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Court rules that Medi-Cal cut to hospitals was illegal

 

A federal appeals court has ruled that the federal government erred in approving  California’s request to temporarily cut Medi-Cal (the state’s Medicaid program) reimbursement for hospital outpatient care by 10 percent during the  Great Recession.

The ruling by a three-judge panel of the U.S. 9th Circuit Court of Appeals said the Feds can approve such cuts only if evidence shows that the aid  recipients  will  continue to have access to the same services as the general population.

California imposed the cutback  from July 2008 through February 2009.

Robert Leventhal, a lawyer who represented more than 50 hospitals in the case, told the Los Angeles Times that if the ruling stands, the state and  federal governments will have to pay back California hospitals hundreds of millions of dollars.

To read more, please hit this link.


Looking for middle ground on the ACA debate

By EMILY LAZAR

For Kaiser Health News

Joel Hay, a professor at the University of Southern California, describes his political views as “conservative, free market.” But in a counterintuitive twist, his proposal to fix the Affordable Care Act would expand the largest source of public health coverage in the country: Medicaid.

Hay, who specializes in health policy and economics, envisions an Obamacare replacement plan that would scrap health insurance exchanges such as Covered California, which sell subsidized private market plans.

Instead, he would allow people under the age of 65 to buy into Medicaid, called Medi-Cal in California. Their premiums would be based on family income and a surcharge would be assessed on those who are uninsured at the time they apply. That would be intended as an incentive to keep them from buying insurance only when they’re sick. People could acquire coverage regardless of preexisting conditions.\

Under Obamacare, 31 states and the District of Columbia expanded Medicaid, the federal-state health care program for people with low incomes. In doing so, they added more than 11 million people to the rolls, including about 3.7 million in California.

Hay believes that the Medicaid expansion was the most successful part of the ACA and contends that the health insurance exchanges have struggled to provide affordable plans with adequate networks in many states.

He said expanding Medicaid further could achieve two important goals: slowing the growing costs of health care, which he said is better achieved by Medicaid than private market plans, and giving all Americans access to at least basic health coverage.

Scrapping the exchanges may not be an easy sell in the Golden State, where Covered California has been lauded as a national model.

Laurel Lucia, director of the health care program at the University of California at Berkeley Center for Labor Research and Education, agrees with Hay that the Medicaid expansion has been a success, but she wonders whether middle class consumers will enroll in Medicaid as readily as private market plans.

California Healthline recently interviewed Hay about his proposal, and Lucia for a contrasting point of view. Their comments, below, have been edited for clarity and length.


 

Joel Hay proposes scrapping the Obamacare exchanges and building on the expansion of Medicaid instead. (Courtesy of Joel Hay)

Q: Can you provide an overview of your Obamacare replacement plan?

It would build on the successful part of the Affordable Care Act, namely the Medicaid expansion that is responsible for the majority of the increased coverage.

This is how it would work: Below some family income threshold that would be yet to be determined, the cost of getting Medicaid would be zero. Above that, there would be premiums based on family income up to some maximum threshold, where the cost would be something like 10 percent of family income.

People would always have an option of opting out into a private plan if one is available to them. But this is a backup for anybody that doesn’t have other options.

This plan focuses on the two biggest problems in American health care. No. 1: Not everyone has health insurance. No. 2: We have the highest health care costs in the world.

Medicaid is a no-frills health plan available in all states. It’s not perfect, but it works. There are certainly access problems, but it seems to do a much better job, even in some of these rural areas where we’re seeing problems with the health insurance exchanges.

Q: In some states, such as California, the exchanges seem to be working reasonably well. Why lump all exchanges in one basket?

There’s a philosophical issue here. Is competition across health plans the best way to get affordable, basic care to everyone?

Among the majority of people that are reasonably well-educated, middle class or better, have good jobs and in fact maybe get their insurance through their jobs, the competition between insurance plans works reasonably well. But when you go further down the income scale, that’s where the competition doesn’t seem to work.

The Obamacare experience thus far backs that up. A lot of people just don’t seem to be able to get a good plan either because the premiums are skyrocketing or because the narrowing of the coverage options they have is prohibitive.

Q: Would your plan require everyone to have health insurance?

There is no mandatory requirement for having health insurance, but there are penalties if you go without coverage. If you don’t sign up during open enrollment, the only option you can get outside of that window would be this Medicaid option. The longer you delayed getting into it, the higher your monthly premiums would be.

Q: Would subsidized health plans still be offered through exchanges?

No. The subsidies to help people buy into Medicaid should be targeted to making sure everybody has access to essential care. The subsidies would be focused on helping low-income people get into a no-frills Medicaid health plan. The subsidies will phase out at some upper income level.

If you’re earning $96,000 for a family of four, hopefully the private market will generate options for you. But if you have no other option, this would be available to your family at a premium of 10 percent of your family income. That’s going to work out to be something like $10,000. That’s a lot of money, but that’s the problem we have.

Q: What do you mean when you say “that’s the problem we have”?

We’ve reached the point in this country where the average cost of health care per capita is over $10,000, whereas the median family income is only $54,000. A median family of 2.6 people is going to see over half of their income going to health care.

We have to consider other options. Medicaid is cheaper. It gets the lowest price for drugs by law and negotiates vigorously to get extremely low prices for medical services, hospitalizations, doctors. If you can get your health care through Medicaid, the cost per every unit of service is lower.

Q: Can the already-stressed Medi-Cal program {California’s Medicaid program} handle millions more enrollees?

It’s better than what has been demonstrated in the private health insurance exchanges under Obamacare. In Medicaid, people may have to travel long distances for specialty care, although some of those things can be overcome with telemedicine and other mechanisms. But we’ve seen pretty much a collapse of the private markets to handle people in rural, hard-to-reach places. Yet Medicaid has provided care to people in every state, including in every one of these remote access areas. It’s not perfect. Rural health care access is never going to be perfect.

Q: You have mentioned block grant funding of Medicaid as part of your proposal. That is what Congressional Republicans have been pushing to reduce federal spending on the program. How can you do that and significantly expand Medicaid at the same time?

