Earlier this month, more than a dozen local business leaders sat listening to Democratic Rep. Xavier Becerra as he talked about and took questions on the Obama administration’s health care reform.

While town hall meetings have been held around the country with the public and have gotten a good deal of attention, legislators also have been quietly holding similar meetings with business groups.

And while the business version of the town hall meetings such as the one in a conference room in Becerra’s L.A. office have not been as spirited as some of the public ones, lawmakers are still getting an earful.

For example, Tracy Rafter, who is president of the Los Angeles County Business Federation or BizFed, a coalition of chambers and business groups, and who attended the meeting, said after the event: “The nation spends more on health care than anyone else, and yet the quality is questionable at times and not everyone is covered. But business is already putting $500 billion into the market, and one part of society meaning employers can’t bear all the burden.”

Other such meetings are coming up.

Rep. Lucille Roybal-Allard, D-Los Angeles, on Wednesday will visit the Health Care Committee of the Los Angeles Area Chamber of Commerce, which is deeply concerned about the potentially higher costs for businesses. The next day, Rep. Henry Waxman, D-Los Angeles, is set to appear at a West Los Angeles Chamber of Commerce luncheon to reassure members that their concerns will be taken into account.

And Rep. Jane Harman, D-El Segundo, a senior member of the House Energy & Commerce Committee, which has a say on parts of the Democrats’ legislative package, has plans to tour a hospital in her district.

Cristina Galstian, founder and president of Renta-CEO Inc., a Glendale company that places temporary executives around the country, has been a regular participant at task forces and committees on the topic at chambers and other business groups from the San Fernando Valley to downtown Los Angeles.

“Our health care system seems beyond reform, but something has to be done,” Galstian said. “And since whatever comes out of this process is likely to continue to be employer based, we need to have a seat at the table.”

Becerra’s Aug. 11 meeting with Biz Fed was one of several small group meetings and neighborhood coffees he held on health care reform during his trip back to his 31st District, which includes portions of Koreatown and East Los Angeles.

He supports giving Americans as many plan options as possible including a government-run public plan on the premise that the competition will drive down costs, benefitting employers already offering coverage to their workers.

“It would be hard to call it reform if the employers who have been doing right by their employees all along end up having to pay more,” he said. “This should be a reform that lowers the costs for those employers.”

Big debate

The proposals being debated in Congress contain many elements of the California health reform plan that failed last year due to the budget crisis, and an existing Massachusetts program.

The federal government would establish a minimum package of health insurance benefits. All but the smallest employers would be mandated to either provide coverage or pay a tax. Individuals, even if they are young and healthy, would be required to have or buy insurance. Commercial insurers would be required to offer insurance even to those with chronic, pre-existing conditions. Government programs such as Medicaid would be expanded.

Cost savings and improvements to care would come from lower drug reimbursements and provider payments, greater use of health information technology, more funding for preventative care and better management of chronic diseases.

The biggest debate nationally has been over the administration’s proposal to limit coverage of some high-cost, low-outcome medical procedures (the element that has drawn claims by critics that the government will set up “death panels”) as well as a proposal to create a publicly funded health insurer that would compete against private insurers.

The administration sees the publicly funded health option as a way to hold down insurer profits given that the reform mandates people buy insurance. As might be expected, insurers dislike the proposal.

“We don’t think a public plan is the best way to control costs,” said Adrienne Morrell, vice president for government relations for Health Net Inc. of Woodland Hills. “If you don’t have a stable funding of public programs, which we don’t believe there is now, then you have this cost shift to the private sector.”

But for the local business community, a larger concern seems to be that the goal of the reform to expand coverage to some 50 million uninsured Americans; that could leave businesses paying for much of the new coverage, whether they offer it directly or through new taxes to subsidize individual coverage.

“Who pays that additional trillion dollars for this program that the Congressional Budget Office is talking about?” said Gary Toebben, executive director of the Los Angeles Area Chamber of Commerce, which has been organizing its membership to lobby Congress. “Most of our members provide insurance for their employees and there is concern that when it’s all over they’ll end up paying more to cover other people, too.”

The concern of the larger business community is somewhat at odds with the hospital industry, which by most accounts now bears the brunt of providing care for patients without commercial coverage who don’t qualify for Medicaid, Medicare or other existing public programs.

Reform dead?

Roughly 14 Los Angeles County hospitals have closed in the past decade, and others have declared bankruptcy, largely due to low insurance reimbursement rates and the high cost of providing care to the uninsured.

“We desperately need expanded coverage in California and we’re concerned that all the extremist responses could knock the train off the track,” said Jim Lott, executive vice president for health care policy development at the Hospital Association of Southern California, the industry’s regional trade group.

Former health insurance broker Jeff Miles, a national health care analyst and president of the Miles Organization in Marina del Rey, which develops employee benefit plans, believes that the effort for broad reform may be already dead.

He said the current debate has fallen victim to many of the same fears about high costs and loss of choice that killed President Clinton’s reform proposals in the ’90s. He said the Obama administration may end up with reform that simply toughens regulations on insurers.

“The Democrats will push through what they can push through,” he said. “If the (administration) can get some changes in the individual-plan business the insurers that everyone hates because they turn people down, they retroactively rescind, they cancel blocks of coverage all at once then they may settle for that, and call it a great victory.”