Editor’s Note: This post continues the conversation in the Health Affairs Blog roundtable on the unsuccessful health reform effort in California. Below, Lucien Wulsin responds to the ideas expressed in the first round of California posts, which appeared last Wednesday and Thursday. You can also read and comment on response posts appearing today from Rick Curtis and Ed Neuschler and Patricia Lynch. Watch for an additional response post from Rick Kronick coming up as well.

In our respective commentaries, we have not yet done adequate justice to the interlinked issues of cost containment, quality improvement and ultimately voter approval of the California reform effort. To finance expanded coverage in California, California policy makers had and will have no choice but to go to the ballot for several reasons: the two-thirds super-majority for new revenues and spending; the state’s pre-existing labyrinth of hurdles, such as Prop 98 that guarantees 40% of all increased General Fund revenues to the state’s under-funded educational systems; and the maze of Howard Jarvis inspired rules on state and local taxes, spending and county mandates. How would we have fared on the ballot?

Most of the state’s regular voters already have some form of health insurance. Some wrongly believe the uninsured are mostly undocumented workers; others mistakenly think the uninsured include many seniors. Few recognize the uninsured are overwhelmingly a population of workers and their family members with citizenship or legal permanent residence status, and fewer still think the issue of six and a half million uninsured impacts their daily lives, except when a hospital emergency room or trauma center closes in their neighborhood. Most are satisfied with their own doctor and plan. They do want better options and choices, and as Marge Ginsburg has pointed out, they are willing to make trade-offs as long as they get to make the trade-off decisions.

So what was in the bill for them? The state’s policy makers learned from the defeat of President Clinton’s health reform proposal and left many issues well enough alone. This was not a “big government” proposal. No one who was insured would have had to change their doctor or change their plan. Those with individual coverage who were locked into a plan due to a pre-existing condition would have the right and opportunity to change their plan and coverage. Those who wished to upgrade their coverage could do so in steps. Issuance and renewals of coverage were guaranteed, and job lock would have disappeared. Affordability issues were resolved for many, and those with hardships exempted from the mandate. The proposed financing package did not increase the tax burdens on individuals with health insurance.

The skeletons left largely undisturbed in the closet were the overall growth in health spending; the increases in co-pays, deductibles and co-premiums; growing gaps in covered services; increasing numbers of providers who refuse to accept even private insurance; difficulties securing an appointment and navigating the health care non-system; challenges in comprehending medical bills when hospital charges bear no relationship to fiscal reality and rigidity; and unresponsiveness of providers and plans to patient and subscriber complaints. These are issues that business, labor and insured voters really care about.

The bill made a good start on some urgently needed health reforms with its provisions on electronic medical records and e-prescribing; transparency of provider price and quality information; pay for performance; limits on health plans’ non-benefit spending; and its focus on prevention, primary care, wellness and better treatment of diabetes and other chronic conditions. But it had no blockbuster provisions (though maybe there are none) to control rising health costs, whether through concepts like global budgeting for hospitals or a statewide pharmacy benefit manager for prescription drugs.

Rick Kronick points out that the goal of the cost containment aspects of health reform must be to bend the health cost growth curve to a rate closer to the increases in worker wages and overall GDP. Peter Lee suggests that the right framing for this issue is value purchasing, which increases quality and enhances system efficiency in producing better health outcomes for the dollars devoted to coverage.

In California, we have been past pioneers in managed care, selective contracting and managed competition, each of which succeeded here for a time. We need to now make a sustained public and private commitment to health IT, transparent and reliable data, pay for performance with strong outcome incentives, better management of patients’ costly chronic diseases, tested clinical efficacy and other promising systemic approaches.

There are two possible avenues to health reform in our state: The first is stakeholders and policy makers achieving policy consensus, and the second is a strong push from a well-versed electorate. We will have to pursue both. Big spending opponents can make approval difficult on the ballot, but in past ballot fights California voters overrode well-funded opposition. Strengthening the reform provisions that aim to slow the rise in health costs could bring stronger support into play from insuring employers, insured voters and labor. In the past year, we were fortunate and unique in having excellent leadership from the Governor, Assembly Speaker and Senate President, but to a surprising degree reformers failed to coalesce, and that is another story.

In California and nationally, we must achieve coverage for all combined with greater system efficiency and improved patient and population outcomes. These reforms do appeal to different constituencies, and there is a high potential for conflicts that will need to be reconciled. While California efforts to-date have concentrated on coverage expansion, financing and insurance reforms, with good progress achieved, the need now is to better incorporate “value purchasing”. This means more attention to the legitimate and very fixable health system issues bedeviling those with and those paying for coverage.

Good health policy can make good politics.

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