San Francisco plan to cover everyone

Physicians support the principles of extending access to care but wonder how the funding will shake out.

By Beth Wilson amednews correspondent — Posted Aug. 21, 2006

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As San Francisco prepares to become the first city to offer universal health care to its residents, local physicians applaud the plan, although many key provisions must be ironed out before implementation.

Mayor Gavin Newsom Aug. 7 signed an ordinance providing health care access to some 82,000 uninsured San Francisco residents. The program is aimed at people who earn too much to qualify for Medicaid but not enough to afford private insurance.

Under the groundbreaking measure, estimated to cost about $200,000 million during its first year, eligible residents could enroll as individuals or as a group through an employer to receive care at select city clinics and hospitals, beginning as early as July 2007.

Services, which include Pap smears, prescriptions, x-rays, routine office visits and surgery, would be covered and paid for through a combination of $104 million in city money, individual fees and potential co-pays, and employer contributions.

The plan, however, is not an insurance program. Services are available only to city residents while they are inside San Francisco County.

Participating physicians would receive some form of reimbursement but the exact amount is unclear, said Gordon Fung, MD, MPH, who serves as the San Francisco Medical Society president and sat on the Universal Healthcare Council, a group of medical professionals, insurers and business owners assembled by the mayor to study the issue.

"The funding aspects are still a bit murky," he said. "The medical society wants to get some firm answers."

It plans to hold a town hall-style meeting to discuss the plan, ask questions and decide whether the medical society will back the program, Dr. Fung said.

"We all support the principle of covering more people," he said.

Michael Drennan, MD, a primary care physician who serves as the San Francisco Dept. of Public Health's director of community-oriented primary care, said the plan reflects the desires of many physicians who work at the city's 15 neighborhood clinics and 10 nonprofit health centers.

"It's what we've long hoped for," said Dr. Drennan, who also was a member of the Universal Healthcare Council.

Under the plan, uninsured residents could receive services from a designated network of doctors, other health professionals and health care facilities. Although officials are still in the process of developing that network, the San Francisco Dept. of Public Health will serve as the program's backbone.

Dr. Drennan estimates the department's health professionals and facilities already treat roughly 40% to 60% of the 82,000 uninsured residents and would need to prepare for about 20% to 25% more patients in the plan's first year.

"The biggest challenge will be to figure out how we can ramp up and prevent a backlog," he said. "It's a capacity issue. We'll have to do things in new ways to take care of patients."

Some patients, for example, may not need to see a physician and instead can meet with a nurse or nurse practitioner for patient education or health care maintenance, Dr. Drennan said.

To help manage the influx of new patients, San Francisco's health care plan will be implemented in phases with a goal of providing service first to those most in need.

Imposing an employer mandate

The ordinance includes a health spending mandate for large- and medium-sized companies. Businesses with more than 100 workers will be required to spend a minimum of $1.60 per hour per employee on health care benefits or contribute that money to the overall plan. Businesses employing from 20 to 99 workers would be required to spend a minimum of $1.06 per hour per employee.

Companies that have fewer than 20 employees are exempt, as are nonprofit groups with fewer than 50 workers.

Because most physician offices fall under the employee minimum, physicians who run their own practices likely will not be affected.

Some local business groups that will be affected have met the funding mandate with resistance and threats of legal action.

"There will be litigation," said Jim Lazarus, vice president of public policy for San Francisco's Chamber of Commerce. "There's no secret many employers believe the mandate portion of the ordinance may be illegal."

Although the business community supports providing health services to the city's uninsured residents and is willing to contribute, many businesses opposed the mandate because it is not based on an employer's ability to pay, Lazarus said. Restaurants, for example, will be hard hit by the ordinance, he noted.

The American Medical Association has not yet reviewed the San Francisco initiative, although doing so is on the Association's agenda.

The AMA also has a plan to expand coverage for the uninsured. In the short term, the Association advocates for incremental measures to increase coverage for children, as well as lower-income individuals and families. In the long term, it will continue to press for the adoption of a consumer-driven, market-based plan to expand coverage through tax credits and insurance market reforms.

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Health care for the uninsured

Who's covered? About 82,000 uninsured San Francisco residents are eligible.

How does it work? Beginning in phases starting in July 2007, those residents can enroll as individuals or through employers as a group to receive comprehensive primary care at a network of public and private clinics and hospitals.

What's covered? Lab work, Pap smears, prescriptions, x-rays, routine office visits, hospitalization and surgery.

How much will it cost? About $200 million, of which the city would pay $104 million -- money that now goes toward uninsured care.

Who pays the difference? Remaining costs would be borne by businesses and individual participants, who would pay an income-based program fee and possibly co-pays. Companies, depending upon size, are required to pay between $1.06 and $1.60 an hour per employee either into the overall plan or for health care benefits. Small companies are exempt.

Are there restrictions? It's not an insurance program. Services are available only to city residents while they are inside San Francisco County.

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