Payers & Providers, Issue of March 11, 2010

8/14/2019 Payers & Providers, Issue of March 11, 2010

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Even as healthcare insurers have comeunder fire for levying huge rate increaseson consumers, a bill is being contemplatedin the Legislature that could dilute the

coverage they offer for years to come.AB 2587, authored by Assemblyman

Tom Berryhill, R-Modesto, would allowinsurers to drop mandated coverage forovernight hospital stays for maternitypatients, specified treatments for AIDSpatients and testing for a variety ofconditions, among others. Most suchmandates stem from legislation enacted inresponse to consumer complaints aboutspecific coverage gaps.

The bill in its current form would allowinsurers to drop as many as four-dozencoverage mandates from policies until

Californias unemployment rate dropped to5.5% or below and remained that way forfour consecutive quarters. The statesunemployment rate is currently 12.5%.Many economists believe it will take yearsfor it to get well below 10%.

If passed by the Legislature and signedinto law by Gov. Arnold Schwarzenegger,the dropping of mandates would go intoeffect in early 2011.

AB 2587s operative link to theunemployment rate is similar to a potentialballot proposition that would suspend apollution emissions law until the economy

approved. It has wide support amongconservative lawmakers and the businesscommunity.

Berryhill, a two-term lawmaker who

received significant financing from theinsurance industry and physician lobbiesfor his 2008 reelection campaign,introduced the bill late last month.Although it has yet to be assigned to acommittee, it is expected to undergo itsfirst hearing on March 23.

Berryhills staff did not respond to arequest for comment on the bill.

None of our plans or ourorganization sponsored the bill, saidNicole Kasabian Evans, spokeswoman forthe California Association of HealthPlans, which is the states leading lobby

for health insurers. CAHP has yet to takea position on the legislation, she added.

The only health insurer specificallynamed as one of Berryhills campaigndonors, Woodland Hills-based HealthNet , contributed $3,600 just days beforethe 2008 election, according to publicdocuments. A Health Net spokesman saidthe insurers position was on thelegislation was pending.

The bill was blasted by consumeradvocates, who questioned how it could

Legislation Would Slash CoverageBill May Create Long-Term Exemption For Insurers

California Edition

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Payers & Providers

help Californians in a severe economicdownturn.

We would be back to the absolute

worst of the HMO abuses if this passes,said Judy Dugan, director of research forConsumer Watchdog, a Santa Monica-based advocacy group that is sharplycritical of many insurer practices.

There is no time more than nowwhen consumers need such protections,said Anthony Wright, executive directorof the Sacramento-based advocacy groupHealth Access.

Wright questioned the judgment ofintroducing such a bill when one of thestates major insurers, Anthem BlueCross, is under fire for attempting to raise

premiums on its individual policyholdersby as much as 39%. Anthem agreed todelay the rate increases until they can bereviewed by California InsuranceCommissioner Steve Poizner, who is alsoa Republican gubernatorial candidate.

Although Poizner has yet to take aposition on the bill in his role asinsurance commissioner, his spokesmanin that office said he supports eliminationof many coverage mandates.

Excessive mandates add anywherefrom 25% to 40% to the cost of health

Page 2

insurance, depending on who you speakwith, said spokesman Darrel Ng. This bilmay be an attempt to allow insurers to sell

truly catastrophic policy. Ng added thatsuch a policy could be offered at a lowercost to consumers.

Although neither Wright nor Dugan givthe bill a likely chance of passage in aDemocratic-controlled Legislature, Duganbelieves Berryhill may have introduced it tocurry favor with health insurers andpowerful business lobbies. That is the onlything he could possibly gain from this, shesaid.

Altogether, Berryhill received more tha$47,000 from the healthcare industry for hi2008 campaign, primarily through political

action committees. He announced late lastyear he would run for the state senate seatbeing vacated by Sen. Dave Cogdill, R-Modesto.

Shortly after Berryhills announcement,the California Fair Political PracticesCommission opened an investigation intowhether Berryhill and his brother,Assemblyman Bill Berryhill, R-Ceres, usedthe Republican Central Committees inStanislaus and San Joaquin Counties toimproperly funnel money into their 2008reelection campaigns.

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In Brief

Cal E-ConnectLaunches Exchange

Project

A new public-private entity calledCal eConnect will oversee

potentially billions of dollars infederal funding to create astatewide health informationexchange.

This new governance entitywill help ensure that California isable to promote and expand theexchange of health information,said state Health and HumanServices Secretary Kim Belsh.

