, it will help regulate them, so that you get better services, and you know what you're entitled to, rather than having to play this game.
I mean, you probably know, that you can go to eight different hospitals in the same area, if there were eight hospitals, everyone would have a different price.
Lisa Kiefer:Right.
Eric Leenson:And there's no way of knowing what you're getting, what the value is, and the prices are extreme. It could be 300% more in one place than the other, with absolutely no difference in service, right?
Lisa Kiefer:So you've got the support of nurses, and do doctors generally support this too? I would think they would.
Eric Leenson:I would say there are a number of doctors who do, and then there are many who don't, because they fear that since the government will regulate pricing, that they may not be as profitable as they were. I would say it kind of breaks down to the primary care physicians, for the most part, are in favor.
Think of it this way, in some sense, and I don't want to take this comparison too far. Kaiser's like a single payer. Kaiser has hospitals, Kaiser has medical staff, so they're providing a one-stop service. You Pay Kaiser, and then you have all your medical care taken care of. Unfortunately, Kaiser is also an insurance plan. So Kaiser is against this, because-
Lisa Kiefer:And they have high deductibles, depending on what you choose, I mean-
Eric Leenson:Yeah. They're an insurance company, and unfortunately, the insurance company kind of dominates, I think, when it comes to the issue of single payer. But no, I think in the cases you're describing, there would be huge benefits.
We allow doctors, and you talk to Canadians, doctors for example, who've been here and been there. It says, you know, single payer gives them a chance to really be doctors, instead of administrators and paper pushers.
Lisa Kiefer:And I've saw something like this, I watched a wonderful documentary that I got through you.
It's called, Fix It: Healthcare at the Tipping Point. And in these next few minutes, you'll see the history of healthcare. It hasn't always been like this.
Speaker 3:In 1969, Blue Cross Blue Shield had a community rating. Everybody paid the same rates. It was a truly nonprofit, and in every state, they were, Blue Cross Blue Shields were regulated to serve the public interest. That's what we gave up on.
Speaker 4:Some executives at life insurance companies saw an opportunity to come into this area, to come into this space, and make some money. So they came in and started offering cut-rate policies, but only to those who were younger and healthier.
Speaker 5:The group of people subscribing to Blue Cross Blue Shield became less and less healthy, more and more expensive, forcing the Blues to raise their rates more and more. And by the late '70s, early '80s, in every state in the union, the old Blue Cross Blue Shield model was dying. These companies were going bankrupt. Nonprofit companies couldn't make it.
Speaker 4:For-profit insurance companies over the years became so dominant that they actually controlled, came to control the healthcare system. They bought a lot of the Blue Cross plans. A lot of the Blue Cross plans now are for-profit companies.
Speaker 6:The US has, we're on the shortest length of stays in hospitals of any country, and we're told we have to shorten it. We go to the doctor about 4.2 times a year. The Japanese go 13 times. So we're told that we use too much healthcare, and we have to restrict access to save money, when in fact, we're below average when it comes to comparable countries.
Speaker 5:The whole system is set up to discourage people from using healthcare.
Speaker 7:The insurance companies are specialists at figuring out ways of covering less or paying less, the sicker you are.
Speaker 4:So not only are people having to pay more money out of their own pockets for care in these plans, or they're finding that the choice of providers has been narrowed.
Speaker 8:As a primary care physician, I have selected the specialists that I'm most comfortable working with. As it stands right now, I've got to say to my staff, "Check if Dr. Brown is a member of this patient's insurance." And so, referrals are so much more limited in the current system.
Lisa Kiefer:They interviewed doctors, they interviewed business people, and that was the fascinating part, and I wanted to talk to you about that as how healthcare today affects small and medium-sized businesses. What have you seen as the challenges it presents?
Eric Leenson:It's good that you've differentiated small, medium size from really big businesses, because they're two different animals entirely.
In the case of small businesses, single payer would be a huge boon to small business.
Lisa Kiefer:And why is that?
