Capitol Alert

Could San Francisco’s universal health care model work for all of California?

Alice Chen sees a steady stream of patients here, at Zuckerberg San Francisco General Hospital and Trauma Center – a massive medical campus that serves as the backbone of the health care delivery system for the city’s undocumented population and its poorest residents.

Through focusing on regular checkups and preventative care, Chen says overall health care costs have ticked down over the past decade, due in large part to the system’s ability to divert patients away from costly emergency room visits and catch health complications before they escalate to severe illness and disease.

That concept is fundamental to Healthy San Francisco, the city’s universal health care program adopted a decade ago that covers everyone regardless of immigration status or ability to pay.

“It has been transformational in San Francisco,” said Chen, a primary care doctor and chief medical officer for the San Francisco Health Network. “It was really a reimagining of our delivery system that left out uninsured people just hoping that nothing goes wrong.”

The program, signed into law by Lt. Gov. Gavin Newsom when he was mayor of San Francisco, is expected to serve as a foundation of Newsom’s political platform in the 2018 governor’s race to succeed Gov. Jerry Brown. Turmoil in Washington over House Republicans’ proposal to repeal and replace Obamacare has fueled Newsom’s resolve to adopt universal health care despite several past failed statewide efforts.

“Healthy San Francisco was a big idea. It was audacious,” Newsom said in an interview. “At the time no one thought it could work – even I wasn’t convinced.”

Newsom said the election of President Donald Trump, followed by a Republican proposal to replace the Affordable Care Act estimated to leave 14 million Americans uninsured by next year, has created a mandate for California lawmakers to undertake health care efforts to stem potential losses in coverage.

In California, state Insurance Commissioner Dave Jones estimates that 1.2 million people who receive subsidies through Covered California would lose their insurance, and 3.7 million low-income people on Medi-Cal would also risk losing coverage.

Newsom said he has long envisioned a universal health care model for California that includes a single-payer system. He strongly supports the Affordable Care Act but says he recognizes deep flaws that led to rising premiums, escalating delivery costs and millions of remaining uninsured – particularly undocumented immigrants.

“This is not just something I’ve been talking about for 15 years. This is something we achieved that has remained a demonstrable model for quality, affordable health care years since I’ve been mayor,” Newsom said. “It’s a point of passion for me; it’s a point of pride for me during my time as mayor; and it’s a point of principal. We’re in a very challenging spot with this pseudo repeal and replacement of Obamacare.

“Health care, for me, is the issue of our time,” he said.

The law known as Healthy San Francisco, created in 2007, has not only endured but has been strengthened under Obamacare. It covers undocumented San Francisco residents and poor people who don’t qualify for Medi-Cal, the state’s low-income health care program. It also provides financial assistance for those who qualify for subsidies through Covered California but still can’t afford to purchase health insurance on their own.

“Part of what we got people to understand, through Healthy San Francisco, is if we don’t cover undocumented people and others regardless of their income, we collectively are going to shoulder the expense of these exorbitant health care costs,” said Mitch Katz, who now heads one of the nation’s largest county health agency in Los Angeles but in 2006 was advising Newsom on how to create a universal health care system.

“We said, ‘Shouldn’t we provide care in a sensible way that gets them into primary care, rather than the emergency room and waiting for them to develop advanced diseases?’ These are the most expensive ways to care for people.”

Though it is not health insurance and can’t be used outside San Francisco, the program finances health care for residents within the city’s borders through a combination of health department funding, fees paid by employers and sliding-scale payments from patients. It was initially built with substantial San Francisco general fund money and federal financing.

It centers on the importance of primary care and routine checkups to help control costs; mandates that employers contribute to their employees’ health care allows them to pay into a city-run option; and adopted a provision even before Obamacare that people with pre-existing conditions can’t be denied health care. Patients can use their coverage at the city’s network of primary care clinics as well as at public and private hospitals.

Across California, 47 of the state’s 58 counties provide some health care benefits for undocumented people, but Healthy San Francisco is the most pioneering because it also included an employer mandate and covered not only poor people but also those who simply couldn’t afford insurance.

“It is one of if not the most robust safety net programs in the country,” said Anthony Wright, executive director of Health Access California, an advocacy nonprofit.

The things that make San Francisco unique also helped Newsom and members of the city’s Board of Supervisors advance their cause. The network of 14 community-based clinics, from the Tenderloin District in the heart of the city and from Hunter’s Point to the Sunset, provided critical infrastructure for the program.

And the city’s famously fierce liberal spirit, boosted by a politically progressive majority at the highest ranks of city government, allowed people like Newsom and other early architects of the program to take a political risk.

They had to contend with the city’s powerful business industry – restaurants, in particular.

