As President Obama’s $215 million “Precision Medicine Initiative” show, politicians like to wrap spending in the white coat of medical science. Before legislators comply, they should consider the results of a $13.2 billion California measure intended as a model for the nation.
In 2004, California Senate boss Darrell Steinberg, a Sacramento Democrat, sponsored Proposition 63, the Mental Health Services Act. Backers claimed the measure would get homeless people off the street and keep people out of the hospital and prison. Promoters said it would even help people make the move from tax user to taxpayer.
Voters duly passed the measure, which imposed a tax of one percent on millionaires. In the next decade, Proposition 63 raised a whopping $13.2 billion, and Darrell Steinberg was recommending that President Obama adopt it as a model for the nation.
Steinberg recently told reporters the measure was making “profound and positive change in the mental health system” with “tens of thousands of people whose lives are transformed because of the services under the act.” A rather different picture emerged from California’s Little Hoover Commission, a state watchdog agency.
At the outset of a new Commission report, “Promises Yet to Keep: A Decade of the Mental Health Services Act,” chairman Pedro Nava explains that it is “difficult, if not impossible, to analyze the measure’s effect.” This should not have come as a surprise.
By 2013, taxes from the Mental Health Services Act had brought in $8 billion, but California’s state auditor could not account for how the money was spent. Steinberg’s hometown Sacramento Bee wondered if the money had been “shoved down a rat hole.” The Bee noted “questionable” uses of the money “such as yoga, horseback riding, gardening, the purchase of iPads,” along with “a slick public relations video.”
According to the San Jose Mercury News, in 2013 California had fewer psychiatric hospital beds, fewer doctors treating patients, and fewer clinics across the state. And by their count, in the previous year 750,000 Californians failed to receive the mental health treatment they needed.
And now a state watchdog tells taxpayers that it is difficult, if not impossible, to assess the measure’s results. So where did the $13.2 billion go?
As it happens, Proposition 63 sponsor Darrell Steinberg is a former attorney for the California State Employees Association. Taxpayers may be certain that government employees and well-connected mental health providers made out just fine.
“Promises Yet to Keep” emerges when Darrell Steinberg is conveniently out of office. His mental health act was hardly the first measure in which the negatives consequences outlasted a politician’s career. But in fairness, Proposition 63 is not the only initiative to spend billions and promise more than it can deliver.
In 2004, California’s Republican governor, Arnold Schwarzenegger, supported Proposition 71. This $3 billion measure created the California Institute for Regenerative Medicine (CIRM) and promised life-saving cures and therapies.
Backers even claimed that royalties from the treatments would boost the state economy. More than ten years later, a ballpark figure for the number of promised life-saving cures and therapies is zero. Key supporter Arnold Schwarzenegger is back making movies.
President Obama, meanwhile, touts his “Precision Medicine Initiative” as a measure that will help doctors tailor treatments to individuals. Congress should assess whether the initiative promises more than it can deliver, and whether the possible benefits justify the cost. Consider also whether the primary beneficiaries will be government employees and contractors instead of patients.
In light of California’s experience, legislators should also be wary of negative financial consequences that outlast the president’s career. White-coat syndrome makes politicians feel good about themselves, but it can have long lasting side-effects for taxpayers.
Lloyd Billingsley is a policy fellow with the Oakland based Independent Institute and author of Exceptional Depravity, a new crime book, and Hollywood Party: Stalinist Adventures in the American Movie Industry.
