Radical Changes in Health Care System Proposed

Charging that California’s “bloated” and “inefficient” health care system wastes $10 billion annually, a coalition of health care advocates called Wednesday for radical reforms that would scrap private health insurance in the state as well as the troubled government Medi-Cal program.

In a report, the San Francisco-based coalition, Health Access, said that replacing these payment systems with a single, publicly financed, government-run payment program would eliminate costly and unnecessary doctor and hospital services, administrative red tape and unneeded drugs.

The proposal by Health Access--which is scheduled to be considered by a legislative committee next week--is one of several suggested reforms that will be taken up by the Legislature this year.

The coalition’s report takes aim at the health care system, which is now “hemorrhaging dollars, consuming bigger and bigger bites of our economy while delivering less and less for a growing number of people,” said Maryann O’Sullivan, executive director of Health Access. “Thousands of Californians get too much medicine, while others get too little. It’s time for serious reform.”

To contrast the huge differences in care, the report compared medical practices in Beverly Hills with those in Watts:

“Per capita, Beverly Hills has 10 times the primary care physicians, 30 times the internists, six times the obstetricians and pediatricians and 15 times the surgical specialists as does Compton, near Watts,” the report said.

In both places, people are endangered, according to the report. In Watts, they receive too little care too late. In Beverly Hills, doctors endanger patients by performing needless, inappropriate and costly operations.

Health Access has proposed that all money now paid as premiums for private health insurance and all tax dollars that fund public health programs in California be collected in a single, publicly financed system. This central government paymaster would collect the public health dollars now distributed through the Medi-Cal and Medicare programs. Employers would contribute to the fund through a 10% payroll tax. Other revenue sources would include higher income taxes, sales taxes and so-called sin taxes on alcohol and cigarettes.

Under the plan, all Californians could choose to receive care from an individual doctor or prepaid health plan. The system would provide reimbursement for comprehensive health care needs, including long-term care, and would eventually cover dental and mental health care.

To contain costs, the state would set a limit on fees paid to doctors and would negotiate budgets for hospitals.

To be implemented, the plan will need state legislation or voter approval of a ballot initiative, O’Sullivan said. She acknowledged that the plan is likely to encounter opposition, chiefly from doctors and hospitals who, O’Sullivan said, could be expected to resist the supervision embodied in the Health Access plan.

There is a growing concern among health care providers, employers and consumers in California and nationally about skyrocketing medical costs and the growing numbers of people--6 million Californians and 37 million nationwide--who lack health insurance.

The Health Access report, which is a compendium of the findings of numerous studies published during the last five years, estimates that more than $10 billion of the state’s $70-billion health care bill is wasted as follows:

* Unnecessary hospital services: $4.83 billion.

* Unnecessary physician services: $2.96 billion.

* Unnecessary prescription drugs: $.32 billion.

* Administrative waste: $2.97 billion to $5.54 billion.