State and local governments are stakeholders in health care reform.

• Author: Esser, Jeffrey L.
• Position: Editorial

It is not about winners and losers. Improving health care delivery is a daily concern for many residents of the United States and a major financial commitment for states and localities. Last year in their capacity as health care financiers, state and local governments spent $110 billion--approximately 10 percent of all national spending on health care--to provide coverage to employees and indigent populations, an expenditure that was split almost evenly between the two groups. This level of financial commitment makes states and localities stakeholders in the outcome both on a parochial basis and as participants in shaping good government policy.

The many health care proposals before Congress, although differing in major respects, all strive to expand access to health care coverage at affordable rates. Attainment of that goal could benefit state and local governments through a reduction in cost shifting and a lowering of critical care costs. The high rate of health care coverage for public employees--nine out of 10 workers--speaks volumes about the state and local government sector's commitment to the well-being of its employees. Universal coverage has the potential for cost savings for all employers who presently provide coverage; it would mean that the cost of uncompensated care would no longer be shifted to the insured, and individuals would be less reliant on expensive critical care services because of improved access to lower-cost preventive care. Moreover, global cost containment measures may slow the overall increase in medical costs. This would free up money for governments to provide other public goods and services.

What Is at Stake?

Restructuring one-seventh of the nation's economy is no easy task and certainly one that will affect the finances of states and localities. Recognizing this connection, the GFOA surveyed its membership last year to assess their current health care practices. From the more than 1,000 responses, we know that many governments self-insure, purchase health care through cooperatives or pools, and have incorporated managed care arrangements into their benefit programs (Government Finance Review, "Profiling GFOA," October 1993). This has helped the GFOA to map out the elements that should be contained in a national reform package if it is to enhance existing state and local government initiatives and policies.

GFOA is working with other national groups representing state and local government officials...