ITUP is pleased to announce Clifford Sarkin for our new Policy Director position, effective June 1st. Cliff will establish and develop our new Sacramento office in order to better understand and facilitate implementation of federal reform, while acting as an informational resource and collaborator for our networks in and around the capitol and across the state. We look forward to creating a consistent and reliable presence in Sacramento in order to maximize reform's effectiveness, with the common goal of expanding coverage to all of California's uninsured. Details regarding our Sacramento office contact information will be available shortly.

We also recently completed 'Part Two' of our reform impacts in California, entitled:

Primary Care and Prevention: Changes Under Federal Reform

The report analyzes effects on community clinics, physician reimbursements, health care education and workforce, and efforts in public health, prevention, and wellness. As always, we welcome any additional comments and questions from individuals in the field.

Apparently responding to ITUP's call for action, Governor Schwarzenegger wholeheartedly pledged support today for implementing health reform in California. Stepping back from his previous inaccurate claims, he acknowledged that the costs to California are spread over multiple years and all the initial costs are fully federally funded. He also called for the formation of a health care reform task force. Here are a few quotes from the news conference:

"The bottom line is that the plan is not without flaws...but it is a good law. And it is the time for California to move ahead with it, thoughtfully and responsibly...if reform is to succeed, it is up to the states to make it happen."

"Today a lot of people (are) asking me, 'Why are you so adamant about health care reform and you are a Republican governor? That's not a Republican issue. Republicans don't like it. 'I say to them, well, the bottom line is I don't see it as a Republican issue or a Democrat issue," he said. "I think that everyone needs health care insurance. Everyone needs to be covered. Everyone ought to have access."

We applaud the Governor's initiative and look forward to working with him for the remainder of his term to maximize reform's implementation.

The main arguments supporting widespread adoption of electronic health records are well documented; accurate prescriptions, seamless transfer of imaging and diagnostics, access to vital health information anywhere on the planet, paperless hospitals and doctors offices, and dosing/prescription error notifications. Also well-known are the efforts to take advantage of the volumes of data that can be gathered; disease management strategies based on your personal characteristics (age, race, medical history, even genetics), quality initiatives in inpatient care, and telemedicine.

A very interesting NEJM article summarized another EHR use, where an internal medicine practice documented exactly how much time their primary care physicians dedicated to 'outside' work not involving a patient. ON TOP of 18.1 visits, the snapshot finds that each physician performs, per day:

-23.7 telephone calls, most of which the doc handled directly
-16.8 emails, most for interpreting test results
-12.1 prescription refills, not including those part of a patient visit
-19.5 lab reports
-11.1 imaging reports
-13.9 consult reports

Not only does this data shed light on today's problem of the actual duties assigned to an overworked primary care physician, but highlights the opportunity to maximize productivity across any aspect of the health care system. Transparency has the ability to maximize efficiency and minimize waste, and will allow us to invest our resources most appropriately. In a country with over double the average per capita spending on health care at nearly 18% of GDP (and vastly lower health outcomes in multiple categories), studies like this truly exhibit the unbound potential of EHRs and HIT.

One of the major provisions in the bill is the establishment of state-run exchanges. Details of each exchange have been very much left up to the states and states have until January 1, 2014 to set up and launch their exchanges.

California is wasting no time getting started on this all-important task to sustain reform's momentum. Last week, AB 602 (Perez) was passed by the Assembly Health Committee and SB 900 (Alquist) was passed by the Senate Health Committee. Both contain the base of the language for establishing California’s Health Benefit Exchange. If enacted, the bill would go into effect starting in January 2011 and would give California three years to establish an exchange where individuals and small businesses can purchase health coverage.

AB 1602 (Perez) calls for the creation of an executive board, elected by the Governor and Legislature, to oversee the exchange. Like the Alquist bill, it gives the exchange the responsibility of screening individuals for public programs, enforcing the individual mandate, and acting as a prudent purchaser and identifier of affordable and quality plans. The bill also delivers on additional federal guidelines, including allowing dependents to stay on their parents’ insurance until age 26, eliminating lifetime limits, and prohibiting insurers from denying children based on pre-existing conditions.

