5 Things California: Lessons from Texas, Phil Jackson, Graham-Cassidy

I am on my way to our Convening Panel meeting for our 2017 Southern California State of Reform Health Policy Conference. It’s an impressive group both in its diversity and its level of smarts. This year’s event will be in San Diego on December 5th.

You can check out the highlights from our Northern California event here.

Now, on to 5 Things We’re Watching in California health care for September, 2017.

DJ 5 Things Signature

1.  When Amazon enters health care

The news that Amazon will be looking for a second HQ spurred me to thinking last week about what it would look like if Amazon entered health care. It would likely come with an announcement as quick and straightforward as the HQ2 announcement, and with just as many implications for Washington State.

I lay out an 8-step strategy for Amazon that I think – while certainly a big deal – is probably not nearly as hard for the giant corporation as entering the brick-and-mortar grocery space.  Which, as you know, they’ve done.  Amazon is already a health care giant based on its health care spend for its employee count alone.  I recognize it’s not an apples-to-apples comparison. Nevertheless, that’s about 425,000 employees for which it already purchases care – soon to be 500,000.

2.  Lessons for CA from Hurricane Harvey, Texas

Hurricane Harvey made landfall in Texas on August 26th. That seems like a lifetime ago after Hurricanes Irma and Maria. But, it also gives us some time to learn about how prepared the health care system was – not on the delivery side, but the administrative side.

After 12 years of no hurricanes, the Texas administrative side of health care is still playing catch up.  I was in Texas after the event and posted this story on some of the challenging administrative realities there.  For example, who pays the co-pays when those are waived in public programs? How do you guard against fraud when you now have providers filing claims from locations at which they aren’t credentialed?  What legal liabilities from audits befall providers and payers when they try to be flexible in a time of crisis?

One lesson from Harvey for California is this: don’t just plan your emergency response on the delivery side, but also plan it on the administrative and financial side, too. It’s a part of emergency preparedness that may be overlooked.

3.  AB 1250 and the impact on counties

I’m in San Diego this week for our Convening Panel meeting ahead of our 2017 Southern California State of Reform Health Policy Conference. More on that next week. But, there is concern here about AB 1250, legislation that caught some by surprise late in the session.  The bill would restrict a county’s ability to contract out for services, including health services. So, a county like San Diego that contracts out mental health, substance abuse and others, would potentially need to bring those services in house under this bill.

The fiscal impact is unknown, but likely includes “potentially major local cost increases or service reductions.”  The bill was amended in the Senate earlier this month to allow counties that “operated a health plan as part of the Covered California exchange” to be exempt. However, this exemption is removed for “contracts that would cause the displacement of county employee or loss of county employee positions.”

Expect the bill to be negotiated in the interim with plans to move it forward next session.

4.  Video: Phil Jackson, Sutter Health

Phil Jackson, CEO of Health Plan Products at Sutter Health joins us in this edition of “What They’re Watching” to talk about leveraging data to service the community.  Jackson leads the plan side of Sutter’s health system under the brand Sutter Health Plus.

“I think we’re focusing a lot of time and energy, given that we have the single largest instance of Epic, to really begin to mine the data and to understand gaps in care, to leverage that data in a predictive modeling way so that we can anticipate the needs of the patients and the members that we enroll, that we can organize care to meet their needs.”

5.  Graham-Cassidy’s impact on California

The latest Senate reform bill, the Graham-Cassidy legislation, will likely come to the Senate floor Wednesday or Thursday. Yesterday, the CBO was out with a “Preliminary Analysis” of the bill, saying: “In general, the allocation of the grants under the legislation would shift funding away from states that have already expanded eligibility for Medicaid under the ACA and toward states that have not.” A separate analysis shows California taking a 13% cut in federal funds. Covered California says the bill “would nearly return the uninsured rate to pre-Affordable Care Act levels” and that the individual market “would collapse as soon as 2021.”

At a hearing yesterday, the only one the bill will have, Sen. Cassidy defended himself and his bill in front of one of DC’s most powerful committees, the Senate Finance Committee. And, he did remarkably well in what is an uncommon position of drawing fire directly from his colleagues.

Four Senate Republicans are now on record against the bill: McCain, Collins, Paul and Cruz. Only two can be lost, assuming no Democrats support the bill.