Thursday, February 3rd, 2005


  • State of the Union; Medicaid Cuts Coming
  • New Study on Universal Health Care; Bill to Be Reintroduced Feb 23rd
  • Update on King/Drew in Los Angeles


In his State of the Union speech on Wednesday, February 2nd, President George W. Bush focused on his plans for Social Security and national security issues, and largely avoided talking about health care issues. His one paragraph on health issues was a list of the Administration’s previous proposals:

“To make our economy stronger and more productive, we must make health care more affordable and give families greater access to good coverage and more control over their health decisions. I ask Congress to move forward on a comprehensive health care agenda, with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical error and needless costs, association health plans for small businesses and their employees, expanded health savings accounts, and medical liability reform that will reduce health care costs and make sure patients have the doctors and care they need.”

Consumer groups have raised concerns about many of these proposals, including tax credits, health savings accounts, and association health plans, both about their effectiveness in expanding coverage, and their impact on the health care system on which we all rely. For reports and fact sheets that outline these concerns, go to the Families USA website at

President Bush did not mention Medicaid, or the rampant speculation that he will be seeking significant cuts and changes in the Medicaid program. He is scheduled to release his federal budget on Monday, February 7th. An analysis will be forthcoming on his proposed changes. California advocates are asking Governor Arnold Schwarzenegger to take a public stance against such Medicaid cuts and caps, given that California would be especially disadvantaged by such proposals.


Health care advocates made headlines last week with findings of a new report confirm that California can create a fiscally sound state insurance plan that covers every Californian with a solid, comprehensive health plan, reduces costs and controls health cost inflation.

Senator Sheila Kuehl (D-Los Angeles) has pledged to reintroduce the “California Health Insurance Reliability Act” (formerly SB921) in this new legislative session. The bill, which does not have a bill number yet, is co-authored by both chairs of the legislative Health Committees, Senator Deborah Ortiz (D-Sacramento) and Assemblywoman Wilma Chan (D-Oakland), and also has the support of Speaker Fabian Nunez (D-Los Angeles) and Senate President Don Perata (D-Oakland). The campaign on behalf of this bill will begin with a press conference and lobby day on Wednesday, Feb. 23rd in Sacramento. More information will follow.

Conducted by The Lewin Group, an independent firm with 18 years of experience in healthcare cost analysis, the report finds that a universal program will reduce total health spending in California by $8 billion in the first year, alone. The full report, released by Health Care for All California, is available at

The Lewin report shows that all California residents can have affordable health insurance; and that, on average, individuals, families, businesses and the state of California, all of whom are now burdened with rising insurance costs, will save money. Some highlights include:

SAVINGS OVERALL: The Lewin report model would achieve universal coverage while actually reducing total health spending for California by about $8 billion in the first year alone. Savings would be realized in two ways: 1. The Act would replace the current system of multiple public and private insurers with a single, reliable insurance plan. This saves about $20 billion in administrative costs. 2. California would buy prescription drugs and durable medical equipment (e.g., wheelchairs) in bulk and save about $5.2 billion.

SAVINGS FOR STATE AND LOCAL GOVERNMENTS: In addition, state and local governments would save about $900 million, in the first year, in spending for health benefits provided to state and local government workers and retirees. Aggregate savings to state and local governments from 2006 to 2015 would be about $43.8 billion.

SAVINGS FOR BUSINESSES: Employers who currently offer health benefits would realize average savings of 16% compared to the current system.

SAVINGS FOR FAMILIES: Average family spending for health care is estimated to decline to about $2,448 per family under the Act in 2006, which is an average savings of about $340 per family. Families with under $150,000 in annual income would, on average, see savings ranging between $600 and $3,000 per family under the program in 2006.

COST CONTROLS: By 2015, health spending in California under the Act would be about $68.9 billion less than currently projected. Total savings over the 2006 through 2015 period would be $343.6 billion. Savings to state and local governments over this ten-year period would be about $43.8 billion.


In Los Angeles, a series of crises plaguing Martin Luther King/Drew Medical Center has garnered front-page headlines. Most recently, national organizations have threatened the closure of King/Drew, which would imperil access to health care for the largely low-income African American and Latino population served by the Los Angeles County-owned hospital in Willowbrook, south of Watts. By these news accounts, the hospital has been in a downward spiral due to poor management, neglect, and lack of responsible leadership by the L.A. County Board of Supervisors; as well as the deterioration of the public health care system in CA at large.

As part of a multi-year plan to drastically reduce public health services throughout Los Angeles County, the Board of Supervisors and their Department of Health Services staff took significant steps to reduce the size and scope of services at the hospital, including a decision last November to close King/Drew’s trauma center, over opposition of community groups concerned about patient’s access to care in the area. The Board has retained Navigant Consulting per a $13.2 million contract to conduct a comprehensive assessment of King/Drew, implement recommendations to improve the hospital, and run its day-to-day operations.

Unfortunately, the Board’s interest in King/Drew has come only after intervention by other agencies to address problems at the hospital. The federal CMS (Centers for Medicare & Medicaid Services) recently announced that they may pull the roughly $200 million in federal funding they provide to King/Drew annually to reimburse costs for treating indigent patients. Despite this potential loss of half the hospital’s budget, the County is poised to appeal and feels confident that they can reverse CMS’s position, after an new inspection in the next few weeks. JCAHO (the Joint Commission on Accreditation of Healthcare Organizations) announced Feb 1 that it has revoked its seal of approval from King/Drew. Again, the County will work toward a reversal of this decision by making the necessary improvements to regain JCAHO accreditation.

In a coordinated effort to stave off any further action by the County to jeopardize King/Drew’s viability, a group of health advocacy, community-based and labor organizations have allied to “honor the tradition and shape the future” of King/Drew by promoting a responsible vision for the hospital. They advocate that King/Drew should be restored to an academic medical center with a full range of services such as preventive and primary care, outpatient and inpatient services, and comprehensive specialty services. In addition, King/Drew should continue to play a vital role in the training and placement of physicians who provide care with excellence and compassion for the underserved. Most importantly, the nature and quality of all King/Drew services must be designed to meet the on-going needs of South Los Angeles’ culturally and medically diverse communities. For more information on their efforts, please contact Jollene Levid of the Committee for Interns & Residents at 310-632-0111 or Saira Soto of SEIU Local 660 at 213-368-8623.

Health Access California promotes quality, affordable health care for all Californians.
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