The two bills will eventually be merged as they move through the legislative process (much like the federal House and Senate legislation). Follow the status of the bills and read their legislative language below:

SB 900: The California Health Benefits Exchange

AB 1602: California Patient Protection and Affordable Care Act

Want to be able to answer any question about the health bill? Well we have at last completed digging through the coarse legislative language of the entire Patient Protection and Affordable Care Act (2409 pages) and the Reconciliation Act (159 pages) to bring you our featured piece:

The ITUP Section-by-Section Guide to the Health Law

This summary will be an important reference for anyone interested in the many components of the law, and the table of contents will guide you to each major theme.

We have also begun our thought process on arguably the most important provision of the bill, the state-based health insurance exchange. Below are our initial notions as to how best to construct the California exchange over the next three years:

Designing Success for California’s Health Insurance Exchanges

Own a business?

Here is our overview of how the bill effects you.

Graduation is right around the corner – which unfortunately means thousands of college students are at risk for losing their health coverage. With the economy still looking gloomy, a large portion of those students will be jobless, therefore insurance-less, upon graduation. These students will have to hang tight until September 22, when the health reform provision that children up to age 26 can remain on their parents' insurance goes into effect.

However, a few health plans surprised us all yesterday by announcing that they would implement the provision for graduating students sooner than the bill requires. UnitedHealthcare and Humana will comply immediately, WellPoint on June 1 and Kaiser at some point before September.

If you think about it, it is actually in their best interest to continue coverage for these individuals. Not only do gaps in coverage mean additional re-enrollment fees, but this is a population of young, generally healthy individuals who are cheap to insure. Why take them out of the risk pool, even temporarily? HHS Secretary Kathleen Sebelius sent a letter to other insurers explaining this and urging them to jump on the bandwagon.

Big picture: This is a huge, on-the-ground implementation that will benefit thousands of U.S. citizens within just the next few months. Brace yourselves, because this is only the beginning!

Big news out of HHS today, with the creation of the new Office of Consumer Information and Insurance Oversight. Housed within the Office of the Secretary, the Office will provides leadership for implementing the provisions of the health reform bill that address private health insurance. Within the Office are four separate components, all of which will work with the relevant players in Sacramento and across the state:

Office of Oversight: Responsibilities include implementing and enforcing new rules governing the insurance market and medical loss ratios; performing rate reviews; and issuing rate review grants to states.

Office of Insurance Programs: Responsible for administering temporary high-risk pool programs and associated funding to states and the early retiree reinsurance program.

Office of Consumer Support: Responsibilities include compiling comparative pricing data for the HHS web site; providing consumer assistance with the new health insurance system, and issuing consumer assistance grants to states.

Office of Health Insurance Exchanges: Responsible for developing and implementing policies for state-based exchanges; issuing planning grants to states; and overseeing the operations of exchanges.

One of the chief arguments among health reform skeptics is that many of the 'perceived savings' used to finance the bill will never actually materialize and we will be left with another unsustainable entitlement. Further, the naysayers proclaim that any real savings will just simply come from cuts in Medicare and Medicaid. There are numerous provisions in the bill that rebut these falsities (protections ensuring Exchange subsidy sustainability, redirection of uncompensated care funding that is already spent, bending the curve through the excise tax/MedPAC with teeth, and an INCREASE in reimbursement to primary care providers in Medicare/caid), but I want to stress that the fundamental concern is absolutely valid: How do we modernize the 20th century bureaucratic behemoths that are Medicare and Medicaid in order to ensure their sustainability as more nimble programs in the 21st century? The answer to this question becomes even more crucial given the programs' assured expansions (Medicare from an aging society and Medicaid from expansion to 133% FPL).

An unlikely private industry source suggested a possible course of action for Medicaid today. The source, UnitedHealth Group, suggests that a number of practices could yield significant savings, focused mainly around coordinating care, modernizing technology and administrative processes, and shifting expensive long-term care (now 2/3 of Medicaid costs) from nursing homes to community-based and homed-based care. In all, the report estimated up to $366 billion in savings to states and the feds from:

Increased use of coordinated care $82B
Coordinated care to expansion population $11B
Shift away from long-term care to community-based care $140B
Administrative modernization $133B

To be clear UnitedHealth has a clear stake in these strategies, and admits their AmeriChoice program can be utilized to tackle 2/3rds of these costs. With the vested interest in mind, though, public private partnerships like this will be crucial if advocates are serious about modernizing these 20th century institutions into coordinated and wired bodies. And now, with health reform moving to eliminate the appalling profit-motivated action of the insurance industry, broader alliances with health plans and efficiency-minded systems may be just the answer to this question.

