Vast Majority Of State\'s Healthcare Is Publicly Funded

Despite an ongoing debate about using government funds to finance healthcare delivery, a large majority of California's system is already publicly financed, suggesting a move toward a single-payer system would be a logical – rather than radical – step.

            That's the conclusion of researchers at the UCLA Center for Health Policy Research. Its recently released study has concluded that the current estimates of publicly-funded healthcare expenditures from the federal Centers for Medicare & Medicaid Services (CMS) are vastly underestimated for the Golden State.

            According to CMS data, 45% of healthcare expenditures in California last year were paid through Medicare, Medicaid/Medi-Cal and the Children's Health Insurance Program, or CHIP. But the study contends that when county-level healthcare expenditures, tax subsidies under the Affordable Care Act and other sources of spending are factored in, public funding for healthcare services statewide would actually comprise 71% of all dollars spent. That's significantly higher than the national level, where 65% of all spending comes from public funding.

            Of the $367.5 billion projected to be spent on healthcare services in California this year, $260.9 billion is projected to come from public funds.

            The primary reason for that, researchers say, is that California has been particularly aggressive in ramping up enrollment in Medi-Cal, the state's Medicaid program. Enrollment rose significantly during the onset of the Great Recession that began in late 2007. It was driven up further as part of the Road to Reform federal waiver, which allowed qualifying Californians to be enrolled in Medi-Cal years before they would have become eligible as part of the ACA.

            As a result, nearly a third of the state's 36 million residents are enrolled in Medi-Cal. That's up from 5 million, or about 15% of the state's population, in 2001, according to data from the state Department of Health Care Services.

            The largest source of public funds is the Medi-Cal/Healthy Families program, which comprises 27.3% of all healthcare spending, followed by Medicare, at 20.3%. Employer-based premium contributions total only 15.9% of premiums.

            “For a majority of Californians, a public-run system is already the reality,” said Andrea Sorensen, a graduate student at the UCLA Fielding School of Public Health and co-author of the study. She added that “a single-payer system could unite all these various programs and expand them to the entire population, resulting in a more streamlined and cost-effective approach to healthcare spending.”

            The study did not fully endorse single-payer or say it was an inevitably, but it did suggest it may be a feasible approach in California in the future, and a potential antidote to the currently fragmented and disparate financing for healthcare services.      

            “The public sector is the primary player in healthcare spending,” said Gerald Kominski, the study's lead author and director of the UCLA Center. “But monies are disbursed in a fragmented way through numerous different entities, each of which has their own system and way of doing things. The question for policy makers is, ‘does this fragmented approach make sense?’”