We flew in a bunch of survivors from the California health wars the other day to share their perspective with Washington policymakers gearing up for possible national health reform next year. As we all know, a carefully crafted bipartisan compromise between the Republican Gov. Arnold Schwarzenegger and the Democratic Assembly passed that chamber by a healthy 46-31 margin last December only to fizzle a month later in the state Senate Health Committee. The seven to one "no" vote was the legislative equivalent of blunt trauma to the head. Yet we were struck by the optimistic tone of our panelists. They built powerful coalitions against difficult odds around an ambitious hybrid public-private health coverage plan. Their ability to bring stakeholders together was an important lesson as we try to prepare bipartisan, cross-sector ground for national reform next year. And instead of retreating to lick their wounds, they are thinking about how to keep cooperating in the future. One possible target: the much-publicized "rescissions" in which insurers have retroactively cancelled policies after an insured person gets sick and starts costing them money.
It's important to remember that California had an uphill struggle. The state has a very high rate of uninsured -- nearly 20 percent versus the 16 percent national rate; almost seven million of the 47 million uninsured in the United States are in California. It has many immigrants, both legal and illegal. Dating back to the property tax revolt of the late 1970s, it has strict constraints on raising revenue—and Republican lawmakers who loathe raising it. And like any state it can only go so far in constraining health care costs and financing reforms without a consistent national policy. Throw in a split labor movement, a $14-billion state budget deficit, and a strong contingent in Sacramento in favor of a single-payer health system. Stalemate wasn't inevitable, but it wasn't a total surprise either.

As Richard Figueroa (Schwarzenegger's well-liked health adviser universally known as "Fig") and the participants at our Capitol Hill forum stressed, Schwarzenegger and his Democratic allies actually accomplished a great deal. They exercised strong and committed leadership. As Consumer Union's Betsy Imholz noted, they built from scratch in one year a broad coalition of business, consumer, health care providers and some key labor groups. Kaiser Permanente's Patricia Lynch pointed out that most insurers bought in—as did hospitals, even though that meant accepting a new tax. Foundations, according to Crystal Hayling, President of the Blue Shield of California Foundation, coordinated their research and message instead of squabbling about "my health wonk is smarter than your health wonk." In short, the coalition was broader and arguably deeper than anything the Democrats assembled during the Clinton-era reform efforts in the early 1990s. And, according to a Field poll, two-thirds of Californians liked what they saw. (For a more detailed analysis, see the New America Foundation's "Lessons from California's Health Reform Efforts for the National Debate").

In a sea of reform advocates, Mike Shaw of the California NFIB (National Federation of Independent Businesses, the small business lobby) bravely defended opposing Schwarzenegger's compromise bill. To the small business in California, Shaw said, mandates equal Armageddon—the Bruce Willis 1998 nuke-the-asteroid movie version, not the Biblical account. Small businesses want health care fixed but they didn't want to be obligated to "pay-or-play"—either help finance state programs or provide insurance to their workers. Even the whittled down proposed 4 percent of payroll contribution was unacceptable. However that's the California NFIB. The national NFIB has so far struck a more conciliatory tone about eventual national reform, laying out principles and dialoguing with some surprising partners. The organization plans this Wednesday to "announce its plans to embark on a nationwide campaign to engage policymakers, legislators and the next administration on this critical issue." We're looking forward to hearing what they have to say.

To view a video and transcript of this event, please visit the Kaiser Family Foundation website.