I certainly wouldn’t want to hang the whole program on whether or not it’s block-granted. The argument in favor of block granting is if you give a certain amount of money per-capita to the states, it’s up to them to allocate the resources efficiently and effectively to provide the highest quality of care. If you continue with the current funding approach for Medicaid, the states have 50 percent or less of the responsibility for how the dollars are spent and so they’re not going to work as effectively to control costs and quality.

Some people on the far right want to actually destroy Medicaid. They think by block granting Medicaid, they can eventually make it go away. That’s not my goal here. My goal is to provide sufficient federal funds to make this thing work.

Q: Have you discussed this idea with any lawmakers?

I’m just beginning. What I see so far is that everybody is so polarized, that there really isn’t any movement in the middle. I’ve presented this to left-wing academics, and they say what they want to do is push through single payer, even if it’s only in California. They’re just not interested in compromise. I’m sure the same would be true of Tea Party Republicans.

No Death Spiral In Obamacare Exchanges

From Laurel Lucia, University of California at Berkeley Center for Labor Research and Education, health care program director

I agree with the conclusion that the Medicaid expansion has been working really well, especially in California. It’s true that Medicaid costs are lower than the costs to cover an equivalent population with private insurance and that Medicaid costs have been growing more slowly than costs in private insurance.

Q: What do you think of Professor Hay’s idea?

But I disagree with the premise that the individual market components of the ACA are failing. In California, the individual market reforms and subsidies have been working very well, and nationally I’d say they’re mostly working.

In California, we’ve had very high enrollment and we still have significant competition in the individual market. The vast majority of Californians have a choice of at least three insurers through Covered California.

Nationally, millions of people have been newly insured as a result of the individual market subsidies under the ACA. And affordability has improved significantly for low- and middle-income people who don’t have job-based coverage and need to rely on the individual market.

Both nationally and in California, I would not say that the individual market is in a death spiral.

Q: Aren’t there places where premiums have skyrocketed and choices have decreased?

There are places in the United States where much more plan choice is needed. We need to build on the Affordable Care Act reforms in the individual market to ensure greater choices and greater competition, rather than starting from scratch.

Q: It doesn’t seem like the current Congressional leadership wants to build on the ACA.

If there’s bipartisan will to make the ACA work better in terms of the individual market, it’s very possible to do with some policy changes. And in some places, like California, it is already working well.

Q: So why not end subsidized private plans and allow people to buy into Medicaid instead?

It’s an interesting idea to expand upon Medicaid. There is a question of whether middle-class consumers would enroll at the same rate in a Medicaid-type plan as they do in private insurance.

The provider networks in Medicaid are often quite different than those in plans offered through Covered California. Some consumers may be less likely to enroll in Medi-Cal if they have a strong attachment to their provider and that provider is not in the Medi-Cal network or isn’t accepting new Medi-Cal patients.

Q: Would middle-class consumers be less likely to sign up for Medicaid because of a perception or stigma that it’s just for poor people?

I just don’t know how Californians or Americans at higher income levels would perceive a new program like this that builds upon Medicaid.

If you were going to expand Medicaid to a broader population, you would want to make sure that it is adequately funded. One part of Professor Hay’s proposal would fund Medicaid through block grants, which would actually do just the opposite.

Most research has indicated that block-grant funding for Medicaid would result in substantial cuts to federal Medicaid spending over time without resulting in better cost efficiency. The loss of federal funding would force states to make difficult decisions like cutting eligibility, cutting benefits or implementing enrollment caps.

Block-grant funding would not only threaten Medicaid coverage for existing enrollees, but it would also be especially harmful if you were considering expanding the Medicaid population at the same time.

Q: What can be done to moderate health care cost growth, if not through Medicaid?

Cost containment is an important next step in federal health policy and state policy as well. Costs are growing too rapidly, not just in the individual market but also in job-based coverage, but those are trends that started well before the ACA.

They’re not due to the ACA. In fact, since the ACA, private insurance premiums have grown at a slower rate.

But we do need more focus on slowing the rate of cost growth. I think a lot of the barrier there is political. There have been a lot of solutions proposed to reduce costs, for example allowing Medicare to negotiate with drug companies on drug prices. And often Congress doesn’t want to take on the drug industry or the hospital industry or other aspects of the health care industry to reduce costs.

 


Reddish parts of blue California depend heavily on Medicaid

 

FRESNO, Calif.

In 2012, when Jerry Goodwin showed up at a clinic with intense pain and swelling in his legs, doctors called for an ambulance even though the hospital was across the street. That generated a $900 bill — just the beginning of a nearly three-year ordeal for Goodwin, who was uninsured.

Diagnosed with cellulitis and an irregular heartbeat, Goodwin managed to get his emergency care costs covered through the hospital but then faced month after month of bills for follow-up care and medications.

Finally, in 2015, he was able to sign up for Medicaid coverage, which was expanded under the Affordable Care Act to cover many single adults without children. “That was a big relief,” said Goodwin, 64.

Now Goodwin and people like him are worried all over again.

Under Republican efforts to repeal, replace or reform the health law, many people on Medicaid — the nation’s single-largest insurer, with 72 million beneficiaries — could see their coverage slashed. The biggest chunk of them — 13.5 million — live in California. The state predicted Wednesday it could lose $24 billion in federal funding annually by 2027under the current GOP proposal.

Among the hardest hit regions would be the Central Valley, the state’s agricultural heartland, stretching hundreds of miles from Redding to Bakersfield. Toward the south, in Fresno County, about half the population of 985,000 relies on Medi-Cal, as California’s Medicaid program is known. In adjacent Tulare County, 55 percent of the more than 466,000 residents were enrolled in Medi-Cal as of January 2016.

Much has been said about the plight of conservative voters in the Midwest who rely on Medicaid, a program the Trump administration and congressional Republicans are determined to shrink. But despite its reputation as a deep-blue state, California also has several red — or reddish — counties in its interior with millions of low-income people who depend heavily on Medicaid. Many live in congressional districts represented by Republicans who want to scrap or change the Affordable Care Act, also known as Obamacare.

