5 Things California: Martin O’Malley, Sacramento Insiders, Convening Panel

Typically, I try to keep this newsletter to 5 Things we think are interesting and worth your time. This month, though, we have at least 7 things we think are important for California health care and health policy leaders – and that doesn’t even count Gov. Brown’s recent budget or the news this morning that AG Jeff Sessions is prepared to issue subpoenas to California related to being a sanctuary state.

Thanks for reading our content. Stay tuned for more information about our upcoming 2018 Northern California State of Reform Health Policy Conference on April 26th.  I expect our Topical Agenda will be out in three weeks!

1.  Podcast: Martin O’Malley, former Gov. of MD

As governor of Maryland, Martin O’Malley led one of the most innovative payment reform efforts to have been implemented in any state. By moving hospitals to a fixed and predictable payment model, incentives for the organizations were redirected from quantity to a new focus on quality. O’Malley was a candidate for the Democratic nomination for President in 2016, and made health care an important part of his campaign.

In this podcast, we have an extended conversation with O’Malley. We talk through some of the health care reforms he worked on in Maryland, and the current state of our national politics. Take a listen here and be sure to subscribe.


2.  Convening Panel meets next week

Our Convening Panel for our 2018 Northern California State of Reform Health Policy Conference is getting together on Monday.  This is a group of diverse voices, who are each working to move health care and health policy forward in different ways.

We’ll talk through the various topics and conversations that Sacramento will be having by the time our April 26th event rolls around. So, now is the time for you to offer any content or topic ideas you might have that should be in the mix for our April agenda.  I’ll bring those to our Convening Panel discussion next week, and make sure they are included.

This will be the first of three events we host in California in 2018, including Los Angeles and San Diego. Our hope is to continue to grow State of Reform, to help foster local and regional conversations around care improvement and policy innovation. So, if you have ideas on content, or thought leadership you’d like to share, drop us a note and let us know what you’re thinking.  We’d love to have the conversation.


3.  JP Morgan: a mirror onto ourselves?

JP Morgan’s conference for investors in health care was two weeks ago.  There were about 10,000 attendees that were in or “around” the San Francisco event. It’s one of the biggest events on the bio-pharma and digital medicine calendar. It’s also “a mosh pit of power and insecurity — along with sleeplessness and excessive consumption of alcohol.” Nevertheless, it’s something of a mirror for an industry that continues to generate money that attracts investors of all stripes. Notably:

Sadly, there were more CEOs named Michael presenting than all of the women presenters combined.

“We are in the middle of a bubble in all health care asset classes. Everyone knows it, but no one knows how it will end.”

The disruptive threat from Amazon is a primary driver of increasing M&A activity, not efficiency.

Shockingly for non-scientists, one “panel on gene therapy acknowledged that reimbursement might just be the trickiest part of these innovative therapies.”


4.  Video: Trahan Whitten of Toyon Associates

Trahan Whitten is the Executive Vice President at Toyon Associates. Given the recent federal government shutdown, I wanted to share his thoughts in this edition of “What They’re Watching”on how confusion at the federal level is affecting the health care community.

His comments were made in December, but one principle he speaks to is somewhat timeless:  “We have a balancing act. If we can get one side of the aisle to talk to the other, just a little bit…  We need to figure out how to grow from here…  without spending our next generation’s future in the process of doing that.”


5.  Podcast: Sacramento insiders discuss the session

If you are subscribed to our podcast, you’ve already heard this podcast I expect.  But if not, this panel is a good one to check out. This group of “Sacramento Insiders” talks through the 2018 legislative session and what we can expect.  It includes Kassy Perry, Jim Gross, and David Panush – three of the most influential and knowledgeable players in Sacramento, in my view.

Gross elevates the 2018 gubernatorial election, and asks who is going to come in second?  That, he thinks, is the key question.  David Panush says watch the Hispanic vote, how it impacts elections, and what that will mean for some realignment in the legislature.  Kassy Perry suggests that perhaps the #metoo movement will start taking down legislators as they think about running for re-election.


6.  CAPG’s new name: America’s Physician Groups

CAPG, nee the California Association of Physician Groups, has updated its name to better reflect its growth and increasing national relevance.  Now called America’s Physician Groups, the organization now boasts almost 300 provider groups and IPAs across 45 states, many of them taking some form of capitated or hybrid risk payment to coordinate care.

Importantly, APG has become one of the more active, prominent voices in Washington DC related to Medicare Advantage rates, policy and administrative matters. Last week, they released an 8-page letter to CMS that suggested “CMS should use the Five-Star Quality Rating program to develop incentives for advanced APM contracting in Medicare Advantage.” That would be a significant move if MA plans were measured, in part, by the nature of their provider contracts. If it comes to pass, it’s because APG was out in front on this on behalf of its members.


7.  Thoughts on the Providence merger rumor with Ascension

Last month, the WSJ reported that Providence St. Joseph was in merger talks with Ascension to create one of the nation’s largest hospital conglomerates. This has been an open secret since the summer. Over that time, I talked with more than 20 folks about their thoughts on the rumored deal.  We chose not to comment then on the Prov merger discussion, but instead to let that news come out on its own schedule.

From these conversations, I put together this piece with two things I know and two things I think I know about this deal.  One thing I know:  this fits a pattern of Providence CEO Rod Hochman’s leadership, one established while he was at Swedish in Washington State.

One item I left aside, but which continues to float along the rumor mill is the ongoing difficulty of integrating the legacy St. Joseph’s system and the legacy Providence system. It seems operationally ambitious to jump to Ascension before things are fully integrated with these two systems.