Cal eConnect was selected byCalifornia HHS among the sevenbidders it received to construct andoversee the information exchange.It is expected to provide acommunications hub andguidelines for providers who have

electronic medical records ondisparate systems but would like toshare them to improve patient care.

The exchange is expected to befunded in part by $3 billion infederal stimulus funds to assisthealthcare organizations inimproving the performance of theirinformation technology systems.

The entity arose out of a jointproposal submitted by theCalifornia E-Health Collaborativeand the California Regional HealthInformation Organization. Bothhad submitted their own bids, buttheir similarly high scores promptedthe state to resubmit their proposal

jointly.CalRHIO all but ceased

operations when it could not reacha governance agreement withCAEHC. CalRHIO had agreed not tocompete with the entity that waschosen by the state to administerthe exchange.

Named to the Cal eConnectboard of directors include co-chairsDavid Lansky of the PacificBusiness Group on Health and

Mandates (Continued from Page One)

Blue Shield of California is teaming withAdventist Health and the California HealthCare Coalition to focus on improving thequality of care at four Adventist hospitals inthe San Joaquin Valley.

In a three-year pilot project, the entitieswill pore over claims data, quality reports

from the California Hospitals Assessmentand Reporting Task Force (CHART) and theOfce of Statewide Health Planning andDevelopment to determine how to improveperformance in 85 different categories.

The initiative pairing insurers, hospitalsand other parties to improve patient care isthe second announced this year. In January,Blue Cross of California pledged $6 millionto improve patient outcomes at hospitalsstatewide.

Although Adventist has embarked on a

systemwide program to improve performancein such categories as patient falls andventilator-acquired pneumonia, ofcials withthe Roseville-based not-for-prot say thereremains room for improvement.

According to ofcials attached to theproject, quality measures at the four hospitals

Central Valley General Hospital and HanfordCommunity Medical Center in Hanford; SanJoaquin Community Hospital in Bakerseldand Sonora Regional Medical Center areinconsistent.

The hospitals are all focused a little bitdifferently depending on their metrics, saidJoAline Olson, Adventists vice president forclinical innovation. It operates 17 hospitals in

Continued on Page 3

NEWS

Continued on Next Page

Blue Shield, Adventist Target QualityWill Launch Pilot to Lift Outcomes in Central Valley


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The attorney who successfully pushed raterollbacks onto Californias automobile insurersin the 1980s is now advocating the same forhealth plans.

At a press conference Wednesday, HarveyRoseneld asked Congress to impose a freezeon health insurance premiums as part of acomprehensive reform package, and called forregulations at the state level to review andapprove annual increases.

In 1988, Roseneld led a group ofreformers who convinced California voters toapprove Proposition 103 in 1988. The ballot

initiative rolled back auto insurance ratesmore than 20% and capped future increases.Roseneld said he was prompted to

demand premium controls by the recentattempt by Anthem Blue Cross to impose anaverage 25% rate increase for its individualpolicyholders, and permit additional increasesprior to their policy renewal.

Before Anthem, there was no discussionabout the regulation of healthcare premiumrates, said Roseneld, who is afliated withthe Santa Monica-based advocacy groupConsumer Watchdog. It seemed Washingtonwas operating in a parallel universe,

promoting a reform package where American

people have to pay for coverage with nocontrols over prices.

Rosenelds call came on the same daythat Health and Human Services SecretaryKathleen Sebelius asked health insurers toprovide transparency and justication for rateincreases.

How much pressure can be put on theremaining customers before the businessmodel collapses of its own weight? Sebeliussaid in a speech delivered at the annualmeeting ofAmericas Health Insurance Plans(AHIP) in Washington. AHIP is the nations

largest lobby for health insurers.Along with the call for a rate freeze,Roseneld called for Congress to enact aprior approval regulation that would allowstate insurance commissioners to review anyfuture rate increases before they go intoeffect.

Rosenfeld noted that with a rate freeze inplace, insurers are liable to continueincreasing premiums dramatically. He citedrecently enacted credit card reforms that didnot include freezes on interest rates. As aresult, many consumers had interest rates ontheir credit cards increased dramatically prio

to the reforms taking effect earlier this year.

Page 3Payers & Providers

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NEWS

In Brief

Donald Crane of the CaliforniaAssociation of Physician Groups.Other board members includeHoward Kahn, Chief ExecutiveOfficer ofL.A. Care Health Plan,and David Joyner, senior vicepresident ofBlue Shield ofCalifornia.

"Our underserved andvulnerable populations and theeligible providers and hospitalswho care for them are especially inneed of these vital services andwill be a priority, Lansky said.

