Healthy San Francisco Has Increased Access, Reduced Utilization

Kevin Westlye, the association's executive director, says that already many restaurants are having to limit their hours or days of operation and letting go paid staff not just because of the economic downturn, but because of the expense of this ordinance.

One way to look at it, Westlye explains, is that an employer with 100 workers, half full-time and half part-time, would be spending $100,000 on health insurance plans for their employees before the ordinance. Today, he says, "that same restaurant is spending $250,000. And that's on a payroll of $2 million. We just don't think this is affordable."

For many of the younger workers in the food service industry, he says, a Kaiser plan can be purchased for $250 with dental and vision. Under the city's ordinance, businesses and their employees are spending a total of $450.

Westlye says until the case is heard or rejected, restaurants will continue to uphold the law, but he worries that some restaurants may leave the city or be forced to reduce their quality.

City officials are cautious despite early successes

Outlined in that March 17 report are some apparent successes. The average number of health visits went down between the first year and the first six months of the second year on an annualized basis. So did the number of surgeries, need for radiology, average number of prescriptions filled, hospital admissions, number of hospitalization days, and average lengths of stay.  Emergency department visits also declined. Visits for urgent, mental health, and substance abuse treatment reduced as well.

City officials are cautious, however.

"Any changes in utilization or costs that are observed are most likely due to how participants were enrolled in the program (in this case, at the point of service)," the program's administrators said in the March 17 report. "Changes in health seeking behavior (emergency department utilization) due to system changes take time, perhaps two to three years to observe."

While most of the enrollees are the neediest, earning below 100% of the federal poverty level, the maximum annual earning for eligibility has been expanded over the two years, from 100% of the federal poverty level, to 300% and now 500%.

One of the early fears was that so many patients who had long deferred healthcare would suddenly become eligible and swarm the clinics. So far that hasn't happened, says Tangerine Brigham, director of San Francisco's Health Access Program. Of the 30 clinics, only five are no longer accepting new patients.

Other clinics have been expanded, and wait times have been dramatically reduced, she says.

Another stumbling block that has proved challenging is the requirement that patients renew their standing as participants each year, something many have neglected to do, Brigham said. "We're implementing a number of strategies to get people to renew their eligibility on time so there's no break in their coverage," she said.

As far as whether the San Francisco plan can be adopted nationally, one concern is that employers will cut workers' hours to part-time to avoid having to pay health insurance costs. San Francisco's plan, however, requires employers to pay a rate for all employees, part-time or full-time.

"This is a real strength in avoiding any perverse incentives for firms to lower hours of work to avoid the requirement," said Jacobs. "Not having such a requirement was a notable flaw in the original Senate Finance Committee options paper. The House bill prorates the requirement for part-time workers."

Follow Cheryl Clark on Twitter.