J. Luis Bautista, M.D., an internist at Bautista Medical Center in Fresno, Calif., examines farm worker Jose Gonzalez in February. 

The current Republican bill, the American Health Care Act, would cut Medicaid funding by 25 percent by 2026, covering 24 million fewer people than today, according to the nonpartisan Congressional Budget Office.

“These are remarkable estimates,” said John Capitman, the executive director at the Central Valley Health Policy Institute and a professor at California State University, Fresno, referring to the CBO projections. “The level of cuts are devastating, and for California and the Central Valley, this represents a huge loss.”

The bill faces opposition from the left and right and is undergoing last-minute changes in the run-up to a House floor vote Thursday. Despite several protests in the valley and around the state, at least half of Republican lawmakers in the state appear poised to support it; several others are noncommittal.

U.S. Rep. Devin Nunes, whose congressional district includes portions of Tulare and Fresno counties, likes the proposal, saying it will improve care for everyone, including current Medi-Cal participants.

“Medi-Cal is a broken healthcare system that’s been completely mismanaged by the State of California,” Nunes said in a recent statement.

Capitman said Medi-Cal is vital in the Central Valley because of its high poverty rate, uneven access to care and pockets with very poor health outcomes. Many of these communities also depend on the Prevention and Public Health Fund, which was established by the ACA to fight chronic diseases and also is in peril, he said.

The valley suffers high rates of diabetes, obesity and heart disease. The area has some of the country’s dirtiest air, triggering epidemic levels of asthma. Wage stagnation and high unemployment contribute to stress and poor mental health.

Some areas are far better off than others. Within 10 miles, Capitman said, you can find up to a 20-year difference in life expectancy. On average, life is much shorter for residents in Southwest Fresno, for instance, where heavy industry soils the air, homeless people camp on sidewalks, and fences cage in lots overgrown with grass and weeds.

Not far away, Petra Martinez, a former fieldworker, recently waited to see a doctor at a crowded downtown clinic. At 86, she receives coverage from both Medi-Cal and Medicare, the federal insurance program for the elderly. She needs medication for arthritis, epilepsy and diabetes, all of which is paid for her through her dual coverage.

Though the proposed House bill seemingly would not shrink spending on people with dual coverage, she is wary of what lies down the road.

“I’d like to think that we [seniors] will be OK, that maybe we won’t be affected by whatever changes are coming, but who knows?” Martinez said. “I don’t want to have to ask my children for money to go to the doctor.”

Dr. J. Luis Bautista, M.D., an internist at the clinic, estimates he’s seen a 20 percent increase in patient visits since the rollout of the ACA in 2014. The majority of his patients are on Medi-Cal.

“These are the people who usually wait until they’re very sick to come,” Bautista said. “We’ve seen people with high blood pressure who come in when they already have eye problems and heart problems. … They waited too long.”

But since the ACA rolled out, he said, preventive visits seem to have increased.

Dr. Bautista examines Kathy Macias, 53, while her mother, Connie Hernandez, 72, waits to be seen last month.

Fifteen miles outside the city of Fresno is Sanger, a largely Latino town of 25,000 where almost a quarter of residents live in poverty, according to the U.S. Census.

Here a neighborhood of newer houses with commuter residents isn’t far from another that lacks sidewalks and is strewn with aging or abandoned businesses and chain stores.

On a recent day, a hairstylist was tending to a client in a downtown salon nestled among boutiques, cafes and other small businesses. The stylist said she and her two teenagers are on Medi-Cal — and so are most of the people she knows. A single mother, she said she works six days a week but can’t afford to buy health coverage.

The salon’s owner interjected that she doesn’t oppose greater restrictions on who gets Medi-Cal — but plans on the state’s insurance exchange should be more affordable, so people will be drawn to buying coverage.

The women asked that they and the business not be identified.

Less than an hour southeast of Fresno, Iliana Troncoza lives in the city of Tulare, part of a heavily agricultural county of the same name. The county has one of the lowest incomes per capita in California.

Troncoza, a 47-year-old homemaker who takes care of her ailing husband, gets her health care at Altura Centers for Health, which runs seven clinics in the city. The thought of Medi-Cal cutbacks fills her with anxiety. Both she and her daughter, a college freshman, rely on the program for coverage.

Iliana Troncoza, 47, of Tulare, Calif., said she had gone without health coverage for six years before qualifying for Medi-Cal under the expansion.

Troncoza had gone without coverage for six years before qualifying under the ACA expansion. She traveled to Jalisco, Mexico, to remove a breast cyst because couldn’t afford the procedure in the U.S. Now, in her city, she can receive mammograms and ultrasounds, and has been able to obtain medication for her depression and anxiety, she said.

“It’s horrible to think that our Medi-Cal depends on people who don’t understand our situation,” Troncoza said.

Graciela Soto, CEO of Altura clinic system, said 75 percent of its patients are on Medi-Cal and 9 percent of patients are uninsured, mostly because of their immigration status. It’s quite a difference from 2012, before the ACA was implemented, when 50 percent of patients were on Medi-Cal and 35 percent uninsured, she said.

“The Medicaid expansion was wonderful for our patients,” Soto said.

Through the ACA, Soto said, many young women were able to access free or affordable birth control. That’s important, she said, because Tulare County has among the highest teen pregnancy rates in the state.

The region has a large population of migrant farm workers, many of whom don’t qualify for Medi-Cal. But a substantial portion of Latinos do qualify, as do non-Hispanic whites like Goodwin.

Among whites, the need for mental health and substance abuse services is growing, research suggests. Drug overdoses, alcohol abuse and suicide have significantly contributed to rising death rates, according to a study out of the Center on Society and Health at Virginia Commonwealth University.

In Fresno County, for example, the rate at which middle-aged white adults are dying from accidental drug poisoning has tripled since 1990, according to the report.

Some residents have turned to activism in their efforts to preserve ACA coverage. In January, Greg Gomez, a councilman for the city of Farmersville in Tulare County, led a small-scale protest outside Nunes’s office in Visalia.