Eric Leenson:Because under the Affordable Care Act, they're, they're not required to have insurance unless they have, I forget the exact numbers, either 25 or 50 employees. So you have a lot of small businesses, let's say 20 employees that basically are on their own, have to deal with the private health insurance market, and simply can't afford to have insurance.
So right now, as I recall, of small business, only about 20% provide any health insurance for their employees. And it's not, they don't want to, it's, they really don't think they can afford it. So a single payer plan would really be beneficial to small business. Their employees would therefore have health insurance.
So what that means, in the case of small business, is first of all, it gives them a boost in competition. Because right now, what happens, you're a small business, and you can barely pay a wage, but you can't provide benefits. Well, guess what? If you get a good employee, if you're able to get a good employee, qualified employee, as soon as they get an offer at a bigger company that's providing even a comparable wage, but providing benefits, they're gone.
Lisa Kiefer:They take it. Because people need benefits.
Eric Leenson:People need benefits, because you can't exist in this society.
Lisa Kiefer:And they have children, and-
Eric Leenson:Right. So, basically, it would sort of level the playing field for them, in a way that doesn't exist today. It would also be a real boon for entrepreneurs. Because a lot of people that would like to start their own businesses don't do it, because they're afraid of leaving where they are, because I have health benefits. And they can't go out on their own, and you know, they're taking a risk already by opening a business. You're doubling that by the question of providing for healthcare.
Now I should mention this. I mean, the Affordable Care Act, it was passed,, Obamacare has helped the situation. I mean, a lot of people are able to get health insurance now, that are entrepreneurs, that weren't able to previously. But that's all up in in question.
Now this will be tremendously beneficial for small business. Large business is a different story. It's a different story, because again, they have the resources to function within the system. Warren Buffett, the famous investor, has called healthcare the tapeworm of the US economy. You can't have a globally competitive economy that has 20% of the cost of healthcare.
I mean, right now, the US businesses that go to Canada, and have the, the single payer system there, you know, are thrilled, because it reduces their costs significantly.
Lisa Kiefer:And they can put that money toward capital investments, and-
Eric Leenson:Employment, the whole, the whole business.
Lisa Kiefer:Yeah.
Eric Leenson:But you've got a situation in which, and in fact, there are a lot of initiatives now, starting up, of private companies that are beginning to do their own health insurance.
I know there was a very, there's a very famous new grouping formed by Warren Buffett, I'm going to get this wrong, I guess Microsoft, and Citibank, I guess, that is looking into how they can provide health insurance for their combined million employees. Because they can't fathom the present system as being so expensive, that it's just not workable for them.
Lisa Kiefer:And so, what you, backing up to what you said about large. So you're saying, it doesn't affect large businesses so much, because they have so much more money
Eric Leenson:Well, it does. I mean, it's gotten to the point where it is affecting large business so much, that they're looking for alternative solutions, but at the same time, they're not really interested in doing a generalized single payer type route for the whole society. They believe, first of all, for the businesses that don't want to do single payer, they believe they can handle it regardless, because of their incomes.
And the other thing that's important is, a lot of the larger businesses, especially in like a Silicon Valley situation, they use health benefits as a perk to get employees, to attract employees. So there are a lot of large companies that don't want to give up the control of healthcare, because they see that as a way they provide value for their employees-
Lisa Kiefer:Right.
Eric Leenson:In a competitive mode. The other aspect is, you know, ideologically, there's generally a distrust of government. And even though you can show the numbers till you're blue in the face, they're going to raise this as, "Well, you know, we prefer a private enterprise solution. We don't trust government. The quality's going to be bad. Who's going to really be responsible?"
So those are the issues. But at the same time, as I started to say, it's gotten so out of control, the costs, have gotten so out of control, that businesses now are beginning to set up their own alternative systems, in which they will negotiate the prices of services.
For example, now you have companies that are contracting with specialized hospitals around the country, whereby, if one of their employees needs a specialized operation, they send them to that hospital rather than a local hospital.
Lisa Kiefer:To most people here, it's a no brainer. Is there anything that could go awry with a single payer system here? What could go wrong?
Eric Leenson:What could go wrong?
