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San Francisco has its own 'public option'
Its city-run universal healthcare effort enrolls more than 46,000 adults and
has received high marks in recent independent studies.
By Maria L. La Ganga
October 4, 2009, Los Angeles Times
Reporting from San Francisco
Over the last two years, three-quarters of San Francisco's uninsured adults
have enrolled in a public program that guarantees access to medical services, an
effort that is being touted as a national model during the rancorous debate over
healthcare reform.
More than 46,000 adults have enrolled in Healthy San
Francisco since it was launched; this first-in-the- nation, city-run universal
healthcare effort has received high marks in recent independent
studies.
The program is funded in part by an employer mandate, a
controversial component of the plans under discussion in Washington. One
analysis has concluded that this mandate on employers with 20 or more workers
has not driven businesses away. Patient satisfaction is high, according to
another recent survey.
But although many laud the program, which Mayor
Gavin Newsom described as "a public option . . . a strategy to provide
healthcare regardless of your ability to pay, regardless of your preexisting
condition."
But even some supportive critics, including Dr. Mark Smith,
president of the California HealthCare Foundation and an advisor to the San
Francisco effort, warn against "making more of it than what it is."
"It
is a stretch to suggest that this is a model for a full-fledged insurance plan
acceptable to broad sections of the population that competes head-to-head with
private insurance companies," Smith said.
Healthy San Francisco is not
insurance, is not portable and is worthless outside of the 49 square miles that
constitute the self-proclaimed "city that knows how."
But here's what it
does do: Any uninsured adult who lives in San Francisco and earns up to 500% of
the federal poverty level annually is eligible. That's $54,150 for individuals
and $110,250 for a family of four. (Children are covered under a separate
city-run program.)
Patients must pay a quarterly participation fee based
on their annual income, along with certain co-payments for services. But care is
free for those earning 100% of the federal poverty level or below -- about 70%
of all participants.
Patients must pick a medical home out of a network
of more than 30 public and private clinics, physician groups and hospitals
within the city limits. The idea is that patients get consistent care and the
system avoids duplicating services. Although about half of the network is
government-run, Kaiser Permanente just joined and plans to accept up to 3,000
patients.
Patients receive preventive services, such as mammograms and
colonoscopies, care when they are sick or injured and ongoing treatment for
chronic conditions. Prescriptions are covered. So are hospital stays, which cost
participants no more than $200 per day at San Francisco General Hospital.
But if you have a heart attack in Phoenix or go to a provider outside of
the limited network, you're on your own. In addition, dental and vision care are
not covered. As the Healthy San Francisco handbook warns those who have health
insurance, "Do not drop it. Insurance is always the better choice."
But
the program is a lifeline for people like Cayetano Castaneda, 53, who washes
dishes at a restaurant in Union Square. Castaneda cannot afford the insurance
his employer offers and still pay his rent.
Before enrolling in Healthy
San Francisco, he stayed away from doctors' offices, even though he has high
cholesterol and suffered from headaches and fevers.
"I was afraid I would
not be able to pay the high bills in the hospital," he said. "I never got care.
I waited and waited."
Today, he pays $60 every quarter to participate in
the program. The Castro-Mission Health Center is his medical home. One recent
Wednesday, he waited in its busy lobby for blood test results that would tell
him if new medication had lowered his cholesterol.
Castaneda's case
underscores many of Healthy San Francisco's strengths -- but also what critics
point to as a key weakness.
Even before the program began in 2007,
Castaneda could have gone to the same clinic, operated by the city's Department
of Public Health, and paid for care on a sliding scale.
Some argue that
the program is simply a repackaging of the city's existing clinic network, and
they wonder why business owners are on the hook for healthcare costs to support
it when they were not before.
Since 2008, private employers here with 20
or more on the payroll have been required to spend a minimum amount on
healthcare coverage for their workers. They can fulfill that obligation by
offering insurance, selecting Healthy San Francisco or paying into a medical
reimbursement or health savings account.
Businesses with 20 to 99 workers
must pay $1.23 per hour per employee for coverage; those with 100 or more must
pay $1.85 per hour. Healthy San Francisco costs about $125 million annually, of
which about $14 million comes from employers.
"Healthy San Francisco is a
really good idea and a good program, a reorganization of the public clinic
system giving each resident a medical home," said Kevin Westlye, executive
director of the Golden Gate Restaurant Assn. But "we vehemently disagree" with
the employer mandate, he said.
Dr. Mitchell Katz, director of the city's
public health department, is sympathetic, acknowledging that the employer
mandate is seen by many as a third assault on business in recent years. The city
has also raised the minimum wage and required employers to cover a certain
number of paid sick days.
But "anyone who says it's just a beefed-up
[clinic] system, either they're not being honest, or they don't know" Healthy
San Francisco, Katz said.
"You can join Kaiser," he said. "You can see a
private doctor through the Chinese Community Healthcare Assn. . . . People today
are getting their surgeries done at private hospitals."
And a study by
the UC Berkeley Institute for Research on Labor and Employment, released in
August, concluded that "the substantial job losses that some worried would be
generated by the employer requirement have not materialized."
The study
looked in particular at eating and drinking establishments in San Francisco, San
Mateo and Alameda counties between December 2007 and December 2008, the most
recent data available that overlapped with the Healthy San Francisco
program.
It found that food service employment in San Francisco rose
0.2%, but dropped by 0.1% in the two counties without an employer healthcare
mandate. In the six years before the mandate, restaurant job growth in the three
counties was similar.
Ken Jacobs, chairman of the Berkeley institute,
sees that as a major lesson from the San Francisco model, which actually charges
employers more than any plan floated nationally and yet has not cost the region
jobs.
The city's plan is government-run and subsidized -- a so-called
public option -- and has not caused workers or employers to bail out of private
insurance, another lesson for the national debate.
The restaurant
association and the San Francisco Chamber of Commerce dismiss Berkeley's
numbers.
Jim Lazarus, the chamber's senior vice president, called the
report "a bogus, biased document that tries to compare San Francisco's
historically better unemployment rate to surrounding counties'."
When the
city passed the employer mandate, Jennifer Piallat, owner of Zazie Restaurant,
said she couldn't raise her prices to cover the cost. She'd already done it
twice -- once to absorb increased gas prices passed on by her suppliers and once
to adjust for the minimum wage.
Instead, she put a $1-per-person
surcharge on the menu, which allows her to offer health insurance through Kaiser
Permanente, dental coverage and a 401(k).
"I'm not saying that Healthy
San Francisco is a great plan," Piallat said. "I just feel that it gave me the
ability to charge this surcharge to give my employees benefits. . . . If I had
done it alone, it probably would have hurt us."
Though her customers have
largely taken it in stride, one woman demanded an audience so she could say how
"truly offended" she was "that I have to pay a dollar to subsidize your
employees' healthcare," Piallat recounted recently.
Piallat's response?
"While we're being honest, I'm offended that you're wearing a 4-carat diamond
and complaining about a dollar."
maria.laganga@latimes.com
Copyright © 2009, The Los Angeles Times