Let It Bleed

The city is awash in red ink, thanks to billion-dollar benefit giveaways and our politicians' lack of will.

At the city's Health Service System, director Catherine Dodd has an ambitious plan to reduce San Francisco's health care costs by keeping employees healthy and fit. The city is providing Weight Watchers classes, exercise opportunities, and healthier food choices — and looking for opportunities to do more. That's why she has concerns about Prop. B. Making insurance more expensive means employees will use less of it, which can cost the city more in the long run.

Dodd is also trying to use San Francisco's clout as a major customer to force industry reforms that could save big money down the line. Health care providers now must meet the city's criteria for effectiveness and follow-through or fork over millions in penalties.

Clever — but, again, these are strategies that could take decades to see real savings. No one knows how to even start chipping away at the health system's $4 billion unfunded liability.

Other ideas are just too politically unpalatable. Elsbernd says he'd like to see the amount employees pay for their benefits indexed to the amount San Francisco pays — so that when one goes up, both go up. That way, unions would have to pay for every increased benefit they ask for, and would reap rewards if they save the city money.

But even if these programs help, they'll help only so much. The key to understanding San Francisco's fiscal future is this: For decades, when San Francisco had money to save, it was too busy spending it. Instead of preparing for the enormous cost of its workers' benefits, it paid for popular programs. That's no longer an option.

San Francisco can either bring its benefits into line, substantially raise taxes and fees to maintain the status quo, or severely cut services and employees. Or it can do all of the above.

San Francisco's benefits system is protected by the city charter, and is sustainable. The city, as we know it, isn't.

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