Overview
TPP first looked at the "healthcare" issue back in November of 2008. The options argued during the Presidential Campaign were clear cut and polar opposites. John McCain sought to privatize health insurance and make it portable by disengaging it as an employer responsibility. Barack Obama  never quite came out for socialized medicine, but he saw a large role for the government to play in making sure all Americans received health insurance. President Obama placed healthcare on the front-burner of his administration with a goal to have legislation passed prior to the Congressional recess starting on August 1. That did not happen. As we examined in our November piece, well ahead of the rest of the media, most people are concerned for the uninsured, but are unwilling to make changes in their own coverage. Virtually no one in a private plan expressed any interest in participating in a government plan, most often citing the abysmal care that non-trauma patients receive via the VA. At the same time, many expressed strong reservations about completely privatizing healthcare - the system, as it is set up, is not perfect, but it is familiar, and the vast majority of participants are satisfied with it. The refrain heard over and over on both the comment page and the TPP emailbox was an appeal to get more of the uninsured insured, while leaving existing healthcare alone. This was a point that President Obama acceded to in April, when he stated that whatever outcome the legislative branch comes up with, a European or Canadian plan seems remote. He allowed that most people are comfortable with the current system, and whatever healthcare reforms he sought to carry out would take that into account.

Congress has done what Congress does - it has measured and heard the will of the people, and the will of the people has effectively monkey-wrenched the idea of single-payer government run healthcare. Most TPP subscribers have related that they agree that the "public option" should not be mandated for all, and many were suspicious of claims that even if a "public option" were offered, they would not wind up in it through employers just dumping their healthcare programs as a cost cutting measure. Still, TPP readers are concerned with the problems of the uninsured both in not receiving adequate care, and in the drain on the healthcare system that unreimbursed expenses relating to the uninsured cost. As one reader said - "That's why an aspirin costs $25.00 at the hospital."

TPP saw Healthy San Francisco (HSF) - a program conceived and initiated by now California State Assemblyman Tom Ammiano, and promoted by Mayor Gavin Newsom, currently running for Governor of California, as a possible solution. Acting within the restrictions of California State law regarding health care and health insurance, Healthy San Francisco appeared to be a rational and effective means to stop the hemmorage of city and county funds covering emergency room care for the uninsured. It also provided a structure for regular and routine health maintenance for the uninsured to cut back on preventable critical care.

HSF created a new system of providing “medical homes” to San Francisco’s uninsured adults. In short, the program is open to all residents of San Francisco who do not have private healthcare insurance, and who are ineligible for currently offered government healthcare assistance (Medicaid, MediCal, SCHIP, etc.). HSF does not provide insurance but does place individuals with a “medical home” (a place to receive medical care), which stresses preventive care. Other services provided include specialty care, urgent and emergency care, mental health services, substance abuse services, labwork, inpatient hospitalization, radiology, and prescription drugs. Members are given an ID card and are encouraged to select a primary care clinic as their base for medical services. All participants are encouraged to get regular screenings and check-ups. Services are provided by San Francisco General Hospital, community health clinics and public health department providers.

There are membership fees based on a sliding scale. Persons below the Federal Poverty Level (FPL) pay nothing. Those above the FPL pay monthly member contributions of $25.00 to $225.00 per month. Co-payments for visits cost between $10.00 and $20.00. Inpatient hospital stay copays run between $200.00 and $350.00.

HSF eligibility requires the following qualifications. Members must be between 18 and 64 years old, uninsured, live within the city limits, and be ineligible for other public coverage programs. Initial enrollment was limited to people with income under 100% of the FPL, but is being expanded to include all residents – regardless of income or immigration status. Currently all residents who meet these criteria, with up an income of up to 500% of the FPL are eligible. This translates out to coverage for individuals earning $54K per year, and families earning $110K.

Employers can select HSF as part of the minimum employer healthcare-spending requirement of San Francisco. This requirement applies to all employers with 20 or more employees. This provision requires all employers in this category who do not contribute to insurance, health savings accounts or medical expenses to contribute $1.17 per worker, per hour  - for a full time employee this translates out to 187.20 per month. Employers with over 100 workers are required to contribute $1.76 per worker, per hour - $282.60 per month for a full time employee. This provision is being challenged in court by The Golden Gate Restaurant Association on the grounds that it violates ERISA statutes. The district court ruled in favor of the GGRA on Dec 27 2007. The City of San Francisco filed for a stay of judgment with the 9th Circuit Court of Appeals, which suspended the lower court’s ruling, and allowed implementation of the Employer Spending Requirement. On Sept 30, 2008 a three judge panel of the 9th Circuit ruled in favor of the city ruling that HSF does not interfere with ERISA. On Nov 3, 2008 two employer groups of the GGRA filed “friend of the court” briefs on the decision. The United States Supreme Court will announce on October 5, 2009 whether it will hear the case, or allow the decision of the 9th Circuit to stand.

Funding for HSF is provided as follows. The City / County of San Francisco provides $111 million as part of the SF dept of Public Health to provide care to the indigent and uninsured. A Federal Allocation under the Federal Health Care Coverage Initiative was secured for 3 years totaling $73.12 million (allowing an annual contribution of $24 million). The State of California provides $45 million to the city in health funds re-allocated to this program. Employer contribution is $12 million annually. Employee contribution is $8 million annually. This give total working assets of $200 million. During the 2007-2008 fiscal year and additional $23 million was added in an augmentation budget to cover service and delivery improvement and enhancement. These funds were secured primarily from Federal sources and participation fees.

