By Larry M. Buchanan

It is widely recognized throughout the health care industry that the United States leads the world in health care spending per capita. As consumers, we typically tend to justify that cost, subscribing to the logic that a higher price tag is synonymous with the word “better.” If we’re paying more for health care, we must be getting more for it.

We even go one step further, accepting the argument that other western nations operating under the failed ideology of “socialized medicine” simply cannot provide the variety of advanced services or the superior level of care that we receive here. In a world where you get what you pay for, no one wants to gamble with his or her own health.

The chilling dose of reality for American health care consumers is that for all of our spending, the World Health Organization ranks our health care system 37th in overall performance — right between Costa Rica and Slovenia. The Institute of Medicine further reports that there are 98,000 deaths in the United States every year due to medical error, and patients are treated according to clinical guidelines only 50 percent of the time.

Health care industry proponents note that an over-utilization of services, runaway class-action lawsuits and an increased demand for the highest quality medical treatments — which in turn require a comparable level of research and development for new procedures and prescription drugs — are all contributing factors that drive up the costs of insurance premiums, co-payments and overall care.

Advocates for health care consumers, on the other hand, point to the apparent price gouging of major pharmaceutical companies, the consolidation of a privatized health care industry and a general lack of accountability for hospitals, insurance plans and for our health care system as a whole. The results are poor outcomes and a 30 percent administrative overhead. 

Regardless of where we as individuals stand regarding this broad range of complex and seemingly contradictory data, the clear and unfortunate consequences are those faced by Americans who have health insurance and those who don’t. Between 2000 and 2004, insurance company profits skyrocketed 234 percent; the number employers offering health care coverage between 2000 and 2005 dropped 9 percent, according to the Kaiser Family Foundation.

During that time, the average combined employer and employee health care expenditures for a family of four increased by about $1,000 per year. The U.S. census reported that as of 2005, approximately 46.6 million Americans, or nearly 16 percent of our total population, was without health insurance coverage.

We rank 36th in infant mortality, and in California, where 800,000 children are without even the most basic form of health insurance coverage, our state could cut that number in half if it enrolled all children who are currently eligible for our Healthy Families Program.

The prognosis is no better for our public school system. California’s Department of Education reports that health and welfare expenditures by K-12 schools increased $1.3 billion between 1998-99 and 2002-03. Annual double-digit increases in health care premiums place administrators in the precarious position of either raiding the general fund budget, passing the cost along to employees or choosing some derivation thereof.

Costs of a fractured health care system

A fractured health care system adds to the amount of administrative time spent negotiating with and on behalf of employees, compounds the effects of school site nursing shortages, commits further staff hours to referring students for enrollment in the Healthy Families Program and generally contributes to the factors that continue to drain public education of sparse resources.

There should be further cause for concern in our lowest-decile school districts when school budgets are directly linked to the attendance and scores of our poorest students, who may be least likely to have insurance coverage at home. The effect of ensuring that all Californians have health care is healthier families who send healthier kids to school, higher test scores, better educational outcomes, less time spent at the bargaining table and an overall healthier economy. 

More accountability needed in health care

Still, in an era of cost accountability and benchmarks in the education community, we find those in the health care industry who are responsible for the physical well-being of our students and employees immune to the kind of transparency and quality assessments that school sites and districts must succumb to.

Some might argue that therein lies the problem — as health care services on a national scale move toward consolidation and privatization, industry is responsible for our immediate physical safety. Is that argument less of a concern if we have strong accountability and cost reconciliation measures in place? Possibly.

Our own health is marketed to consumers as if it were a commodity, yet Californians are not likely to see the cost and success ratio of a regional hospital’s cardiac surgical team or a hospital’s post-op infection rate on the cover of Consumer Reports any time soon. That kind of consumer data, while useful to both the bargaining units of employers and employees, is largely unavailable for general review.

Further, due to the increasing trend of hospital consolidation and privatization, there are no cost containment benchmarks that either set a price or provide a price calculation formula for a given procedure or course of treatment. One example, published in the Wall Street Journal in 2004, noted that regionally, the cost for a chest X-ray in California varied between the low hundreds of dollars in San Francisco and San Diego to nearly $1,500 in Modesto.

When comparing the extent to which public education is required to report its own costs and to meet performance goals for the purposes of legislative and public oversight, this kind of cost variation in hospitals — which is more than 300 percent — should be considered the very type of information that legislatures mandate of our health care industry. 

For the most part, the data that we actually do have as consumers regarding our health care system is retroactive. Hospital and insurance plan data regarding cost and the quality of care Californians receive is not taken proactively for either the purposes of consumer or even legislative oversight, but rather for internal analysis and shareholder review.

That data is released voluntarily — meaning that our discussions of the health care industry, whether as consumers or even legislators, are often ill-informed and lacking the kind of transparent information that is necessary to truly serve the public good.

