State of emergency

As program director of the National AIDS Network in the 1980s, Peter Lee helped organize protests outside the While House, as then-President Ronald Reagan refused to confront the epidemic. Lee’s main focus at the time was getting access to health care for the hundreds of thousands of Americans affected by the epidemic.

Three decades later, Lee found himself visiting the White House again, while working for President Barack Obama as the deputy director of the Center for Medicare and Medicaid Innovation.

Now, five years into his tenure as Covered California’s executive director, Lee remains committed to the cause of health-care access—and his main adversary is again the man in the White House.

CN&R publisher and CEO Jeff vonKaenel visited Lee at his Sacramento office recently to discuss the Affordable Care Act, skyrocketing costs and California’s role in the future of health care.

Since Donald Trump took office, it seems like every day there’s a new issue, a new conflict in relation to Covered California and the Affordable Care Act. What is keeping you up at night about these issues?

Well, the thing I’d start with is the reminder of where we are not. President Trump ran on a platform that included “repeal and replace” the Affordable Care Act. And it’s so important that we are light-years away from that. …

But I will talk about what I call “the nipping at the heels.” One fundamental element of the ACA relates to the restructuring of the insurance system. However, the [federal] tax act of last year did away with the ACA’s mandate.

That will mean two things: that there will be hundreds of thousands of Californians [who] are uninsured because they think it’s smarter to roll the dice on not having coverage, and that premiums will go up for everyone else. So that, in essence, all Californians, including those with employer-based coverage, are gonna pay more.

There’s been discussion about restructuring health-care insurance, either with single-payer or a public option. What are your thoughts on those?

I’m very much a focused-on-the-here-and-now kind of guy. We have with the Affordable Care Act, the tools, if we keep making it work, to be very, very close to universal coverage. To my mind, what we should be trying to do is get everybody coverage, spend less money on administrative waste and spend more money effectively on people getting the right care at the right time. And whether you have a single-payer system or a very diverse system doesn’t say you necessarily get there.

The other thing to remember is that about 70 percent of health-care dollars are public dollars today. When you add up Medicare spending, Medi-Cal spending—one-third of Californians under 65 now [have] Medi-Cal—and the employer tax benefit, it’s a lot. …

The thing that we do spend [more on] compared to other nations is administration; it’s about 8 percent of our spending, compared to 3 percent. That’s a lot, but that difference between 3 and 8 percent doesn’t account for our health-care costs being double…

The bigger issue is we pay more for everything … and so the challenge we have is we need to, number one, make sure people aren’t getting unnecessary care.

What do you think of the public option expansion and single payer?

In Covered California, we have 11 health plans that compete for enrollment. One of them is LA Care … a publicly responsible entity. Our second largest plan in California is Blue Shield of California, which is a nonprofit.

So—what do we mean by a public option? From day one, we at Covered California wanted a range of choices. In Northern California, in the very beginning days, we approached CenCal [Health], which is a Medi-Cal plan, a public plan. And they said: “Excuse me, we’re about to grow our Medi-Cal enrollment by threefold, and you want us to be distracted by this? Give me a break.” And so it wasn’t from lack of mission alignment, it’s bandwidth. So the issue of a public option, I’m really not sure what it means or how you structure it.

Let’s talk about affordability. You mentioned we’re paying twice the GDP for our health care, without any significant health improvements. So—it’s called the Affordable Care Act …

One of the really healthy things that has come up in the last five years, and I’ve actually seen some of your reporting on this, is a recognition that health isn’t just about the health-care system. It’s about communities, about social determinants, and those factors have a lot more in the long run to do about health and health-care costs than, “Can you do a good surgery?”

While we spend double what the rest of the developed world spends on health care, we spend half what the rest of the world spends on social policies that lead to better health. And this might be a homelessness program; this might be programs for women after giving birth to a baby, being able to stay out of work for longer. These might be food programs. …

And the Affordable Care Act actually started down that path by having major funding for community preventive health. Those programs have been gutted.

If I made you our health-care czar and said, “OK, let’s improve health care but let’s cut out 3 percent of the GDP that we’re spending on it,” what would you do?

I would start by saying this czar wouldn’t have unrealistic ambitions. Which is, we ain’t going to cut 3 percent out of the GDP. Rather, I’d say, “Sorry, if you want a czar that can do that, that’s a czar that’s living in la-la land.”

What would I do to reduce cost growth? One, we should be looking at having caps on what some providers charge. What we’re paying is too much. Second, we do spend far too much on administration and having things like patient-centered benefits, not just in Covered California, but with large employers. So, I would look at administrative simplification.