“Our members are frustrated and some are outright angry about double-digit health-insurance-premium increases annually. The costs are a challenge to their operating budgets, a challenge to their employee coverage, and a challenge to their competitiveness. Firms are dropping family coverage and just covering their employees. There are not good choices. They know having health care benefits is important to retaining high quality employees, but at some point you reach a tipping point,” Toebben stresses.

In looking for possible solutions, Toebben said the L.A. chamber believes that three things need to happen: 1) everyone has to have coverage; 2) we need to focus on prevention and wellness; and 3) health care has to become more affordable. Containing costs is not enough. We need to find ways to take excessive costs out of the system.

“Past reform proposals have largely said to employers, ‘It’s your job to fix it this problem and pay for it.’ The governor’s plan feels more like a partnership than a mandate. He is sincerely reaching out. While there are concerns about the unknown, the current plan is a good starting point for discussion to get the ball rolling,” Toebben indicates.

WHINE OR WIN?

“We believe you must listen and learn before you lead,” says Carl Guardino, president and CEO of Silicon Valley Leadership Group, a 215-member employer group in Silicon Valley that represents a quarter of a million local jobs, in addition to millions worldwide.

Founded in 1978 by David Packard of Hewlett Packard Co., The Leadership Group member companies contribute more than $1 trillion to the global economy, which equals the GDP of Italy -- or half of all U.S. annual health care spending.

In the past 18 months, health care has emerged as an area of concern to its members, and Leadership Group now has a health-care reform committee that has identified 10 core elements any reform plan must address. The principles emerged from a staff analysis of the policies, politics and proposals on health care reform. What surprised the group was finding more areas of common ground than disagreement.

The Leadership Group has four priorities now: wellness, shared responsibility, the “hidden tax” and kids. “We want to emphasize wellness everywhere we can; it is our best investment. We also believe in shared responsibility: if everyone benefits, then everyone must contribute. We must also find ways to reduce the $1,186 hidden tax for families that we all pay now. And, we must cover all our children. Not only is it morally the right thing to do, it will also protect all our families,” Guardino stresses.

Moving from principles to policy is not without its bumps and bruises. Health care reform is littered with broken bills and heavy-handed partisanship. Only two major structural reform efforts -- Medicaid and Medicare in the mid-60s -- have passed nationally since health care reform first reared its head in 1929, when the Committee on the Cost of Medical Care was appointed. That committee’s 1932 report landed with a thud. What’s more, reform failure is truly bi-partisan. It failed under President Nixon and it failed under President Clinton, and appears to be going nowhere fast with President Bush.

That puts the action at the state level. Several Eastern states have taken the early lead -- Vermont, Maine and Massachusetts. Oregon is working on some comprehensive changes. The governors in every state would love to get their hands on practically anything that might work.

ADD CALIFORNIA

Now California comes along. And it’s doing something very different. Most importantly, perhaps, is that it is not starting by diving into legislation.

In fact, the tone in California in 2007 is one of guarded optimism. “We have a governor and a legislature yearning to find common ground,” Guardino says. “We now have a track record of finding some bi-partisan successes. We won last year with our global warming initiative. We came together on the minimum wage. I think the governor and the legislature will work to find common ground versus political parties. Should this be a federal solution? Yes. But barring federal action, we don’t mind being the Petri dish for the nation. Am I optimistic we will get significant reform? Yes. Will it be a heavy lift? Of course.” What appeals to Brook, Toebben and Guardino is the fact that the Gov. Schwarzenegger has not dived into legislation first. He has presented a proposal; not a bill. Which Brook, Toebben and Guardino think makes it easier to find common ground.

Guardino characterizes this approach as a second opinion -- something any wise patient should get before major surgery. “By presenting a plan, the Governor is assuring that health policy will not be confined to the narrow halls of Sacramento. Now it’s our responsibility as business leaders to get involved and build consensus. As our founder, David Packard said: ‘Our job as CEOs is not to sit on the sidelines to either cheer or jeer. Our job is to get into the game and move the ball forward.’ What I would like to add to that is: ‘As a business group we have a choice to either whine or win. We believe our role should be a proactive one of finding positive solutions and winning on important issues rather than whining about them.”

POLITICAL REALITIES

But how do you move reform forward? While people are concerned about health care, it is not their main issue, as identified in polls. Nationally, it ranks third after Iraq and the economy. Locally, it comes in after police and potholes.

“When you do polls on issues sensitive to the electorate, health care is not at the top of the list,” indicates Paul Leon, mayor of Ontario, located in San Bernardino County, one of the fastest growing counties in the country. “While there is general displeasure with cost, the public is indoctrinated to think that is what it costs. We need to get them engaged in the discussion so they can see they can have influence.”

Leon thinks there is an open mindedness now that has not existed in the past. “Health care has been the can of worms no one wanted to open. But, it has become increasingly clear in the political seats that our current method of providing health care is not working. It is not affordable. It is not accessible. And we are doing what we are doing in the most expensive way possible,” Leon stresses. “I think the danger we face is that we will do nothing out of fear of those who will take advantage of a system. I think we can address that and still do something. Because something has to be done.”

“California is definitely positioned to be a leader,” suggests Peter Harbage, with the New America Foundation, a nonpartisan, nonprofit think tank in Washington D.C. that has a major presence in California. “There is a very good chance something significant will come out of the plans that are out there. Three very good plans -- two from the senate and assembly leadership and one from the governor -- all have significant areas of common ground. This could not be a better way to start. We are also seeing coalitions forming in the state with groups that have traditionally not worked together, such as the SEIU (Service Employees International Union) and California Medical Association. Others are joining or forming other coalitions. California has proposed the most sweeping changes of any state. This will not be without its trials, but there is very positive movement to find some key areas a lot of groups can get behind.”

That is echoed by the National Coalition on Health Care (NCHC), also out of D.C. “While health care reform must ultimately be addressed at the national level politically and financially, it will be first some successful state efforts that will create a path and tipping point for national reform,” stressed Patricia Schoeni, NCHC’s executive director. The group has over 70 organizations ranging from AARP and AFL-CIO to faith-based organizations.

What is striking about California is that the health care reform discussion is not being led by the usual suspects. New voices, such as the Silicon Valley Leadership Group are emerging; chambers are moving forward to find some solutions to a problem that has eluded this country for nearly eight decades. From the research tower of RAND to the city hall of Ontario, thoughtful leaders are saying: “get involved.”

What is new in California is the willingness to explore solutions, rather than insisting on leading with legislation. What is new in California is the language. The discussion is not stuck on the single-payer/health savings account divide. What is new in California is the awareness that increasing health care costs are serving practically no one, and are damaging California businesses and its economy. Everyone is paying more and getting less.

American health care reform has a solid history of holding the public at arm’s length. Maybe California can provide an example for the nation by tapping into the ingenuity of the American people to allow them to do what they do best -- innovate and solve problems.
 

Return to September 2007 Issue