Status quo can’t continue

While the accepted nonpartisan goal is to insure all Californians under a system that provides affordable, reliable and efficient health care delivery, the remaining fact is that today we have none of those things within the current system, and we cannot afford — socially or economically — to continue with the health care industry’s status quo.

Further, the tone in Sacramento leaves little room for encouragement. It is clear that the likelihood of reaching an overall policy consensus regarding the appropriate reform package, not to mention the funding mechanism, is less than promising for the coming legislative session. Have we taken a step backward from 2006 when the decision was either “Yea” or “Nea” on single payer? Interested parties will have to wait for the analysis of this year’s proposals before new lines are drawn in the debate.

While the jury is out, it is vital that we identify the additional steps needed to effectively develop the organizational efficacy of public education in the health care arena. Statewide and regionally, school districts and their employee associations are partnering with the California Health Care Coalition and have created an additional coalition to develop an over-arching position for public education on health care reform.

I currently represent ACSA on the steering committee of that coalition, dubbed California’s Educational Coalition for Healthcare Reform. Among the coalition’s goals are combining the substantial network of local, regional and statewide lobbying, negotiating and data-collecting potentials of its membership to develop an internal consensus within public education; one that reflects the nonpartisan health care needs of school district employers, employees, teachers and students.

It is clear that California’s school district administrators can and should play a much larger role in the health care reform discussion. The budgetary, insurance and care needs of our schools, our employees, our students and their families may very well be met and balanced by the eventual reform policy that emerges from the Legislature.

But as employers, much less a statewide organization, we have not yet come together to discuss what those needs are, what districts and their employees are lacking, or what steps to health care reform we deem most critical to public education. Our statewide association must work to help all school administrators understand that our collective efficacy as the institution of public education in California far outweighs that of our individual organizations and interests.

Furthermore, in a political climate where statewide advocacy efforts are bringing together regional groups, including the unions of educational employees, our association of administrators needs to develop the kind of regional and statewide awareness of the system that is needed to substantively contribute.

Our parochial understanding of the health care system and how it affects our school sites and employees is the single greatest limiting factor to our ability as an organization to collectively agree on the principles that are most important to California school districts regarding health care reform.

Schools could yield information on savings

Simply due to the nature of our role as both publicly accountable employers and as educators whose primary goal is the betterment of our student population, school districts have substantive information to offer regarding potential savings that we would see under a universal plan, and the additional costs that we incur under the current system.

Many of those costs and savings do not typically apply to private or even public agencies. Yet, if we were to singularly examine our status as employers in the state of California, we do have valuable information on employee benefit negotiations and the institutional costs of purchasing those benefits that many businesses have been reluctant to hand over for legislative consideration. Additionally, it follows that in the absence of an approved statewide plan for all Californians, public education and its administrators have an interest in developing the critical mass necessary to negotiate as one entity.

Statewide, public school districts purchase health insurance for more than one million employees at an annual cost of $4.5 billion. That collective purchasing power emboldens school districts to mandate information from our brokers and hospitals to find what we are actually getting for our dollar. Such data will allow school districts across the state to move toward the possibility of negotiating in a statewide pool.

Local pilot program

In Sacramento, there is an opportunity to begin discussions between the county’s superintendents and local hospitals to deliver the kind of pilot program needed to demonstrate the potential of a regional high-performance network of hospitals and of a larger school pool. Receiving, analyzing and sharing industry data with our negotiating units and staff will give us a realistic picture of what coverage and care actually look like in this region.

Subsequent discussions about quality, cost, cost variation and administrative transparency will then serve as a foundation for reconciling price with performance outcomes in this region. A baseline of standards and practices that act as prerequisites to participating in our network of hospitals can then be formed to ensure that our hospitals actually meet our employees’ needs.

Many of our local superintendents belong to the California Health Care Coalition, which has been instrumental in educating our administrative team and in coming to our own local consensus about the progress that can be made in the absence of an approved statewide policy.

If a high performance network does lead to regional accountability and transparency, we will present that information as a case study in developing cohesion among those with health care interests in public education. Further, data achieved from such work can act as our litmus test for considering local, regional and statewide health care policies and practices.

The continued involvement of the California Health Care Coalition and the Educational Coalition for Healthcare Reform will be vital in our efforts to develop the organizational capacity necessary to ensure that our school site, local and regional goals coincide with a statewide understanding of what health care reform should look like for the education community.

Public education in California can and should stand together collectively as employers, employees and as an institution that represents the needs of our students and families, to be an agent of change in the debate over comprehensive health care reform in our state.

Larry M. Buchanan, superintendent of the Grant Joint Union High School District, serves on the Board of Directors for the California Health Care Coalition as well as the steering committee for the Educational Coalition for Healthcare Reform. He was named ACSA’s Superintendent of the Year in 2005.