Hewitt: Long-Term Healthof Employees Given

Focus Over Cost Control

A new survey by Lincolnshire, Ill.-based Hewitt & Associates claims

that U.S. employers are far morefocused on the long-term health oftheir employees than oncontrolling costs.

According to Hewitts surveyof some 600 large employers, 65%said they are currently investing inlong-term plans to maintain orimprove the health andproductivity of their workforce. Bycontrast, only 32% say they areprimarily focused on controllingtheir healthcare costs.

However, costs remain a hugeconcern, with 95% of companiessaying that managing costs in a topbusiness issue. According to

Hewitt, the average per-employeehealthcare cost rose from $4,793in 2001 to $11,058 in 2010.

Employers know they arentgetting results using traditionalapproaches and are takingsteps to reverse that trend, saidJim Winkler, who heads Hewittshealthcare practice. However,they still have a lot of work to doto get on a path where theyll seepositive, sustainablechanges that really move theneedle.

four western states. Thirteen of its facilitiesare in California.

Blue Shield is particularly interested inthe project because it has a largeconcentration of enrollees in CentralCaifornia.

The reason for our collaboration is totryto improve quality and lower costs inthese markets, said Michael ONeil, BlueShields director of healthcare value. Headded that the target for each hospital wouldbe to perform in the top 10% of hospitals

nationwide. The results will be made availableto the general public, ofcials said.

"California purchasers and consumers wiselect higher quality providers when they havmeaningful data to help them make theirchoice, said Ken Stuart, who chairs theCalifornia Health Care Coalition, a collectionof employers with about 4 million workers.

Savings from the project, which does nothave a specic budget, could be used tonancially incentivize the hospitals to improvcare even further, ONeil said.

Quality (Continued from Page Two)

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Payers & Providers Page

Everyone alienated by the compromises toextract health reform legislation out ofCongress, take heart. There's a sleeper inboth the House and Senate bills that coulddo more to promote health inthe long run than any of thecoverage we might get.

Both bills address long-term disease prevention andhealth promotion withinnovative strategies andstartling amounts of funding.The House appropriates $15.4

billion over five years, theSenate over $7 bil lion. Thislevel of federal investmentnibbles at the historicimbalance between spendingfor medical services andspending that averts the needfor them in the first place.

Prevention is familiar: eatright, exercise, stop smoking. Itusually means individuals resolve tochange their behavior to improve theirhealth. New prevention strategiesunder this reform include: a yearly

personalized prevention plan forMedicare patients; national assistance towellness programs at the worksite; a vastpublic-private partnership under Healthand Human Services Secretary KathleenSebelius to teach everybody aboutprevention and health promotion,including website tools for self-assessmentand personalized prevention. Stateswould be required to teach Medicaidpatients how to reduce their risks forchronic disease, like diabetes. Federalprevention activity will particularly targetnutrition, physical activity, smoking

cessation, obesity reduction, mental andbehavioral health (including substanceabuse), and domestic violence.

The most far-reaching innovation in thebills is support for community-basedprevention and health promotion. Thisrefers not to individual choices but togovernment policies that can affect thehealth of many people at once. While thisapproach is familiar (no-smoking rules,seatbelt mandates, calorie counts onrestaurant menus), the bills reach a new

level. Community Health Transformationgrants will seek improvement in the socieconomic, and physical environments thacan have broad effects on the health and

disease of populations. Twould mean new money toaddress, for example, thepollution, violence, lack oparks, loss of neighborhoocohesiveness, and absencehealthy foods in low-incomcommunities lackingsupermarkets but overrun

convenience stores. Onlycommunity-level interventcan diminish such problemHealth professionals haveknown for decades that ifhealthy choices are unknoinaccessible, unaffordableencouraged or ineffective

the personal level, they wonhappen. If the policies for individuacommunity prevention and healthpromotion in the health reform billssurvive, long-term potential to enriclives and reduce costs could increas

dramatically. As county and state healthdepartment directors from all know and hargued for years, the changes that willlengthen and enhance quality of life requin the words of one of them, resources,authority, and charm.

So, should reform be enacted into lawthe federal government could be steppingwith the resources. This would give the reus the chance the responsibility, even start thinking about making our communisafer, cleaner, more walkable, loaded wnutritious foods, full of opportunities forinteraction, participation, contribution by

types of residents in short, healthier.

OPINION

Could Reform Take The Long View?Both Bills Set Aside Billions For Preventative Care

By

Lucy

Johns

Lucy Johns is a healthcare planning and

policy consultant in San Francisco. She m

be reached at [email protected].

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Payers & Providers, Issue of March 11, 2010

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