San Francisco’s ‘public option’ _ a city-run health care program _ informs national debate

San Francisco’s health care a model during debate

SAN FRANCISCO — This city did not wait for Washington’s health care overhaul. Most uninsured adults here are already reaping the benefits of a government-run health care program — seeing doctors, filling prescriptions, and getting surgeries they could not otherwise afford.

Healthy San Francisco is the nation’s first city-run universal health care plan. While not insurance and not valid outside the city, it does illustrate how some hotly debated elements of plans being considered on Capitol Hill might play out.

In just over two years, the $126 million program has won over its target population, and now covers about 48,000 people — more than two-thirds of San Franciscans who previously had no insurance.

About $20 million a year comes from employers who are required to contribute to their workers’ health care. The mandate is a contentious aspect of the Democratic plan, and the most controversial aspect of San Francisco’s plan.

The program’s challenges — including a suit from the city’s restaurant association over the employer mandate — may be an indication of the land mines ahead for legislators crafting a new framework for the nation’s health care.

But according to those most directly affected, patients and doctors, the plan works.

“It makes me feel safer to know I have somewhere to go, especially if I get really sick,” said Juan Martin, 26, a line cook who showed up at the South of Market Health Care Center feeling nauseous and dizzy.

Martin first tried the program last year, when he needed surgery after boxes collapsed on him at work. It was all covered, he said: the hospital stay, the follow-up visits.

Providing health care to people like Martin is a moral and legal obligation, said Mayor Gavin Newsom, who was behind the plan.

“We’re doing this for pragmatic reasons,” said Newsom. “I don’t know why one would spend more money on the back end, when the patient ends up in the emergency room, rather than stabilizing them on the front end.”

Healthy San Francisco assigns patients a home-base clinic, where they get to know their doctors. It provides preventive exams such as mammograms and colonoscopies, and long-term care for chronic conditions such as diabetes.

Surgeries are handled at San Francisco General Hospital, or three private hospitals which, along with Kaiser Permanente, have joined this private-public partnership.

As in Massachusetts, which also offers universal coverage, no one is denied services because of pre-existing conditions or ability to pay.

A recent survey by the nonpartisan Kaiser Family Foundation found 63 percent of users were “very satisfied” with the program, and another 31 percent were “somewhat satisfied.”

Communities around the country are paying attention. San Francisco’s health department has provided technical assistance to other cities, including New Orleans, Miami, Pittsburgh and Denver, where officials wanted to learn if the program would work for them.

President Barack Obama and House Speaker Nancy Pelosi, who pushed for the passage of the House’s landmark health care reform legislation, have pointed to Healthy San Francisco as a model.

“All this fear you hear around those words, ‘public option,’ said Peter Berman, the clinic’s medical director. “What we’re seeing here is working.”

Anyone can join as long as they show proof of residency, meet income requirements, have been uninsured for at least three months, and do not qualify for state or federal public insurance programs.

For the approximately 70 percent of Healthy San Francisco users who earn less than the federal poverty level, the program is free.

Participants at the highest income level allowed into the program — those making up to $54,180, or five times the federal poverty level — pay $450 every three months, plus copays of $10 for general care and $20 for specialty care. Hospital stays cost $200.

“What San Francisco proved is that if it is affordable, people will overwhelmingly join,” said Mitch Katz, the city’s public health director.

Businesses can meet the requirement helping fund their workers’ health care coverage by getting insurance, paying into Healthy San Francisco, or putting money aside in a health savings account. To many entrepreneurs, the demand looks like a tax on businesses that are already required to pay sick days and a city minimum wage that is $2.54 more per hour than the federal wage.

“I’m paying triple for a waiter than anyone else,” said Daniel Scherotter, owner and chef of Palio D’Asti, an Italian restaurant in San Francisco’s financial district.

Scherotter has always offered to split the cost of insurance with the employees who want it — but many in his young work force chose to do without. The escalating cost of doing business has forced him to let workers go over the years, and Healthy San Francisco pushed him to cut costs further, he said.

“We used to make our own bread, our own gelato, our own sausage and salami and chocolate truffles — all skilled labor that we’ve had to outsource,” he said.

The Golden Gate Restaurant Association sued the city, saying the requirement placed an undue burden on them. They petitioned the U.S. Supreme Court for a hearing.

While business contributions are significant — $1.85 per hour worked for employers with more than 100 workers — research found this has not translated into layoffs, said William Dow, a health economics researcher with the University of California, Berkeley.

Costs of the program were kept low by relying on providers that already cared for the uninsured, paying doctors a salary instead of fees for service provided, and creating a tracking system that avoids duplication of tests.

Even after a national overhaul, many — the homeless, undocumented immigrants, the severely mentally ill — will likely remain uninsured and needing care. How to care for those who fall through the system may be Healthy San Francisco’s greatest contribution to the national debate.

“Will it be done in a systematic, more effective way, or will it be done the old way, which is so wasteful?” Katz asked.