Former San Francisco Supervisor Tom Ammiano helped lead the charge to require employers to contribute. He said he felt emboldened after seeing early political support in San Francisco following a 2004 statewide referendum asking California voters if employers should be required to provide health care coverage for their employees.

Proposition 72, backed by health care advocates and powerful labor unions at the time, had just been defeated at the ballot box. Statewide, it went down with 50.8 percent of California votes opposed.

But San Francisco voters overwhelmingly backed the idea. There, it got 70 percent of the vote.

“It was still a bruising battle, but that showed us that the public wanted this,” said Ammiano, who went on to serve six years in the state Assembly. “I always had in mind adopting some kind of model for universal care that covered undocumented people. I knew from my experience as a teacher that we had a very high immigrant population who contributed to the economic vitality of the city.

“And I saw with the AIDS crisis what happens to people,” said Ammiano, who lost his longtime partner to the disease. “It was very personal for me.”

The Health Care Security Ordinance, passed by the board then later signed by Newsom, withstood prolonged criticism from the city’s business community and the Chamber of Commerce, as well as a high-profile lawsuit brought by the Golden Gate Restaurant Association, a powerful voice for the city’s restaurant industry.

“The restaurant industry was nasty,” Ammiano said. “But we beat them every time in court.”

Today the program serves 14,000 San Francisco residents, down from the peak of 60,000 before the Affordable Care Act went into effect in 2014. It has remained a critical program, however, for those who still lack health care access under federal law. Most of those are undocumented people, program officials said.

Doctors are increasingly seeing undocumented people skip appointments out of fear of deportation, Chen said.

“If you’d asked me six months ago, I would have said we wouldn’t need this anymore because of California’s successful implementation of the Affordable Care Act and because the Legislature wanted to include all undocumented people,” she said. “But now it’s going to be critical to continuing to serve that population, and as a safety net given the tumult and uncertainty at the federal level.

“We have the structure – though not necessarily the funding – in place to expand Healthy San Francisco again if we needed to,” Chen said.

Katz, director of Los Angeles County’s Department of Health Services who has adopted a similar universal care program there called My Health LA, said he is working with Newsom to come up with a statewide proposal that both preserves health care access and expands it in the future. He’s also working with former San Francisco health director Tangerine Brigham and members of the Los Angeles County Board of Supervisors who are proponents of single-payer health care.

“I have been charged with putting together an outline for what a California universal health care plan could look like that includes the values of inclusiveness, providing high-quality care while lowering costs to the system yet remaining affordable,” Katz said. “If we can figure out something that can work in Los Angeles, which has a third of California’s population, there is consensus that we could get it done statewide.”

Learning from experience both in Los Angeles and San Francisco, Katz said any statewide model will require broad and robust political support in the Legislature, as well as from dueling interest groups.

“When we started Healthy San Francisco, we said, ‘Of course the county is going to be the primary financier, but the cost is too great for the county to do it by itself.’ Going forward, it’s that same lesson for California,” Katz said. “We have to get employers, we have to get hospitals and pharmaceutical companies, we have to get counties … only then are we going to be able to solve this problem.”

Angela Hart: 916-326-5528, @ahartreports

California efforts to expand health care

1992: Proposition 166 fails, with 69.2 percent of California voters opposed. It would have created an employer mandate to provide employees health insurance, and required employees to participate unless they had some other form of health insurance.

1994: Proposition 186 fails, with 73.4 percent opposed. It would have created a single-payer health care system with state government administering coverage and replacing most private health insurance programs.

2004: Proposition 72, a statewide referendum asking California voters if employers should be required to provide health care coverage for their employees, fails with 50.8 percent of voters opposed.

2005: Senate Bill 840, by state Sen. Sheila Kuehl, would have created a single-payer health care system for California. It passed the Legislature in 2006 but was vetoed by Gov. Arnold Schwarzenegger.

2007: Schwarzenegger designates 2007 as “year of health reform,” but a proposal requiring everyone to have health insurance stalls in committee.

2010-14: Legislature and Gov. Jerry Brown pass slew of state bills implementing the Affordable Care Act. The state expanded Medi-Cal for low-income residents and created Covered California, the health insurance exchange.

2015: Sen. Ricardo Lara’s Senate Bill 75, signed by Brown, expanded Medi-Cal to cover undocumented people under age 19.

2017: Lara withdrew a request to the federal government for permission to allow undocumented adults to obtain health insurance through Covered California. Lara said he didn’t “trust the Trump administration to do what’s best for California and to implement the waiver in a way that protects people’s privacy and health.”

2017: Lara and Atkins, D-San Diego, propose skeleton “health-care-for-all” bill, Senate Bill 562, to adopt single-payer, universal health care in California.

2017: Lt. Gov. Gavin Newsom, a candidate for governor, plans to propose a statewide single-payer, universal health care system as House Republicans advance Obamacare repeal.

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