Todd Davies, Response to Stanford Daily Editorial Opposing Proposition 186,
October 1994 (unpublished)

The Daily's editorial opposing Proposition 186, the single-payer health
care initiative, is misinformed and ill-considered, and parrots
uncritically almost every major piece of insurance industry propaganda on
this issue. Let's consider the Daily's major points :

1. "It's too much money to hand over to the state"

The Daily gives education and welfare as examples of the failure of our
state government, but this is a mindless argument. First of all, K through
12 education is administered locally, not at the state level. It is true
that California has slipped badly in this area since the late Seventies,
but that is really the result of Proposition 13 in 1978 and the massive
shift in spending from education to prisons, not of inefficiency in
Sacramento. In higher education, which is done at the state level,
California's system is still among the best in the country, despite
inadequate funding. Welfare remains impoverished and unattended to because
the politicians in Washington and Sacramento, who in our system must worry
primarily about how they will raise enough money to get re-elected, have no
stake in welfare. Poor people vote in low numbers, and legislators do not
require welfare to give their own lives a kick start; therefore, we do not
have a welfare system that works for those who need it.  But under Prop.
186, all of the politicians in Sacramento would have a personal interest in
seeing to it that the single-payer system meets our needs, because it
will affect every voter and the politicians will all be covered by it too!

It is a massive misconception, fed on by the insurance industry during this
campaign, that governments are always less efficient than private
enterprise. The part of our health care system that would be turned over to
the state under Prop. 186, namely the bill paying, is a task to which
governments have been proven, in other countries and even in our own, to be
very well suited. In the U.S., we spend a greater percentage of our G.D.P.
on health care than any other country, and yet we are not
better off as a result. California spends even more than
the U.S. average. Interestingly, the state with the
lowest relative health care expenditures is Hawaii, which is also the only
state with a legal mandate requiring health insurance for all employees.

Most people are surprised to learn that Medicare uses only 2% of each
health care dollar for administration, while the insurance companies
average 27%! Why are private insurers so inefficient? Because they add
costs, mostly from lack of consolidation, that a single-payer system won't
have, like fancy buildings, lots of executives, and the necessities of
marketing. The CEO of Traveler's Insurance, Sanford Weill, had a salary of
$53 million last year! And there are 50,000 people in California whose job
is to sell health insurance.  Under Prop. 186, we won't need anyone for
that job - a savings of a few billion dollars right there. (Incidentally,
Prop. 186 provides for people who lose their jobs due to its passing, by
budgeting $1 billion a year for three years to retrain them and help them
move elsewhere in the workforce.)  Overall, the evidence is very good that
we can save at least $10 billion in administrative overhead under a
single-payer system. That money can be used to provide benefits that we and
others are not now receiving. Five million people in this state have no
health insurance at all, and many others, including all those who are
limited to Stanford's student health plan, are under-insured and are
effectively not covered for catastrophic illness. New jobs will be created
to provide the care that is not being given now, matching and probably
exceeding (certainly in usefulness) the jobs that are lost in the insurance

Prop. 186 is not socialized medicine. If it were, I would oppose it.
Private capital will continue to fund the construction of hospitals, and
doctors and HMOs will continue to own and operate their businesses on a
fee-for-service basis.  Most people in California still believe in
public education, which is socialism, and yet the single-payer initiative, which is
more analogous to the voucher system that conservatives favor for the
schools, is frequently denounced as a crazy left-wing idea. It is all a
matter of what we are used to, of course, but when we consider that the
United States is now the only industrialized nation that does not
guarantee health insurance to its citizens, it seems all the more odd that
so many people seem to feel that California children have a right to
education, but not to health care. Which right seems more basic?

2. "It gives too much power to the health commissioner"

The Daily mirrors an insurance company scare tactic when it states that the
health commissioner (elected every four years under Prop. 186) "would wield
a frightening degree of power over the state health system, relatively free
from the checks and balances that constrain other government officials."
The truth is that the State Health Commissioner would be far more
accountable to the voters than almost any other state official, and
certainly more accountable to consumers than the bureaucrat of an insurance
company would want to be to anyone who has become a drain on profits.
Consumers Union, publishers of Consumer Reports, has strongly endorsed
the initiative after a very careful and skeptical review of provisions such
as this, and it notes that, in addition to facing the electorate every four
years, the commissioner is accountable through a statewide consumers
advisory board "made up of volunteers paying a nominal membership fee,"
through annual public hearings "to hear testimony on the allocation of
resources and responsiveness of health facilities and clinics," and through
"judicial review available for anyone aggrieved by a decision under the
Act," anti-discrimination regulations, and the Regional Administrators and
Regional Consumer Advocates provided for in the initiative.

People often think, "Well, if I have a bad experience with my insurance
company, I can always switch to another one" -- the supposed
self-correction mechanism of the market. But the problem is that you only
discover how unreasonable your insurance company can be once you've gotten
sick, and if it is serious, you may be locked into that company or into
your job because no other company will take you without excluding from care
this "preexisting condition." You could complain that your company switch
insurers, but it is more likely to care about keeping costs down than
finding an insurer who is responsive to employees when they get sick. When
the Daily and others say that the prospect of an elected official and his
deputies deciding eligibility issues is "frightening," we should ask,
compared to what alternative? An unelected, corporate bureaucrat motivated
primarily by the bottom line? A single, elected health commissioner
provides a point of accountability that many people find more attractive
than an elected commission, the only realistic alternative. But it would be
open to the state legislature to amend the act if at any point it looks
like a group of elected officials would be preferable to a single one. Fear
about the power of the health commissioner is not a good reason to vote
against 186.

3. "It gives too much power to the electorate"

The Daily worries "that the nature and extent of health care coverage would
be subject to the whims of the electorate," and that "candidates [for the
health commissioner] could offer to lower taxes by rationing services or
stripping down the benefits package to the bare legal minimum." I've
already mentioned many of the problems with this argument, but add to these
the fact that we now have truly oppressive levels of rationing going on
in the micromanagement of care by insurance companies.  Many people who
have never required a serious medical procedure assume that if your doctor
decides you need an operation, then the insurance company will pay for it.
They promised to in the policy, didn't they? Well, the insurance companies
see it differently, and cases where the procedure is approved without delay
and the surgeon's full fee is paid are really the exception these days,
rather than the rule. A single-payer system is much more likely to meet our
needs because of its built-in accountability mechanisms (including the fact
that the officials themselves cannot opt out of it).

Of course, there will be limits to what we as a society are willing to pay
for, but isn't it better for these decisions to be made by voters,
legislators and accountable elected officials?  Insurance companies learned
a long time ago that the best way for them to maximize profits is to
collect money from healthy people and deny coverage to the sick. To allow
this regime to continue is wrong! But the best test of whether we would be
happier under Prop. 186 is to compare the rates of satisfaction with, for
instance, the Canadian system (which is similar to 186), to the
satisfaction with our present system. The answer is clear: Canadians
express a higher degree of satisfaction with their health care system than
any other industrialized country, and Americans express the lowest.
Opponents of 186 like to cite the (rare) examples of Canadians who
seek care in the U.S. that they must wait for longer in Canada. Yes, it is
true that there will be a more global setting of priorities, but for those
who demand more than society is willing to provide, extra levels of care
will be available for a price, in the form of private payments and
supplemental private insurance, neither of which is forbidden in the
initiative.  This is as it should be. No society can guarantee everything
to everyone, and people should not be preventing from spending their own
money on their health, as long as they have met their tax obligations.

4. "It doesn't provide enough coverage"

The Daily cites "glaring holes in the proposed coverage plan" such as "room
and board costs for nursing home patients" and health care for California
students attending schools out-of-state, both of which are excluded. In
this case, the cited examples turn out to be about the only exclusions that
are controversial, and both are quite defensible. Not covering room and
board for long-term care saves a great deal of money and
is based on the sound principle that the plan should not pay for costs that
a person would incur as part of living even if they were not sick. Students
who leave the state for more than 90 days would be in no worse shape than
Stanford students (including most who purchase the student health plan) who
are not covered under their parents' or another policy - they would simply
have to purchase insurance as residents of another state. If Prop. 186
passes here, it is likely that other states will pass similar plans once it
is shown to work well in California, and presumably students would then be
covered in those states. In any case, this is something that could easily
be amended if there is a strong sentiment for it, and probably at low cost
since college students do not as a group generate huge medical bills. It
is certainly no reason to vote against the initiative.

5. "It will have a `dire impact' and is `poorly drafted'"

These are completely unevidenced claims in the editorial, and neither one
holds water.

6. "It's too complicated for a public vote"

This was the main argument against 186 raised by the Mercury-News, and it
would be worth considering as a reason to vote no, except that the history
of legislative efforts to reform health care, right up to this past summer,
indicates that (a) serious reform is unlikely (several promising efforts
going back to the Truman administration have all fizzled), and (b) any bill
that does pass is virtually certain to be written to serve the insurance
industry ahead of consumers. The reason is that American politics is
controlled by monied lobbyists, and the insurance industry as such is
peerless. This is why single-payer plans were never even considered by the
Clintons as serious candidates to propose to the congress. If Bill Clinton
had posed a serious threat to the existence of the health insurance
industry in this country, it is no exaggeration to say that he may well
have paid with his life. These people mean business (pun intended)! The
insurance companies are spending $1 million a week in ads to try to dupe
Californians into voting against our own best interest, because they know
that the stakes include the rest of the country as well, and they are
spending our premiums to put this tripe on the air. Take them out of the
health business. Vote Yes on 186.