Single-payer healthcare in California is possible. An economic and political thicket stands in the way

Is there a pathway for California to create a universal healthcare system, one with benefits paid through a “unified financing system” that merges federal and state funds with costs now borne by employers and — probably — a new layer of taxation?

The answer appears to be that, while such a pathway may be possible, hacking it through the thicket of healthcare economics and politics would require dozens — or even hundreds — of difficult choices.

That’s the gist of a 181-page report from a team of University of California researchers that was charged with defining the factors to be resolved before such a system could be implemented.

On Wednesday the research team, organized by the UCLA Center for Health Policy Research, outlined the report’s findings and fielded questions during a webinar. Its responses about the specifics of a unified system generally boiled down to maybe yes, maybe no.

In other words, someone or some entity would have to plow through the seemingly countless variables catalogued in the report and decide which would be included and which would be excluded.

Those variables start with the overall approach. Would it be a “single-payer” system in which the state finances medical services for every Californian, similar to the systems in the United Kingdom and parts of Western Europe? Or would it be a hybrid that retains some aspects of the current system?

Would the state pay the current private and public health care providers or set up its own proprietary network? Would payments be fee-for-service or encompass the managed care system that currently dominates health insurance?

Would the federal government, which now pays roughly half of California’s healthcare bills through Medicare, Medi-Cal and various programs for federal workers, be willing to give the state those many billions of dollars for a unified system? How would undocumented immigrants — now ineligible for federally financed services — be handled?

The report generally contends that a single-payer system would, by eliminating the paperwork and other aspects of the current system, be the most efficient from a cost/benefit basis. However, it would probably be the most difficult version to create from a political standpoint.

Single-payer would be a holy grail achievement for the political left, both in California and nationwide. The current search for some form began eight years ago when Gavin Newsom, then running for governor, declared “I’m tired of politicians saying they support single-payer but that it’s too soon, too expensive or someone else’s problem,” thus pledging to pursue it.

Once elected, however, Newsom drifted away, eventually calling single-payer “aspirational” rather than a hard promise, and sought incremental extension of coverage through Medi-Cal and other programs.

He did, however, sign legislation in 2019 creating a commission to study the issue, saying, “As our march toward universal coverage continues I am calling on the brightest minds — from public and private sectors — to serve in the Healthy California for All Commission to improve the health of our state.”

The commission’s 2022 report endorsed a “system of unified financing,” but didn’t specify a single-payer system. It led to the 2023 passage of Senate Bill 770 that, among other things, called for the UC study on alternatives that was released in April.

In a sense, the issue has come full circle. When Newsom advanced the notion of a single-payer system in 2018, everyone knowledgeable about the state’s massive, very expensive and multi-player system of healthcare also knew that fundamental change would be very complicated and very difficult.

The UC report says the same thing, only in more detail. Newsom managed to avoid making those tough decisions and will soon depart, probably for a presidential campaign. Will the pursuit of a pathway continue? Or has it just been a theoretical exercise?