Lisa Kiefer:Yeah.
Eric Leenson:The people putting it together could be incompetent, and really not make it as efficient or as beneficial for the general population. I mean, it's got to be done carefully. It's complex. You run into a situation where you're now giving all these wonderful benefits to citizens. What happens in the case of an economic downturn? The government's on the hook now.
Lisa Kiefer:Yes, in this case, it would be the state of California.
Eric Leenson:Well, if there were single payer in California.
Lisa Kiefer:Yeah.
Eric Leenson:Yes, yes.
Lisa Kiefer:And Jerry Brown had said that he, in 10 years, he predicted a serious downturn.
Eric Leenson:Right.
Lisa Kiefer:I don't know what he was basing that on specifically, but-
Eric Leenson:Right. But then, I think it's important to look at values. I mean, you look at what a government is for, what our society should stand for. Well, it seems to me, that healthcare is a right, that everyone should have access to good healthcare. And if you have to pay for it, well guess what? You have to pay for it. And you figure out how a society should do that.
Maybe there are other parts of the budget that are not so important as healthcare might be, especially for people that don't have any, or are really underserved.
Lisa Kiefer:Well, what is it people should be looking at?
Eric Leenson:We have the elections coming up now in November. I would really encourage people to look at the candidates, and what their standards are on this issue of single payer.
And again, unfortunately, you have to go below the surface, because rhetorically, all the Democrats are going to be it. But within the Democrats, you have people that really want to push it now, and others who are gradualists, that say, "Look, we can't do anything for the foreseeable future. It's not worth the time."
Well, that I think that's a defeatist attitude that we have to, you know, look out against. I mean, I know, here in this Assembly race, we have a situation like that, where there's one candidate who probably is mouthing the words, because they sound good, and one who's really serious about it. Then I would say, once the elections happen, to really hold people's feet to the fire, if they're elected based on the fact that they're going to do something, really, don't let them get away without doing anything. Just sort of, you know, work.
There'll be groups organized to put pressure on legislators to continue to fight for it. I mean, again, it's going to be a process. There's so many stakeholders involved in this issue. There needs to be coming together of the various groupings.
And one thing that has happened, you're probably not aware of, is that in the last budget, there was a $5 million allocated to set up a commission to study how to implement what they call unified healthcare financing. Now, they specifically didn't say single payer, but we believe the intention is to certainly consider single payer within that. Because it'd be very interesting to see-
Lisa Kiefer:You're not involved in that-
Eric Leenson:How it goes.
Lisa Kiefer:Are you, on that committee?
Eric Leenson:Oh, no, no, no. This is going to be, this is a five-person committee, that three people were selected by the Governor, one by the Assembly, and one by the Senate, and we're hoping to get at least one strong single payer representative on that grouping.
We're going have to see, because again, it could be, we've seen it before. This could be a bluff, where they put together a commission to study something, which means, "Okay, we don't have to deal with it for two or three years."
Lisa Kiefer:"We're still studying it."
Eric Leenson:Because we've got a commission going on it, right?
Lisa Kiefer:Yeah. Well, Eric, if people have questions for you, or do you have a website you would direct them to?
Eric Leenson:Sure. They can go to the Business Alliance for a Healthy California.
Lisa Kiefer:And I have to say it's a good website. That's where I found the link to the documentary, Fix it. I really highly recommend it to anyone, and you can watch it on Vimeo, online and everything, and-
Eric Leenson:And we're sort of in the, in the process of repositioning, because as I say, things are going to change dramatically, once we see who become the new elected officials, particularly on the Governor's side, and the poss... It's going to open up a whole, especially if Gavin Newsom wins election, a whole new set of possibilities to be explored about really trying to do something positive.
Lisa Kiefer:Well, thank you for being on the program.
Eric Leenson:Sure. Thank you.
Lisa Kiefer:You've been listening to Method to the Madness, a biweekly public affairs show on KALX Berkeley, celebrating Bay area innovators. You can find all of our podcasts on iTunes University. We'll be back again in two weeks.
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