Tag Archive: Diana Dooley

Lingering recession fallout: Medicaid grows to cover nearly one third of Californians

Enrollment in California’s Medicaid program, Medi-Cal, is projected to grow in the new fiscal year that began July 1 to cover about 30 percent of the state’s population, with total enrollment expected to rise from 7.9 million before implementation of the Patient Protection and Affordable Care Act to 11.5 million in fiscal 2014-15, according to a summary of the budget.

The growing importance of Medi-Cal was highlighted in the release today of results of a California Field Poll of registered voters showing respondents assigning growing importance to Medi-Cal. Twenty-nine percent of voters surveyed rated the program as “very important” in a 2011 Field Poll; that number rose to 40 percent this year. “This is a safety net program (for the poor) that has now reached the masses,” noted Mark DiCamillo, senior vice president of the Field Research Corporation, calling the increase “very significant.”

The high percentage of Californians covered by Medicaid appears to coincide with the 2007-09 recession. As the downturn began to bite, data compiled by Kaiser Family Foundation show California having about the same percentage of its population in Medi-Cal in 2010 – 31 percent that year – and among the highest proportion of its population in Medicaid compared to other states. Only Maine and Vermont equaled California’s 31 percent in 2010 and those three states were exceeded only by the District of Columbia at 35 percent, according to the Kaiser Family Foundation. (Comparative year to year data are not available)

The growth in Medi-Cal spending all but wiped out an unanticipated surge in state tax revenues, the Ventura Star quoted Gov. Jerry Brown as saying. Consequently, Brown’s revised $107.8 billion general fund budget proposal contains little new spending beyond covering the additional costs of providing health care to 307,000 more low-income residents than anticipated when the 2014-15 budget was released in January, the newspaper reported. Another account appearing in The Sacramento Bee quoted Brown as saying California faces $1.2 billion in unanticipated costs in expanded Medi-Cal enrollment in the new fiscal year.

As Medi-Cal grew to cover 1 in 3 Californians in 2010 as tax revenues declined in the recession, the administration of then-Gov. Arnold Schwarzenegger bluntly declared the state could no longer afford to fund the program as it sought cost relief though program reductions and federal rule waivers. The heavy fiscal burden of program clearly continues to vex the current Brown administration. “As we are paying for this that will be at the expense of other government priorities,” said Health and Human Service Secretary Diana Dooley at today’s Sacramento briefing on the Field Poll results.

A final takeaway worth pondering: With more people being covered by Medicaid, might California and eventually the United States as a whole be moving toward the German “Kaiser system” where the government provides a safety net of basic health coverage for all?

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Schedule control: Real cultural change toward achieving a healthier California

California, which once basked in the suntanned imagery of youthful vigor and health and fitness recognizes the shine has faded as its population grows older and more sedentary and obese, spawning an unprecedented increase in chronic, preventable disease.  Earlier this year, the administration of Gov. Jerry Brown formed a task force with the vision of restoring the Golden State to the healthiest in the nation by 2022.  This week, the Let’s Get Healthy California Task Force released a draft report outlining how the state will achieve that vision based on six goals and associated priorities and health indicators.

Brown and his Health and Human Services Agency Secretary Diana Dooley – who also chairs Covered California, the state’s health benefit exchange — are to be commended for initiating and championing this monumental project.  When it comes to something as big as improving the health status of the nation’s most populous state, one of the task force’s members, Dave Regan, president of Service Employees International Union – United Healthcare Workers West, clearly understands what’s needed to generate the enormous momentum to counter the sickly, sedentary status quo.  Here’s what he said with the release of the draft report as reported by the California HealthCare Foundation’s California Healthline:

There’s lots and lots of good stuff in here. What I’m thinking about is what’s not in here,” said Dave Regan, president of Service Employees International Union. “I keep going back to two things — 80% of what drives health care costs is behavioral, and only 20% of the cost of health care can be affected by what we do today.”

Regan said there needs to be a bigger change, a cultural change, to affect some of the root causes of rising health care costs and poor health of Californians.

“When you look at the goals and indicators in here, we may have a forest-and-trees effect. The behavioral culture is far more influential than all of us nibbling at the margins. … Unless we change the behaviors of millions of people, then we’re just tilting at windmills.”

Regan’s exactly right.  And he need look no further than the state workforce – a large portion represented by his union –  to see a glaring example of a subsection of the bigger California health problem.  These thousands of state employees need to get out of their offices and cubicles and exercise more.  Especially as they drive up the cost of providing them health care with one third driven by chronic conditions and raise serious questions as to whether the state will be able to afford to provide them health coverage in retirement.