It wasn’t just about politics — it was personal. Three of Gomez’s children are covered by Medi-Cal.

“The monthly premium to get my whole family covered by my employer would be about $2,000,” said Gomez, a computer systems engineer for Tulare County and former president for the local chapter of the Service Employees International Union. “That is totally out of reach. That’s why we need Medi-Cal. And that’s the story of a lot of Tulare residents.”

 


Bill filed to create Calif. single-payer system

By ANNA GORMAN

For Kaiser Heath News

 

Legislation introduced in the California Senate last week would set the state on a path toward the possible creation of a single-payer healthcare system ― a proposal that has failed to gain traction here in the past.

The bill, which is a preliminary step, says that it is the “intent of the Legislature” to enact a law that would establish a comprehensive, single-payer health care program for the benefit of everyone in the state. The legislation, introduced by state Sen. Ricardo Lara (D.-Bell Gardens), does not offer specifics of what the plan would look like, nor does it mention a timetable.

A single-payer system would replace private insurance with a government plan that pays for coverage for everyone. Proponents argue that single-payer systems make healthcare more affordable and efficient, but opponents say they raise taxpayer costs and give government too much power.

Medicare, the federallyfunded health coverage for the elderly, is often held up as a model of what a single-payer system might look like.

Lara said in an interview late last week that the state needs to be prepared in case the Affordable Care Act is repealed, as President Trump and congressional Republicans have promised.

“The health of Californians is really at stake here and is at risk with what is being threatened in Congress,” Lara said, as the debate continued in Washington about the future of President Obama’s signature health law. “We don’t have the luxury to wait and see what they are going to do and what the plan is,”

Lara noted that while the Affordable Care Act expanded health coverage for many Californians, it left others uninsured or underinsured. He said the single-payer bill builds upon his “health for all kids” legislation, which resulted in coverage beginning last May for 170,000 immigrant children here illegally.

“I’ve met many children who have asked me point blank, ‘What about my mom? What about my dad?’” Lara said.

He recently withdrew a request to the federal government, based on a bill he had introduced, that would have let  illegal adult immigrants buy unsubsidized health plans through Covered California, the state’s insurance exchange.
No state has a single-payer health system. Perhaps the best-known effort to create one was in Vermont, but it failed in 2014 after the state couldn’t figure out how to finance it. Last year, Colorado residents rejected a ballot measure that would have used payroll taxes to fund a near universal coverage system.  According to the text of the Lara’s bill, a single-payer system would help address rising out-of-pocket costs and shrinking networks of doctors.

In California, voters rejected a ballot initiative in 1994 that would have established a government-run universal health program. Gov. Arnold Schwarzenegger later vetoed two bills that would have accomplished the same goal.

It’s difficult to create consensus on single-payer plans because they dramatically shift how health care is delivered and paid for, said Larry Levitt, a senior vice president at the Kaiser Family Foundation (California Healthline is produced by Kaiser Health News, an editorially independent program of the foundation.)

“Single-payer plans have lots of appeal in their simplicity and ability to control costs,” Levitt said. “But what I think has always held back a move to single-payer is the disruption they create in financing and delivery of care.”

The problem, Levitt said, is that even if they end up costing less overall, single-payer plans look to the public like a “very big tax increase.”

The California Nurses Association, the primary sponsor of the new bill, is planning a rally in Sacramento this week in support of a single-payer system. Bonnie Castillo, the group’s associate executive director, said the goal is to create a system that doesn’t exclude anyone and helps relieve patients’ financial burdens.

“Patients and their families are suffering as a result of having very high co-pay and premium costs,” she said. “They are having to make gut-wrenching decisions whether they go to the doctor or they stick it out and see if they get better on their own.”

Castillo said that with so much uncertainty at the national level, California has the ability to create a better system. “We think we can get this right,” she said.

Charles Bacchi, president and CEO of the California Association of Health Plans, said he hadn’t yet seen the bill, but the trade group has opposed single-payer proposals in the past.

“It’s hard to tell until you know the details,” Bacchi said. “But past studies have shown [single-payer systems] are incredibly expensive and would be disruptive.”

He said health plans, doctors, hospitals and others are “laser-focused on protecting and enhancing the gains we have made in coverage” under the Affordable Care Act and ensuring that California continues to receive critical funding. “We think that’s where the focus should be,” he said.

One possible concept of a single-payer system in California would be to bring together funding from several sources under one state umbrella: Medi-Cal, which covers the poor; Medicare, the federal program that covers older adults, and private insurance.

Lara said he has not yet figured out the financing, saying that it is still early in the legislative process. But he said that even as California continues to defend the Affordable Care Act, it is time to put forward an alternative.

“I think we’ve reached a tipping point now that we haven’t had before,” he said.

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.


2 GOP senators propose letting individual states keep versions of the ACA

By CHAD TERHUNE

and PAULINE BARTOLONE

For Kaiser Health News

In a sign of how much easier it was to complain about the Affordable Care Act than to deal with angry patients who would lose their coverage if the Republicans repeal it,  two GOP senators have proposed letting states  keep their federally funded ACA insurance exchange with ACA consumer protections intact.

Senators Bill Cassidy, R-La., and Susan Collins, R-Maine, said their proposed legislation would allow states that embraced the Affordable Care Act to keep operating under many of the current federal rules.

Another option is for states to pursue a less regulated alternative to the ACA under the Patient Freedom Act. Or they could reject federal dollars completely in favor of a new state solution for health coverage.

“We give states the option,” Cassidy said at press conference Monday. “California and New York — you love Obamacare, you can keep it.”

Some health-law supporters say that the Cassidy-Collins proposal, one of several in the GOP-controlled Congress, could represent a lifeline for states such as California that have invested heavily in expanding coverage under the Affordable Care Act.

But many Democrats at the state and national level criticized the plan as potentially harmful to millions of Americans who rely on the health law because it does not promise sufficient funding and consumer protections.

“It provides a somewhat illusory option to stay in the ACA without the guarantee of federal assistance necessary to allow states to maintain the level of coverage they are currently providing,” California Insurance Commissioner Dave Jones, an elected Democrat, said in an interview.

The Golden State fully implemented the health law by expanding Medicaid coverage to millions of low-income people and creating its own insurance exchange, which ultimately covered 1.3 million enrollees. Supporters have held California up as proof that the health law can work as intended — and as a counterpoint to Republican contentions that Obamacare is collapsing nationally.

Cassidy said his legislation promotes the Republican doctrine of states’ rights while avoiding the one-size-fits-all approach from Washington.

Collins echoed that sentiment, saying she favors letting states that had success with the health law maintain the status quo. She described it as “reimplementation of the ACA” in those states.

“If a state chooses to remain covered by the ACA, exchange policies will continue to be eligible for cost-sharing subsidies and advance premium tax credits,” Collins said in a speech on the Senate floor Monday. “The insurance market will still be subject to ACA requirements, and the individual mandate and employer mandate will also remain in place in that state.”

Cassidy and Collins acknowledged that details of their bill haven’t been worked out, nor is it clear how it will mesh with other proposals. Competing plans in Congress don’t envision these state options, and it’s unclear what approach President Trump and his nascent administration will take in crafting a replacement plan.

Still, some industry experts and analysts say the Cassidy-Collins proposal is intriguing.

“The advantage to a state like California is we could protect what we have accomplished already,” said Howard Kahn, former chief executive of L.A. Care Health Plan, an insurer on the Covered California exchange. The large managed-care plan serves patients in Medi-Cal, the state’s Medicaid program.

“Cassidy’s proposal could work for California better than other alternatives in the short term. The question is whether they maintain federal funding for the longer term,” Kahn said. “My feeling is you do have to engage with the rational Republicans who are trying to find something that doesn’t tear it all apart.”

Some key state lawmakers are more skeptical. “I’ll be surprised if it really happens,” said state Sen. Ed Hernandez, D-West Covina, chairman of the Senate Health Committee. “This is just one of many proposals.”

State Sen. Richard Pan, D-Sacramento, a pediatrician and former Assembly Health Committee chairman, said he was relieved to hear of a Republican proposal that backs federal subsidies, but was concerned about potential loss of funding at current levels. “It looks good on the surface” Pan said, but it’s important “to look at the details.”

Pan also said, however, that the bill could further the fragmentation of the health-care system if some states keep Obamacare while others do not.

Covered California officials may weigh in on this Republican proposal and others at a board meeting Thursday. Executive Director Peter Lee didn’t respond to a request for comment Monday. After the November election, Lee emphasized that Covered California can show policymakers in Washington how to build a competitive insurance market.

California went beyond what other exchanges did. It chose to actively negotiate rates with insurers and didn’t allow every company to sell in its marketplace. It also simplified consumer shopping by requiring insurers to have standard copays and deductibles for each level of coverage.

Those moves pushed health insurers to compete more directly on price, and annual rate increases were a modest 4 percent in the first two years. Covered California’s rates are rising 13.2 percent, on average, this year. Still, that’s better than the 22 percent average rate hike in exchanges nationwide.

Walter Zelman, chairman of the public health department at California State University, Los Angeles, said it will be interesting to see whether state leaders try to negotiate with Republicans in Washington over funding levels.

“It’s not that Republicans don’t want people to have health insurance. They just don’t want to pay for it,” Zelman said. “It would be good for California to keep what it has and it would be much less disruption.”

Federal funding is a key issue for states. In a summary of the bill posted by Collins, it said states choosing to retain Obamacare or pick the Republican alternative could receive “funding equal to 95% of federal premium tax credits and cost-sharing subsidies, as well as the federal match for Medicaid expansion.”

Dylan Roby, an assistant professor at the University of Maryland School of Public Health, said “California would still have to absorb a 5 percent cut, at least, in the premium tax credits and cost-sharing subsidies.”

Republicans will need 60 votes in the U.S. Senate to pass a full replacement for the Affordable Care Act. At his press briefing Monday, Cassidy said his compromise approach is designed to win over some Democrats and reach that 60-vote majority.

In her speech on the Senate floor, Collins said children could still stay on their parents’ health plans until they are 26. There would be no discrimination against preexisting conditions and no caps on annual or lifetime coverage, she said.

Other key features of the legislation include a provision allowing states to automatically enroll eligible people in health plans unless they opt out. The plan also promotes health savings accounts and price transparency requiring hospitals and other providers to disclose costs so consumers can shop around for the best price.


What a ‘public option’ would look like

 

By PAULINE BARTOLONE

For Kaiser Health News

SACRAMENTO

The “public option,” which stoked fierce debate in the run-up to the Affordable Care Act, is making a comeback — at least among Democratic politicians.

The proposal to create a government-funded health plan, one that might look like Medicare or Medicaid but would be open to everyone, is being advocated by some  federal officials, and gaining traction here in California too.

Amid news that two major insurers were pulling out of Affordable Care Act exchanges, 33 senators recently renewed the call for a public option. The idea was first floated, then rejected, during the drafting of the federal health law, which took effect in 2010.
Dave Jones, the elected regulator of California’s private insurance industry, endorsed the idea of a state-specific public option in an interview last month with California Healthline, though he did not specify how it might work. Democratic presidential candidate Hillary Clinton includes a public option in her campaign platform, and President  Obama urged Congress to revisit the idea in a JAMA article published in August.

A public option “would look just like an insurance plan,” except that the state or federal government would pay for medical care, potentially set up the network of doctors and hospitals, and make rules about paying providers, according to Gerald Kominski, director of the UCLA Center for Health Policy Research. Private industry could be involved in these or other aspects of running the health plan, much as they do in Medicare Advantage and managed Medicaid plans.

California Healthline interviewed Kominski to better understand how a public option could work. The interview was edited for length and clarity.

Q: When we talk about a public option, do we mean a health plan for which the government takes the risk, sets the coverage rules and pays out the claims — and enrollees pay premiums just as they would to an insurance company?

That is what the public option would be. But that still leaves out the answer to a lot of questions about how actually that would occur. How would a government agency essentially become the insurer? So we have two examples. We have the Medicare program and we have the Medicaid program.

