California Health Reform: The Myths Abide

The (usually more reliable) Riverside Press-Enterprise reported the proceedings of a conference, held over the last two days, which issued a dreary post-mortem on the Schwarzenegger-Nuñez California Health Care Deforminator ABX1-1. ABX1-1 was Governor Schwarzenegger’s and former Assembly Speaker Nuñez’s attempt to ram so-called “universal” health care down our throats via a big tax hike and mandatory private health insurance, plus expansion of government programs.

The article quoted two of the main players in this failed reform, which collapsed last January. Peter Harbage (a consultant who advised Schwarzenegger) and Jim Lott (of the Hospital Association of Southern California) have both debated me on the issues, and it doesn’t look like the discussions did any of us much good.

Mr. Harbage (who has previously confessed that he really supports government-monopoly health care, but doesn’t think it’s do-able now), continues his line that we need more taxes to cover more spending, to cover everyone. It’s a strange argument to make: most reformers, whether advocating more government control or more individual choice, hope that reform will lead to less (wasteful) spending.

Mr. Lott re-iterates his claim that California’s hospitals are teetering on the verge of bankruptcy. He’s quite correct that Medi-Cal (California’s Medicaid program) underpays providers significantly. However, private payers cover the costs more than enough, and California’s hospitals are in better fiscal shape than they were in the 1990s (as explained in p. 16 of my report).

Plus, a new article in JAMA (reported by USA Today) confirms that the legendary legions of uninsured patients crowding emergency rooms are not a critical cost to American hospitals (as discussed in my report and a previous entry).

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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