Make no mistake about it: there is a severe doctor shortage in the United States and the problem is only getting worse, especially in primary care. The Association of American Medical Colleges estimates that we could face a shortage of as many as 150,000 PCPs in the next 15 years. The reasons for this trend vary, though the comparatively lower pay, steep medical school debt, and even the personality types of those accepted to medical school are clear contributors. As a future physician, I understand the implications (and potential consequences) of this reality, and recognize that swift action must be taken. The health reform law makes significant improvements to the status quo by setting a clear priority for docs to enter primary care. Some of the provisions include:

-Up to $1 billion annually for the National Health Service Corps (a loan forgiveness program for PCPs to provide care in shortage/underserved areas)
-$125 million annually for state loan forgiveness programs in primary care
-A 10% Medicare payment bonus to primary care physicians
-Increasing Medicaid payments to Medicare levels
-Shifting unused residency slots to high-need primary care areas
-Expanding primary care residency to non-traditional (non-hospital) sites such as community health centers
-$50 million annually to expand Teaching Health Centers, with $230 million appropriated for primary care training

Though these efforts will surely be of benefit, many recognize that the root of the problem is a shortage in medical resident positions. In 1997, Congress capped the number of resident slots at 15,000, as training is tied to Medicare payments. It will be necessary to revisit the expansion of this funding (currently $9.1 billion), which did not make it into the legislation. More-so, it will be necessary to think outside the box, with a focus on non-physician providers like Nurse Practitioners and Physicians Assistants. Though somewhat controversial in expanding their scope of practice into traditionally physician's turf, the endeavor is promising (if not essential) in order to tackle the issue.

Below are some of the law's provisions related to the role of nurses:

-$50 million to nurse-managed health clinics that offer primary care to low-income patients.
-$50 million annually from 2012-15 for hospitals to train nurses with advanced degrees to care for Medicare patients.
-10 percent bonuses from Medicare from 2011-16 to nurse practitioners, who work in shortage areas.
-A boost in the Medicare reimbursement rate for certified nurse midwives to bring their pay to the same level as a doctor's.

I've been quite impressed with the developments coming out of the Badger State lately, and the ambitious turn-around since the law's passage is a testament to their sincerity for effective reform implementation. For example, last week the Governor signed Executive Order #312 creating the Office of Health Reform to oversee implementation of national health care reform in Wisconsin. The office will be co-chaired by Wisconsin Secretary of Health Services Karen Timberlake and Wisconsin Insurance Commissioner Sean Dilweg.

The state high-risk pool, the well-funded Wisconsin Health Insurance Risk-Sharing Plan (HIRSP), has publicly stated that it is poised and ready to expand the program through the $5 billion in new federal funding for state pools. It is worth noting the state covers nearly 17,000 people (our dear MRMIP high-risk program barely clears 7,100), and includes a sliding scale premium subsidy for low-income individuals (something we recently suggested for California).

Finally, the state is about to take advantage of more reform funding by expanding a program for medically indigent adults.

Hopefully our state leadership is inspired to make similar strides, as health reform is something that the Governor has made his own priority in the past. With only a few months left in office, the possibilities are ample for the health-champion's legacy...

In the next six months, billions of dollars in new federal grants will be available for FQHCs, school-based health centers, community-based health centers, and nurse managed health clinics. The individual mandate, health insurance exchanges, and premium subsidies will bring our nation towards near-universal coverage and community clinics will become more important than ever in delivery quality and coordinated care. As a lynchpin of the safety net, clinics will need to collaborate with managed care organizations, counties, and the state in order to take advantage of the competitive market through the Exchange.

The next three 'implementation years' are crucial in order to become reform-ready. We have opened a Discussion at the Community Clinic Voice to facilitate dialogue in this regard, and will use the discussion to respond to questions and concerns, as well. Your input will help inform ITUP's collaborative work going forward.

Now that federal health reform has passed, California faces a new challenge: Preparing for its implementation. With 6.5 million reported uninsured in 2006, county systems have long been relied upon to run programs for Medically Indigent Adults (MIAs) – low-income individuals without disabilities or minor children living at home who do not qualify for public programs.