Medicare establishes the rules. It contracts with insurance companies to pay the bills. And that’s the way that Medicare has operated for over 50 years.

Now we have Medicare Advantage plans, where the contracting is not to pay bills but is basically contracting with insurers to bundle the services. And rather than pay the doctors and hospitals, the government pays the insurer and puts the insurer at risk.

Q: Insurers have opposed this idea in the past, and they’re opposing it again now that it’s being raised by members of Congress.

Private insurers could participate as administrators or providers on behalf of the state. But here’s one concern that I have with that model: California has four large insurance companies in the exchange that account for about 90 percent of the market.

Let’s say that California wanted to create a public option and hire an insurance company to administer that product for it. What would be the reason or the incentive for any of those companies to agree to be the plan administrator for the public option when the public option would be competing with the product that they’re already offering? They would be competing with themselves.

Q: Some provider groups may be opposed to a public option because they say that government programs like Medi-Cal pay very little and they believe a public option plan would also pay little. Is this necessarily the case that a government program would pay low rates?

It’s not necessarily the case, but it is in fact what we observe in the Medicare and the Medicaid/Medi-Cal programs.

Q: Do you think a public plan would help bring down costs in the healthcare system by negotiating for lower payments to hospitals and doctors?

I think that is possible in other areas of the country, where there are markets with one or two health insurance plans in the exchange. I think California has one of the most competitive ACA marketplaces. And so would the public option in California dramatically reduce premiums? I think the answer is no. It would have little or no effect.

For some people, the advantage is that we think that the public option’s going to be around because the state’s not going to back out of its commitment, whereas private insurers come and go in the marketplace.

Q: Is there something about California’s healthcare system that uniquely primes the state for a public option?

I think so. One of the things that’s unique about California is the high percentage of managed-care enrollment. The public option in California would probably include or be based on a managed-care model and Californians are pretty receptive to that model.

Q: So if the public option could include private insurance, why are the insurers so opposed?

Well, the simple answer is they don’t want more competition. And again it goes back to, why was this battle so intense during the development and enactment of the ACA back in 2009 and 2010? The insurance industry said we cannot compete with a plan, a government plan, that pays doctors and hospitals using Medicare fees or fee schedules.

You remember the fundamental rule of business is you don’t want more competition. You want the market to yourself.
Well, that’s where you can’t ignore the political environment. And so the short answer is in the current political environment, doing something at the national level is extremely difficult. Even though there might be arguments to develop a public option at the national level, it’s very challenging in the current political environment to get the agreement.

Q: Do you think it would be more effective or easier to implement a public option at a state or national level?

Q: Is there something that’s more efficient about a national public option?

Potentially. It’s economies of scale. You know, the larger your potential market nationally, the lower the potential costs per person. You just get administrative savings and efficiency. But it’s not easy to create a national program. One issue that’s challenging is how to put together a national network of doctors and hospitals that would participate. That’s a lot of work.

Q: Do you think the idea of a public option is more viable now than it was when it was debated before and ultimately stripped from the Affordable Care Act?

A: Well, I think that what makes it more attractive right now is the fact that we’ve got large insurance companies pulling out of the exchange marketplaces. And because of that … the idea of a public option to provide stability and protection for people in the exchanges has resurfaced. And I think with good reason.


UC Health system, UnitedHealth to form ACO

 

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By CHAD TERHUNE

For Kaiser Health News

The nation’s largest health insurer and the University of California Health system are joining forces to create a new health plan option for employers and expand research into patient data.

Under the 10-year partnership unveiled Thursday, UnitedHealth Group Inc. and the UC system will form an Accountable Care Organization (ACO) that will be offered to large, self-funded employers statewide. In ACOs, physicians, hospitals and an insurer work together to coordinate care, control spending and share savings.

The for-profit insurer will also open a research lab in the San Francisco area early next year offering researchers at the state-run health system access to a huge national database of patient records.

The collaboration comes as hospital systems and insurers are under increasing pressure from employers, government health programs and their competitors to forge new alliances aimed at improving care and cutting costs. It also reflects the growing importance of data-mining to achieve those goals by identifying disease earlier and finding more effective treatments.

The deal marks UnitedHealth’s continued interest in growing its California business despite its decision in May to leave the state’s health-insurance exchange.

The company’s Optum unit was recently awarded a five-year contract to manage pharmacy benefits for the California Public Employees’ Retirement System, and UnitedHealth is expanding its presence in Medi-Cal, the state’s Medicaid program. The company said it now serves more than 3.5 million Californians.

The UC system runs five academic medical centers — in Los Angeles, San Francisco, San Diego, Irvine and Davis — including hospitals, medical groups, clinics and other outpatient facilities. They will continue to work with other insurers such as Anthem Inc. and Blue Shield of California as network providers and in other ACOs.

But UnitedHealth offered several advantages compared to its rivals in terms of data-mining capabilities and administrative support for hospitals and physician offices through its consulting unit, said David Kraus, chief contracting and clinical strategy officer for the UC Health system.

“What was unique about UnitedHealth is they are more than just a health plan,” Kraus said. “This collaboration helps us advance things quicker.”

Kraus said the university system and UnitedHealth want to learn from the mistakes of earlier ACOs and offer employers a more centralized approach that can tap into real-time data as patients move through the healthcare system.

“A lot of employers have a physical health product unrelated to a mental-health product unrelated to their wellness program, which is completely unrelated to the pharmacy benefit. We think it needs to be all together, and we get to build this ACO from the ground up,” Mr. Kraus said.

The financial terms of the partnership weren’t disclosed. Mr. Kraus said a joint governing board would establish the specific financing for individual projects and determine how much each organization contributes.

“We will look at pilots and talk about which ones to invest in and where,” Kraus said. “It could be 80 percent-20 percent or 60-40. We haven’t boxed ourselves into a preordained structure.”

Steve Valentine, vice president and West Coast consulting leader at the healthcare consultancy Premier Inc., said the deal brings together two highly regarded organizations, but he said that some employers chafe at the high cost of UC facilities.

“UC has to address its whole cost structure,” Valentine said. “They tend to be more expensive so they will need to address pricing to be competitive.”

UnitedHealth is playing catch-up in a crowded market. Anthem, the nation’s second-largest health insurer, has been the dominant player in California for self-funded employers. In that scenario, large employers have the financial resources to pay their own medical claims. They hire an insurer to administer the health plan and create a provider network.

Anthem had a 37 percent share of the 6.4 million Californians covered by the self-funded market in 2014, according to data from the California Health Care Foundation. Cigna Corp. was second with 24 percent market share, followed by UnitedHealth and Blue Shield of California at 13 percent apiece.

HMO giant Kaiser Permanente has a smaller presence in the state’s self-funded market. In the fully insured market for large employers, Kaiser Permanente leads the state with a nearly 50 percent share.

Under the new deal, the insurer will establish an office in the San Francisco area for OptumLabs. UnitedHealth founded OptumLabs, a collaborative research center, with the Mayo Clinic in 2013. The headquarters is in Cambridge, Mass. Other partners, such as AARP, Harvard Medical School and Pfizer later joined the research effort.

OptumLabs said it would provide UC researchers and physicians access to one of the nation’s largest databases of medical claims, although it would not be publicly available and patients’ identities  would not be revealed. It contains claims information on more than 150 million people going back two decades. It also includes electronic medical records on another 50 million patients.

In one research project, OptumLabs has examined whether scanning the narrative portion of electronic medical records could indicate which patients are at risk of developing Alzheimer’s disease rather than waiting for physician tests down the road.

“There is so much depth of knowledge in the University of California system and we are certain when some of that expertise is applied to the data at OptumLabs it will really move us forward,” said  Paul Bleicher, M.D., chief executive officer of OptumLabs. “We work on the most difficult problems in health care.”

The two organizations also want to use the California office of OptumLabs to lure young data scientists into the medical field rather than lose them to game developers or social media in Silicon Valley.

“Everybody is struggling with the fact that Facebook, Google and other tech companies are very attractive and obvious targets for new graduates coming out,” Dr. Bleicher said. “This will help bring in UC students to work on our data.”

 


Many Californians get new benefit — advance care planning

By EMILY BAZAR

F0r Kaiser Health News

 

Millions of Californians are newly eligible for a healthcare benefit that could determine the treatment they receive in their final days — and most don’t know it.

Medi-Cal, which covers more than 13 million Californians, and Medicare, with more than 5 million California enrollees, now pay for “advance care planning” discussions with doctors.

Advance care planning isn’t about long-term-care options, such as nursing homes or assisted living.

It’s about “your wishes for your care if you are not able to speak for yourself,” said Helen McNeal, executive director of the California State University Institute for Palliative Care.

“If you’re incapacitated, if you need someone to speak for you, who do you want to speak for you? And what would be your medical wishes?” she said.

If, for instance, you have a stroke that leaves you unconscious and unable to communicate, with little hope for improvement, would you want to be kept alive with a feeding tube and or ventilator?

“These decisions may have consequences for the quality of life you have for the rest of your life. They may also have consequences for whether you live or die,” McNeal said.

In other words, they’re important. But many doctors and patients don’t yet realize that talking about these decisions — and possibly putting them into writing — is a covered benefit.

Starting in October, Medi-Cal — the state’s version of the federal Medicaid program for low-income residents — began covering advance care planning discussions between doctors (or other qualified providers) and patients (or a family member), said Tony Cava, spokesman for the state Department of Health Care Services, which administers Medi-Cal.

Any Medi-Cal recipient can use the coverage regardless of age, he said. Doctors can bill for the conversation twice a year per patient — plus an additional 30 minutes for one of the conversations — before they have to seek authorization for more coverage.

Medicare, the federal health insurance program for people 65 and older, and for people younger than 65 who have certain disabilities, started covering the discussions on Jan. 1. Medicare does not limit the number of discussions per patient each year.

Some private insurance plans cover these discussions and some don’t, McNeal said. Check with your plan.

Both Medicare and Medi-Cal will cover the conversations even if patients don’t end up completing an “advance care directive” as a result. That’s a document that formalizes your wishes, which should be shared with your family and doctor.

McNeal believes that anyone over 18 should have this discussion and complete an advance directive.

But don’t expect your doctor to initiate the conversation.

“Many physicians may not be very comfortable having this conversation,” said Richard Thorp, M.D., president of the Paradise Medical Group near Chico, and past president of the California Medical Association, which represents the state’s doctors.

A poll of more than 700 doctors, released in April, found that nearly half of them feel unsure some or much of the time about what to say when discussing end-of-life care with patients. (The poll was commissioned in part by the California Health Care Foundation. California Healthline is an editorially independent publication of the California Health Care Foundation.)

Thorp’s patients are mostly older, so he incorporates advance care planning into their annual Medicare Wellness exams. Medicare reimburses him about $86 for the initial 30-minute discussion, and about $75 for each additional 30 minutes, he said.

“There’s an art to having the discussion,” he said. “There’s an art to recognizing when people are uncomfortable.”

McNeal’s institute, in partnership with the Coalition for Compassionate Care of California, offers online training for doctors about advance care planning. One course specifically focuses on how to have an effective conversation with patients.

Because many doctors don’t know about this benefit — or may feel uncomfortable broaching the topic — most people should start by having a conversation with family and loved ones, suggested Mark Beach, an AARP spokesman based in Sacramento.

After your discussion, write down your wishes, he said.

“It’s difficult to discuss, but when you’ve done it, it’s a comfort,” Beach said. “Not only will your wishes be followed, but your loved ones will know what to do.”

A variety of forms and templates are available to consumers. Thorp sometimes uses what’s called a “POLST” form, which is a medical order that must be completed and signed by a health care professional.

It is typically for seriously ill or frail patients, McNeal said, whereas an advance care directive is a legal document for people of any age or condition.

McNeal recommends the “Five Wishes” form, which can be personalized and is available online for $5 at www.AgingWithDignity.org. Other options for advance directives can be found at www.CaringInfo.org or through AARP. (A lawyer can help you prepare an advance directive, but you usually don’t need an attorney to get it done.)

After you have filled out your advance care directive, take it to your doctor and tell her you want to talk with her about it, McNeal said. Don’t forget to give your doctor a copy.

“The role of the physician is really to provide information, not to persuade one way or the other,” Beach said.

Thorp explains to his patients what it means to be intubated, fed artificially and kept on life-support.

Most are open to the discussion, he said, and their responses are mixed. Some older or sicker patients tell him they don’t want any extraordinary measures if they’re incapacitated. Others, who are younger and healthier, say they would probably want medical intervention if they might have a chance to thrive afterward.

“Most people don’t want to be kept on life-support indefinitely. They really don’t want that,” Thorp said. “They want to live a productive life.”

 


Using intensive care coordination to reduce costs of super users

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Don Meade doesn’t like hospitals, but he uses them. In just one year, he made 62 trips to the emergency room. He rattles off the names of local hospitals in Orange and Los Angeles counties as if they’re a handful of pills.

“St. Joseph’s in Orange, (Saddleback Memorial in) Laguna Hills,” he says. “The best one for me around here is PIH in Whittier.”

At 52, Meade has chronic heart disease and other serious ailments, and he is recovering from a longtime addiction to crack cocaine. Today, he lives with his dog, Scrappy, in a small apartment in Fullerton, Calif.

Beyond making a trip to the ER pretty much every week of the year, Meade has had innumerable X-rays, scans, tests and hospital admissions – all of it on the taxpayers’ and hospitals’ dime, since he is a beneficiary of Medi-Cal, the state and federal program for the poor.

“The doctors and a few nurses knew me (by name), and I told them I should get some stock in the hospital because I was there so much,” he muses.

As healthcare costs continue to rise, attention has turned to a tiny number of expensive patients like Meade, called super-utilizers. A program that started in Orange County has taken a different approach to treating Meade and other high-cost patients: Over the past two years, it has tracked them, healed them and saved a ton of money along the way.

Meade received more than a million dollars’ worth of care in each of the two years before he entered the program, according to Paul Leon, CEO of the Illumination Foundation, a  health-services group for the homeless based in Irvine, Calif. Leon’s foundation runs the program, known as Chronic Care Plus, which has stabilized Meade and found him housing.

“It’s crazy,” said Maria Raven, an associate professor at the University of California at San Francisco who specializes in frequent-user policy. “This small group of people makes quite an impact on the healthcare system, and on the finances of the care system.”

In Medi-Cal, the state’s health-insurance program for the poor, frequent  users representing just 1 percent of the patient population account for about one-fourth of  spending, according to Kenneth Kizer, M.D., at the Institute for Population Health Improvement at UC Davis.

That’s why health professionals across California have started targeting this problem group.

In a small, busy room at a recuperative care center in Santa Fe Springs, just up Highway 5 from Disneyland, the Chronic Care Plus program’s lead nurse, John Simmons, directs treatment for a select group of homeless frequent users.

Simmons says the big secret about these healthcare frequent fliers is that they’re not necessarily the sickest patients – they’re often just homeless, with substance-abuse and/or mental health issues, and they routinely end up in the emergency room.

“It was them relying on the ER for everything,” Simmons said. “They got a common cold, they’d want to run to the ER.”

To break the cycle, Simmons conducts what is known as intensive care coordination. He helps the 37 participants, including Don Meade, find housing, get off drugs, get access to services, and make appointments with primary-care doctors.

The Illumination Foundation launched the program with the goal of breaking the vicious cycle into which these patients had fallen, then following them over a two-year period. Getting consistent care and support for that length of time, Simmons says, can change their lives for good.

“The beauty of the program was, we took those people and got them self-sufficient,” Simmons said, “and you notice their health (go) on an upward trend.”

The program saved $14 million in healthcare spending for just those 37 people over two years, compared with the two years prior to the launch of the program.

That doesn’t count the savings attained by using fewer police and emergency transportation services, Simmons said.

Saving so much money with so few participants is an open invitation to expand the program, said Pat Brydges, an administrator at St. Joseph’s Hospital, which helped fund the program.

“There are homeless people in every city in every state,” Brydges said. “There’s no reason why this wouldn’t work across the nation.”

The program is consistent with St. Joseph’s mission to help all people, and the cost savings is an extra perk, she said.

She pauses briefly to contemplate how much money would be saved if this tiny pilot program went national.

“Wow, I don’t even know if I could count that much,” Brydges said. “But if we can do $14 million in this one area alone, it’s amazing what we could do across the nation.”

Back in his Fullerton apartment, Meade said he now sees a primary-care doctor instead of going to the emergency room. He still has ongoing heart and health problems.

Being followed by program coordinators over such a long time has really made a difference in his life, Meade said.

“A lot of the stress leaves after you’re in your own home, but if you’re out in the street you’re worried so much all the time,” he said.

Getting off the street is one thing, Meade said, but the staying off it is another. It’s not just that he has his own physician now, and better health. He has a new life, he said.

The Illumination Foundation plans to release data at the end of June on its first two years.

 

 


Calif. to expand coverage to illegal alien children

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Border crossing between San Diego, Calif., and Tijuana, Mexico.

Medi-Cal, California’s Medicaid program, will expand coverage to at least 170,000 children, mostly Hispanic, who are in the state, and thus nation, illegally.

The Sacramento Bee reported that “They’ll gain access to not just emergency coverage but also dental care, checkups, mental health treatment and other vital services following an unprecedented Medi-Cal expansion that provides full coverage to all low-income children in the state, regardless of immigration status.”

The expansion will probably mean lots more patients at the state’s Federal Qualified Health Centers and hospital emergency rooms.

The Bee reported that the expansion “is exclusively state-funded and is expected to cost the state Department of Health Care Services about $132 million annually. A 2015 study from the Public Policy Institute of California concluded that about half of the state’s undocumented immigrants have incomes low enough to qualify for Medi-Cal.”
Few disinterested observers believe that the $132 million figure is plausible. It will almost certainly cost much more.

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