But they are held prisoner by a rigid, outmoded Industrial Age work culture that requires them to be at the desks from 8 to 5, Monday through Friday.  Most could shift their work outside this fixed time frame and location, thanks to today’s information and communications technology — much of it innovated in California — that makes it easily possible for them to do their jobs in a home office or other locations where they can be productive.

This “work shifting” is an essential cultural change that Regan correctly says is needed because it affords people control over their daily schedules and frees up hours each week of wasted commuting time.  A 2011 University of Minnesota study found when people are afforded control over when and where they perform their jobs, they got more sleep and exercise.  Schedule control is thus a potentially powerful cultural shift because it enables healthy living – a goal identified in the task force report – and makes it easier for people to adopt healthier lifestyle choices.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

PPACA notwithstanding, health insurance facing crisis

The enactment of comprehensive health care reform nearly one year ago aside, the U.S. health care system needs deep systemic reform that can meaningfully reduce medical costs and align risk and incentives among consumers, providers and payers.  That’s the consensus among several panelists who took part in a health care forum Friday in Sacramento, California sponsored by the UC Berkeley Institute of Governmental Studies, School of Public Health and the UC Sacramento Center.

For Diana Dooley, California’s newly installed secretary of Health and Human Services, tamping down demand for medical services is an essential component of bending what all panelists agreed is an unsustainable, unrelenting upward trajectory in medical costs.  People have to take more responsibility for their health, Dooley emphasized, suggesting that the current mindset that equates more medical care with better health must be abandoned. “We have an inexhaustible appetite for health care and it’s a significant cost driver,” Dooley said.  “We have to have some very frank conversations around kitchen tables and in political dialogue and ask ‘How much medicine is enough?’ A lot of these cost drivers are our choices.”

Dooley’s absolutely right.  Poor lifestyle choices are within the control of individuals and are the ultimate cost driver.  I would add that those lifestyle choices are strongly influenced by cultural values that place too much emphasis on sedentary work, commuting and leisure time.  Those values reinforce spending too much time sitting, too little time exercising and sleeping and the interconnected lifestyle issues of excessive stress and bad eating habits.

In this environment, it’s no wonder people’s health declines and they become overweight and develop costly chronic conditions like obesity, cardiovascular disease and diabetes.  From the perspective of health insurers, all of that adds up to poor risk management.  But most people don’t view it that way.  Health insurance is seen more as a prepaid medical plan rather than a means of paying for unexpected, high cost medical expenses.  Health breaking down?  Get to the doc shop or the hospital and get fixed up.  The problem is as Dooley and others on the panel pointed out, when too many people adopt this way of thinking, insurers and managed care plans end up paying out too much, jeopardizing the financial solvency of these payers.  Hence, premiums keep futilely chasing after costs in a vicious, unvirtuous cycle.

Panelist Paul Markovich, COO of Blue Shield of California, underscored the seriousness of those escalating premiums in the individual health insurance segment.  Premiums can go up only so much before healthier people decide to drop their coverage, leaving less healthy insureds in the pool.  That is placing “tremendous stress” on the pool, Markovich said.  “You have all heard of the death spiral (of adverse selection).  We are absolutely experiencing some of that stress right now.”

Cindy Ehnes, the director of the California Department of Managed Health Care, noted during her seven-year-long tenure managed care plans attempted to preserve their troubled individual markets through risk selection — what Ehnes termed “cherry picking and lemon dropping.”  Next, Ehnes explained, payers imposed high deductibles hoping to shift more risk to consumers and drive down the utilization of medical services.  Now with the individual market facing structure failure, that strategy has played out, leaving only steep premium hikes as a last, desperate measure to keep the market solvent.  That’s why premiums are high and headed higher despite high deductibles.  People paying high deductibles naturally expect their premiums to be substantially lower than those with low or no deductibles. When they don’t see lower premiums in proportion to their high deductibles, they understandably drop coverage figuring they’re getting poor value for their premiums.  That in turn takes more premium dollars out of the pool, forcing insurers to raise premiums even more just to stay afloat.

Not surprisingly, payers bearing the bad news of fat premium increases are coming under withering criticism from the consumer groups, the media, regulators and policymakers.  Ehnes noted — and I would agree — simply chastising “greedy” payers isn’t going to help.  There’s far more to it than that.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

%d bloggers like this: