Shifting healthcare system reform into high gear, Gov. Arnold Schwarzenegger unveiled a plan on Jan. 8 aimed at fixing California's uninsured problem and boosting preventive care. The proposal expands the Medi-Cal and Healthy Families programs and requires all Californians to have health insurance through employer and individual mandates.

"It has been years since this type of debate and excitement has been created on the subject of healthcare in California," says Ralph Di Libero, MD, president of the Los Angeles County Medical Association and a Los Angeles orthopedic surgeon. "The governor and the legislators have jump-started the discussion of how to solve the crisis of our 6.5 million uninsured. We should applaud them for embracing a very complex issue that will create a necessary and lively debate for all stakeholders."

Although the California Medical Association applauds the governor's efforts to address healthcare access, association officials are concerned that the governor's proposal is not adequately funded and relies on inappropriate funding sources. The $12 billion proposal would be paid for in part by taxing healthcare providers--collecting 2 percent of physicians' total gross receipts and 4 percent from hospitals.

"A tax on physicians is a tax on those who are sick, because they are users of the health system through their doctor," says Anmol Mahal, MD, CMA president and a Fremont gastroenterologist. "The tax is particularly unfair to primary care physicians because they traditionally have a higher percentage of overhead. It is a bad idea to tax a small segment of society to fund a broad, far-reaching plan to fix California's underfunded health system."

By changing the eligibility requirements of the Medi-Cal and Healthy Families programs, the governor's proposal would offer publicly funded health coverage to all children under 300 percent of the federal poverty level, including undocumented immigrant children who are not currently covered.

In addition, the proposal features emp-loyer and individual mandates. Employers with 10 or more employees would be required to offer insurance to their employees or pay 4 percent of their payroll into a purchasing pool made available to low-income individuals. Individuals would be required to secure health insurance for themselves and their dependents or face enforcement mechanisms through wage withholding and the tax code.

The governor's proposal would also expand the scope of practice of allied medical providers, including nurse practitioners and physician assistants, so they could practice without physician supervision.

This point, in particular, has physicians and CMA officials worried. "Eliminating physician supervision over nonphysician practitioners in retail clinics raises concerns for the safety of patients," Dr. Di Libero says. "Currently, with physician oversight, nurse practitioners and physician assistants are doing good and noble work serving patients. The medical field has long-established processes for ensuring supervision of all medical protocols by highly trained physicians. Interfering with physician oversight is not good for the patient."

Acknowledging that Medi-Cal rates are unsustainably low, the proposal includes a significant reimbursement increase totaling $4 billion. However, reimbursement increases would be tied to physician participation in a new and unspecified pay-for-performance program and adoption of healthcare information technology, such as electronic medical records.

Lobbying Efforts Just Beginning
Organized medicine groups statewide have expressed their intentions to work closely with the Schwarzenegger Administration to ensure that all proposed healthcare reforms protect the patient's ability to see a doctor and the viability of a fragile delivery system.

"In the next few months, there will be a lot of discussion on this topic, and the CMA plans to be center stage trying to do what's right for the profession and attempting to ensure access for our patients," Dr. Mahal says.

In addition to responding to the governor's ideas, organized medicine will address reform proposals from other stakeholders. Senator Pro-Tem Don Perata (D-Oakland) and Assembly Speaker Fabian Nu–ez (D-Los Angeles) both introduced their own plans. The healthcare debate will continue through the current legislative session, which ends in October.
To obtain the CMA's analysis of the governor's healthcare proposal, visit www.calphys.org/html/cc311.asp.

Positive Reform Ideas in The Governor's Plan

-Insurance market reforms would require insurance companies to limit the amount spent on administration and profits to 15 percent of the premiums paid.

-Individuals would receive incentives for making healthy lifestyle choices, such as reducing weight and stopping smoking.

-Individuals would be able to deduct health savings account contributions from their California income taxes.