A Healthier San Francisco

No web site to check, no number to call, no identifiable place to go. And even once you found a place to go, whether you could get in and how much it was going to cost was all a mystery.

That was the situation four years ago in San Francisco for the uninsured and sick. The City was spending millions every year on medical care for uninsured San Franciscans, but the care was unorganized and confusing, even to those who provided.

Today, there is healthysanfrancisco.org, a phone number—(415) 615-4500—and many places to go for medical care, due to the Healthy San Francisco health care coverage program. A first of its kind in the nation, the Healthy San Francisco program offers affordable health coverage to all low and moderate income uninsured residents of San Francisco. Coverage for low-income residents is highly subsidized, while higher-income participants buy into the program at rates that are significantly lower than the cost of individual insurance.

When people enroll in Healthy San Francisco, they get a card, a brochure that explains the program and what it covers, and a customer service number for assistance. In addition, participants select a primary care clinic from more than 30 participating clinics where they can get medical care. For an annual fee that is based on household income, participants get the medical care they need. All services have co-pays that are determined in advance. And all medical services—except dental, vision and any health care provided outside of San Francisco—are included in the program.

The last exception is an important one, because if participants have an accident on the wrong side of the Bay Bridge, the program does not cover medical expenses. On the other hand, San Francisco is the first city in the nation to guarantee health services to all uninsured residents and deliver on that promise.

How was it accomplished? First, by focusing on getting people into care, not into an insurance plan. Put another way, insurance is merely a vehicle for making the cost of health care affordable. With notable exceptions such as Kaiser Permanente, most insurance companies do not provide any medical care. They merely contract with medical care providers and pool the financial risk over large numbers of people.

The Healthy San Francisco program is a paradigm shift from the current focus in the United States on providing insurance instead of care. San Francisco took an already existing group of health care providers who saw uninsured and low-income patients, and created an organized, cohesive and transparent network of providers, allocating patients among them based on the providers' interest, capacity and attractiveness to program participants. The program then defined the range of services each provider was responsible for giving program participants. Providers' budgets are largely set in advance, so there is no incentive to over- or under-treat.

But organizing the providers and providing customer service to participants are not the only critical innovations of Healthy San Francisco. By far the most controversial but also most crucial aspect of the program is its reliance on an employer health care mandate.

The ordinance that created Healthy San Francisco also required all employers who have 20 or more employees in San Francisco to spend a minimum amount on health benefits for each San Francisco employee. Typical employer-provided health insurance exceeds this minimum cost, so employers who were already providing health insurance for their employees were not affected. However, employers who previously did not provide health benefits must either do so or pay the required minimum set by the ordinance into the Healthy San Francisco program. The policy idea behind the employer mandate was to give employers an incentive to provide health insurance, while mitigating the cost to the City for those employers who don't provide insurance.

The numbers showing the effect of Healthy San Francisco are pretty compelling: More than 45,000 people have enrolled, out of an estimated 75,000 people uninsured in San Francisco, a very good enrollment rate for a public program. And those participants are very pleased: A participant satisfaction survey commissioned by an outside foundation found that 94 percent are satisfied or very satisfied with the program, and 92 percent would recommend the program to a friend.1

One area that may need some work is participant education: While 85 percent of participants reported they understood how the program worked, only 35 percent said they understood it very well. This is understandable, since Healthy San Francisco is not insurance, but there is no other name for the model that resonates with most participants. In fact, what Healthy San Francisco amounts to is a single-payer, government-organized health care system.

And what about employers? Some employers have adjusted and are big believers in what the program can do for their employees, while others remain deeply opposed out of concern for the financial impact on small businesses—particularly restaurants—and are pursuing a lawsuit to overturn the employer mandate.

Little objective evidence of the effect on employment exists, other than an initial evaluation completed by the University of California, Berkeley Institute for Research on Labor and Employment in 2009.2 This evaluation noted that 20 percent of employers covered by the employer mandate are putting money into Healthy San Francisco for at least some of their employees. The evaluation also found no evidence that the employer mandate had reduced employment in San Francisco.

Is Healthy San Francisco innovative? Decidedly so. No other city or county in the nation has made and delivered on a promise of affordable health care for all.

Healthy San Francisco isn't a solution bound only to San Francisco, however. It certainly could be replicated elsewhere. In all of California, and in most areas in the United States, counties bear the legal and financial responsibility for providing medical care to low-income uninsured residents. Some other counties already have programs similar to, though not as broad or as deep as, Healthy San Francisco.

For example, Contra Costa County's Basic Health Care program and San Mateo County's Access and Care for Everyone program each provide the same guarantee of affordable health care through an organized network of local providers and participant assistance services, and each served as a model for Healthy San Francisco. But neither program reaches people earning more than 200 percent of the federal poverty level (the federal standard of poverty was a yearly income of $22,050 for a family of four in 2009), thereby excluding tens of thousands of higher-income uninsured residents.

Similarly, Howard County in Maryland has launched Healthy Howard Access Plan, offering affordable care to residents by local providers. But it, too, is limited to very low-income residents. By contrast, Healthy San Francisco is available to uninsured San Franciscans with incomes up to five times the federal poverty level, or $110,250 for a family of four, which includes the vast majority of uninsured residents.

The innovative leap in San Francisco was the decision to institute an employer mandate to both shore up the employer-based health insurance system and provide funding for health care for those workers whose employers do not provide insurance. This leap was not an intellectual one, but a policy decision. Whether other jurisdictions will make the same policy choice is up in the air, though if federal health insurance reform that covers most uninsured Americans passes, the need to do so may disappear.

In that regard, I am convinced that Healthy San Francisco played a role in pushing national reform. By creating the Healthy San Francisco program and the employer mandate, San Francisco served notice on state and national political and business leaders that if they do not do something to resolve the ever-worsening health insurance situation in this country, cities and counties around the country may take matters into their own hands.