As of July 2009, HSF enrollment has reached over 34,000 participants, with 734 employers electing to use HSF as their choice for the healthcare spending requirement. Participation of primary providers and hospitals is on the rise, and currently consists of 27 clinics acting in cooperation with San Francisco General Hospital.

What “Healthy San Francisco” is Not
Healthy San Francisco is not Universal Coverage. It does not provide either insurance or services to everyone living in the city. It selects a specific targeted group – the uninsured who are ineligible for other government health programs – and seeks to manage their healthcare in a pro-active form through prevention of illness as well as treatment of illness. It uses funds allocated to reimburse hospitals and emergency rooms for indigent care expenses, and re-allocates those funds in a way designed to make those funds go further. The initial estimate of the city’s uninsured was 82,000, of which 57,000 were already in the county’s safety net system. The net remaining 25,000 were the initial target group. The population of San Francisco is approximately 800,000 of which the target group represents 0.03%. The participating membership represents 0.04 percent of the population. 

Healthy San Francisco does not provide care outside of San Francisco, care outside of the HSF network, vision, dental or long-term care. Fertility and cosmetic procedures are not covered.

It cost $6720.00 per person in the 2007-2008 fiscal year to administer and provide services to the membership of HSF.

While not affecting businesses under 20 employees, the Healthcare Spending Requirement does put a significant burden on certain segments of the San Francisco economy – most notable among these in the restaurant and entertainment sectors. There is generally pressure on these businesses to keep costs low as they are dependent of the discretionary dollars of their patrons. As witnessed by the ongoing lawsuit filed by the GGRA, the added burden of increase in employment costs threatens the viability of many of the member businesses. This leads to other cost cutting measures, such as reduced staff and other benefits, and scaling back their own business expenses. Increasing unemployment and scaled back business investment adds more strain to an already unstable economy.

San Francisco still retains a problem with uninsured non-participants, which continues to sap funds from the remaining pool of tax dollars. These uninsured are generally those who live at the fringes of society – illegal immigrants, drug users, gang members. The city has made outreach efforts to these groups, but because of their status with the law, many remain wary of opening themselves up for the benefits of medical care. Unfortunately, these groups, because of their legal situations represent the most costly forms of medical care when needed – and almost always administered at hospital emergency rooms in emergency situations.

What “Healthy San Francisco” is
Healthy San Francisco is an innovative and creative way to use public health funds in a way designed to maximize their effectiveness. People who had little or no access to healthcare and health advice now have the opportunity to gain and maintain good health, and to receive medical treatment before illness gets to the stage of life –threatening. Though numbers are not currently available, there is logically a cost benefit to cutting back on the number of serious illnesses and untreated chronic health problems (such as diabetes or hypertension).

Healthy San Francisco also provides a service of value – by having a membership contribution, the member must value his health enough to justify the expense. The member is then far more likely to use the services available to him, which emphasize good health and prevention of illness and disease. This provides a benefit to city employers in reduction of lost workdays due to employee illness.

In targeting a specific population, San Francisco avoids the over-reaching risks associated with Universal Healthcare programs, and healthcare programs managed by other government entities. By limiting the scope of HSF to adult, uninsured not covered by existing government programs, San Francisco has limited its risk pool to a finite and manageable number of members. By limiting services to the traditional expectations of normal medical care; many of the more outlandish expenses can be avoided. In addition, promoting prevention of illness and disease provides a cost saving measure in many areas, for many members.

Common Sense Dictates
Mayor Gavin Newsom is the poster boy for liberal policy in the United States today. In the long run, he would support full government-administered Universal healthcare, for San Francisco and the country. He sees this as the best possible solution. Many agree with him, many do not. Due to the legal restraints placed on him by state and federal law he was left to search for a system to counter the flood of tax dollars flowing out of the treasury and disappearing into the void of the uninsured. In embracing Mr. Ammiano's plan, Newsom and his advisers stepped away from the philosophical argument of whether the current system was good or bad. Instead, they came implemented a plan to remedy their specific situation. The program is too new to see if real success and savings are being accomplished. Already in the first year there were cost over-runs that needed additional funding. This happens with any government program. Funding has increased for the city of San Francisco by almost 50% in 2009 due to the expansion of coverage to higher income groups, and with the current state and federal budget situations, cuts may force HSF to retreat from it's ambitious expansion. Success will probably not accurately be measured for several years. One can imagine at least the success of reduced emergency room reimbursements, and citizens in need of medication for chronic conditions being able to live a healthier, more productive life. On the negative are those still left behind – there will always be some left behind; and the possibility for the partisan claws of government to destroy what on the surface looks like a well-reasoned and capable solution for a serious fiscal problem. Whether Healthy San Francisco can serve as a model to the current healthcare debate on the Federal level is unknown. A city of 800,00 and a country of 300 million have different needs and logistics. Perhaps some ideas will translate well to the Federal level. It would serve the Federal government well to follow the example of the Newsom Administration and to not try to over-reach, but to actually study the problem of healthcare in America, and fix the actual problems and gaps in the system. Assemblyman Ammiano and Mayor Newsom made the problem the focus of the solution. They did not pursue a panacea for all of the problems attached to the problem at hand. Common Sense would dictate that to be a wise approach.

RLB