Ten counties in California currently receive a federal match through the §1115 Medicaid waiver to provide care for the MIAs. These counties have created pilot programs that aim to cut costs and improve health outcomes. California is currently seeking to renew this waiver, which expires in August, 2010. Under a renewed waiver, these counties - and possibly others - could use county dollars to draw down a federal match and begin transitioning their systems to meet federal reform provisions in the next few years. This includes transitioning high risk patients to managed care, focusing on primary care and prevention, and improving access to care.

California can benefit from federal reform as early as this month. As of April 1, the state may receive a federal Medicaid match for early expansion to MIAs up to 133% of the federal poverty level (FPL). Starting on January 1, 2011, the government will pay 90% of the cost to provide care coordination and case management to Medicaid enrollees with multiple chronic conditions. As of January 1, 2014, the government will fully fund the cost to expand Medicaid coverage to these individuals up to 133% FPL. By enrolling these patients now using federal matching funds, California avoids barriers due to enrollment and positions itself to maximize federal dollars as reform is implemented.

To read more about using the §1115 waiver as a bridge to federal reform, read our most recent report here and the California Healthline article to which we contributed here.

As I have mentioned, the majority of reform implementation responsibility will fall to the state, for each state will be effected in different ways and need to adapt accordingly. California will surely benefit, given our disproportionate number of uninsured and our qualification for a large portion of the new federal funds. Unlike other states, though, we have a modest eligibility level for Medicaid, and the program's scheduled expansion will require additional state expenditure. Many naysayers use this point as justification that 'we can't afford it,' though the objection is extremely nearsighted.

A Committee on Energy and Commerce analysis indicates that although the state will be required to contribute some additional money, the contribution is a fraction compared to the billions in new federal funds the state is slated to receive in addition to other secondary economic effects. 

Over the next ten years, the state and its residents will receive new federal support for health care worth approximately $124 billion. In California, the law will:

-Provide families with tax credits to purchase health care coverage and other federal health care benefits worth $106 billion.
-Provide small businesses with $4.3 billion worth of health care tax credits.
-Fill the donut hole, saving seniors $9.3 billion in drug costs.
-Provide $1.4 billion in new funding to community health centers.
-Reduce uncompensated care costs for California health care providers by $2.6 billion.
-Extend health coverage to 3.8 million uninsured residents and improve coverage for 21 million residents with employer-based or individual health insurance.
-Guarantee that 800,000 residents with pre-existing conditions can obtain coverage.
-Protect 66,000 families from bankruptcy due to unaffordable health care costs.
-Allow 3.2 million young adults to obtain coverage on their parents’ insurance plans.

Unfortunately, our Governor and others have chosen to ignore these facts. Anthony Wright of Health Access obtained a letter from our distinguished California leadership, which references the above analysis and will hopefully help clear things up for ol' Arnold:

The Honorable Arnold Schwarzenegger, Governor of California
State Capitol Building
Sacramento, CA 95814

Dear Governor Schwarzenegger:

We are writing to explain the benefits of the new health reform legislation for California.

Your Secretary of Health and Human Services estimated this week that the legislation would cost California $2 billion to $3 billion annually. This is an incomplete and misleading assessment because it fails to take into account billions of dollars worth of new federal tax and health care benefits that will go to California's families and small businesses.

We have enclosed an analysis of the many benefits that the health reform law will bring to California and its residents. Over the next ten years, Californians will receive $124 billion in new federal support for health care coverage.

These new benefits include $106 billion in tax credits and other federal funding to pay for health care coverage for California families, $4.3 billion in tax credits to small businesses that purchase health insurance for their employees, and $9.3 billion in federal assistance to California seniors in the Part D drug donut hole. The legislation will also extend health care coverage to 3.8 million uninsured California residents and improve coverage for 21 million residents with employer-based or individual health insurance.

We hope this information is helpful to you as you evaluate the health care reform legislation and its many benefits to the state and California families.

Sincerely,
Rep. Henry A. Waxman, Chairman, Committee on Energy and Commerce
Rep. George Miller, Chairman , Committee on Education and Labor
Rep. Pete Stark, Chairman, Subcommittee on Health,
Committee on Ways and Means
Rep. Zoe Lofgren, Chairman, California Democratic Congressional Delegation