Whistleblower Prompts Health Plan Sale Review

The California Department of Managed Health Care (DMHC) will hold hearings in June on the $1.25 billion bid by Blue Shield of California to acquire Care1st health care system based in Monterey Park, California. The review comes after a former Blue Shield executive, Michael Johnson, and several consumer groups complained to the state agency about the planned acquisition.

Originally announced in December, the purchase of Care1st would move Blue Shield of California into a new health care niche, since the company has not previously participated in Medi-Cal, the state’s Medicaid program for low-income residents. Care1st has more than 500,000 patients, with 473,000 people in Medicaid managed-care plans and 46,000 Medicare patients, primarily in southern California.

San Francisco Business Times reporter Chris Rauber wrote this month that the June 8 hearing by the state regulator of HMOs is sure to attract health care critics, including Johnson, Consumers Union, Health Access, the Western Center on Law & Poverty, as well as the California Public Interest Research Group.

In responding to questions about the planned hearing, a Blue Shield of California spokesperson told Rauber, “We welcome the opportunity to share how the acquisition of Care1st furthers our mission by serving Medi-Cal beneficiaries and to answer any questions the DMHC may have.”

Johnson, a former public policy director at Blue Shield, has suggested the insurer has misused its non-profit status and should convert to a for-profit company. The California Franchise Tax Board pulled the tax exemption of Blue Shield of California last August, but news of the decision remained unreported until earlier this year. Blue Shield is appealing the tax board decision and has said it remains committed to staying a non-profit insurer.

California Exchange Cuts Spending, Hawaii Shutting Down

Covered California, the Golden State’s public health insurance exchange, unveiled its proposed budget for fiscal year 2015-2016 last week and it is calling for reduced spending and enrollment of 1.5 residents in the next year. After spending most of $1 billion in federal start-up funds in the past two years, the future looks less rosy for the country’s largest state-based health insurance marketplace.

The proposed $332.9 million budget, to be reviewed and finalized by the exchange board of directors in June, calls for Covered California to transition to relying solely on the $13.95 monthly fees it collects from health insurance companies on every sold policy and reserves it has saved while operating on federal funds. The new fiscal year starts July 1.

“In the last two years, we established a solid foundation, and we are confident as we transition now from startup mode to ongoing operations,” said Covered California Executive Director Peter V. Lee. “Covered California is changing lives and giving consumers affordable access to the best doctors and hospitals in our state. As we move ahead, we are glad to have the resources we need, and we will continue to work to bring affordable health coverage within the reach of all Californians.”

Overall, the new budget represents a cutback of $58 million when compared to the current fiscal year’s projected expenditures. The specifics include a $121.5 million outlay for outreach, sales, and marketing – a 33 percent reduction from the current year. The forecast for enrollment in 2015-2016 is 1.5 million enrollees. The state ended its 2014-2015 open enrollment in February with 1.4 million participants, far short of the original target of 1.7 million. 

Across the ocean, managers of the Aloha State health insurance exchange are looking for cash to shut down their program. Governor David Ige signed a bill this month authorizing $2 million for the Hawai’I Health Connector; that amount is just 37 percent of the $5.4 million exchange managers had sought. The new funds will be used to transition Hawaii’s exchange to the U.S. Department of Health & Human Services (HHS) in time for the 2016 open enrollment period, which begins in November 2015 (and continues through January 31, 2016).

Americans Concerned About Fairness in Health Care Case

A new Associated Press-Gfk poll finds just one in 10 Americans is highly confident the U.S. Supreme Court can rely on objective interpretations of the law in ruling on the challenge to the Affordable Care Act (ACA). In the poll, 48 percent are not confident in the court’s ability to be impartial, believing instead that personal opinions will play into their decision.

The U.S. Supreme Court heard oral arguments in a challenge to the health care law in March; a ruling is expected in June. The King v. Burwell case centers on whether or not the ACA bars financial assistance to low- and moderate-income residents of states that rely on the federal health insurance marketplace, healthcare.gov, rather than a state-run exchange.

If the justices side with the plaintiffs in the case, an estimated eight to nine million people across more than 30 states could lose their health insurance premium subsidy and would likely be without future health insurance.

In an unexpected twist to the poll, those opposed to the ACA (and who are typically more politically conservative) had less confidence in the court’s objectivity. Sixty percent were not confident of an impartial ruling, as compared to 44 percent of those who support the law.

The AP-Gfk poll also found a majority wants the court to allow premium assistance to continue in all states. Fifty-six percent favor maintaining the subsidies without restriction, while 39 percent believe the financial aid should continue only in states operating their own health insurance marketplace.

What Congress may do in response to the court ruling is uncertain, but the poll found a majority (51 percent) want the law amended to make it clear Americans are entitled to assistance regardless of what their state leaders do. Forty-four percent favor no Congressional action and letting states decide whether they want to create state exchanges to serve their residents.

A Reuters survey of 1,800 Americans who have health insurance through an exchange found 60 percent in favor of the ACA, as compared to 47 percent of the survey group of 21,000 adults. Split by party line, 73 percent of Democrats favor the law, while 53 percent of Republicans give it two thumbs up.

New ACO Coming to Northern California

The nation’s largest health insurer, UnitedHealthcare (UHC), is launching a new accountable care organization (ACO) in the Bay Area of Northern California. In partnership with Sutter Health’s 1,200-physician Palo Alto Medical Foundation, UHC will work to improve patient care and delivery to more than 63,000 residents of the region who are enrolled in employer-sponsored health plans.

The ACO will help shift California’s health care system to one that rewards quality and value. Specifically, it will transition Palo Alto Medical Foundation from a fee-for-service compensation model to a value-based approach in which the organization is rewarded for achieving certain evidence-based measures, such as hospital readmission rates, disease management and prevention, patient safety, and total cost savings.

The new alliance is one of 250 new accountable care organizations UnitedHealthcare has committed to in 2015 as it engages in deeper, more collaborative relationships with physicians and hospitals nationwide. In Northern California, as reported by the San Francisco Business Times, it builds on the Sutter Health affiliate’s prior ACO networks with Cigna and Anthem, which together have 100,000 patients. Palo Alto Medical Foundation has approximately 50 locations in Alameda, Contra Costa, San Mateo, Santa Clara, and Santa Cruz counties.

“We have long partnered with UnitedHealthcare to apply our expertise in health care innovation and care coordination to improve the health of our patients,” said Palo Alto Medical Foundation CEO Richard Slavin, M.D. “Together, we can continue to achieve better health outcomes and improve patient satisfaction, while reducing the overall cost of care.”

Nationwide care providers continue to show a strong interest in a shift to value-based care. UnitedHealthcare’s total payments to physicians and hospitals that are tied to value-based arrangements have nearly tripled in the past three years to $38 billion. By the end of 2018, the company expects that figure to reach $65 billion.

Employee Satisfaction Up in New SHRM Survey

Workers in the United States are feeling good about their jobs again, according to the new Employee Job Satisfaction and Engagement Survey released in late April by the Society for Human Resource Management (SHRM). The world’s largest human resources membership organization, SHRM says the survey reflects the most significant shift in employee satisfaction in the past five years. Eighty-six percent of employees reported overall satisfaction with their jobs, up five percentage points in the past year. Job satisfaction peaked at 86 percent in 2009, and then declined in the aftermath of the recession.

“We moving away from a period of uncertainty,” said Evren Esen, director of SHRM’s survey programs. “Organizations now have more flexibility in hiring and benefit offerings, and there is a renewed focus on retaining employees. At the same time, workers are more confident in the job market and are seeking out jobs that are more compatible with their needs and wants. It all adds up to a change in how workers view their work and greater satisfaction on the job.”

What makes employees happy in their work? The survey found the top contributor to job satisfaction was “respectful treatment of all employees at all levels,” which was rated very important by 72 percent of participants. “Trust between employees and senior management” came in second at 64 percent. This was the first year these two factors were included in the survey.

“Pay is important,” said Esen, as reflected by its rank as the fourth top contributor to job satisfaction. “But workplace culture might mean more. Corporate culture and workplace relationships are held in higher esteem by workers as evidenced in this year’s survey.”

Benefits ranked as third most important, with 63 percent of survey participants saying it is very important. Except for 2012, benefits have been among the top five contributors to job satisfaction in every SHRM survey since 2002. Job security, relationship with immediate supervisor, opportunities to use skills and abilities, and immediate superior’s respect for ideas were also highly ranked.

New Analysis Reveals Good and Bad California Hospital Grades

California ranks sixth in the percentage of hospitals with a hospital safety score of A, according to The Leapfog Group, an employer-backed non-profit focused on health care quality. The Golden State has 106 A-rated hospitals of 248 facilities included in the hospital safety ratings.  That amounts to 42.7 percent of hospitals with an A-rating, as compared to 37 percent of facilities that received a C, D, or F grade.

The hospital safety score uses national performance measures from the Leapfrog Hospital Survey, the Agency for Healthcare Research and Quality (QHRW), the Centers for Disease Control and Prevention (CDC), the Centers for Medicare & Medicaid Services (CMS), and the American Hospital Association’s Annual Survey and Health Information Technology Supplement.

 Taken together, these performance measures produce a single score representing a hospital’s overall performance in keeping patients safe from preventable harm and medical errors. The score includes 28 measures, which are all currently in use by national measurement and reporting programs. Introduced by Leapfrog in 2012, the hospital safety score has been cited by The New York Times, AARP The Magazine, and other media.

Ahead of California, with a larger percentage of A-rated hospitals, were Maine, Massachusetts, Virginia, Florida, New Jersey, and Illinois. More than 2,500 hospitals were ranked nationally. The areas with the lowest percentage of A-rated facilities were North Dakota, the District of Columbia, Alaska, Mississippi, and Arkansas, three of which had no top-rated hospitals.

 Among Southern California’s highly ranked health care centers were Eisenhower Medical Center in Rancho Mirage, University of California Irvine Medical Center, Kaiser Permanente facilities in more than 10 Los Angeles and Orange County communities, Scripps Memorial in La Jolla, Hoag Hospital in Irvine and Hoag Memorial Hospital Presbyterian in Newport Beach, St. Joseph Hospital of Orange, UCLA Medical Center of Santa Monica, and Glendale Adventist Hospital.

In Northern California, some of the highest-rated facilities were Sutter Memorial Hospital of Sacramento, University of California Davis Medical Center, San Ramon Regional Medical Center, Sutter East Bay Hospitals (doing business as Alta Bates Summit Medical Center), Stanford Hospital and Clinics, Dominican Hospital of Santa Cruz, St. Luke’s Hospital of San Francisco, UCSF Medical Center/Moffitt-Long Hospitals, and a half-dozen Kaiser Foundation Hospitals. 

ACOs Serving More Than 15% of U.S.

The number of Accountable Care Organizations (ACOs) in the U.S. continued to rise in the past year, though at a slower pace than during 2013, according to a new study. Almost 70 percent of the nation’s population now live in regions served by ACOs, and 44 percent live in areas served by two or more. ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their patients.

The goal of coordinated care is to ensure patients, especially those with chronic conditions, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.

The new ACO figures come from research by the international management-consulting firm Oliver Wyman. The information is based on the Department of Health & Human Services’ announcement of the latest class of medical care facilities and groups approved to participate in ACO programs. The latest round of approvals brings the total of Medicare ACOs to 426, up from 368 in 2014 and 134 in 2013. Oliver Wyman identified an additional 159 ACOs, bringing the estimated total to 585, an increase of 12 percent from the previous year.

Key findings in the new analysis reveals about 5.6 million Medicare beneficiaries, or about 11 percent of total beneficiaries, now receive their health care from ACOs participating in ACO programs. These organizations also provide care to 35 million non-Medicare patients, about 6 percent more than last year. ACOs collectively serve between 49 and 59 million U.S. residents, or between 15 and 17 percent of the country’s population.

Few Americans Comparing Health Providers

While it’s common for many of us to go online to compare prices when shopping for electronics or other goods, and it’s not unusual to shop the neighborhood for gasoline when filling up our tanks, few Americans report comparing the quality of hospitals, health plans, and doctors according to a new report from the Kaiser Family Foundation.

Fewer than one in five surveyed by the non-partisan organization said they have seen information comparing pricing or quality across health plans and providers. Just one-third (31 percent) said they have compared doctors, hospitals, and health insurance coverage in the past year.

Among those who said they saw information about quality, only six percent used the information to compare doctors or health plans, while four percent used it to compare hospitals. With regard to pricing information, nine percent said they used data on health plan costs, while just two percent compared hospital and doctor pricing.

Bianca DiJulio, the associate director of public opinion and research at the Kaiser Family Foundation, says there could be many reasons why so few people compare plans, price, and quality. Two may be greater reliance on referrals or recommendations of friends, or picking a health care provider based on proximity to your home or office. Another may be not knowing exactly where to look for information.

The Kaiser survey found many believe it is difficult to find out how much medical treatments and procedures provided by different doctors or hospitals would cost. Almost two-thirds (64 percent) of those taking part in the survey say it’s tough to find the information they want. Among the uninsured, three-quarters (76 percent) find it challenging to get information, according to Kaiser.

Blues Association Launching Retiree Exchange

The Blue Cross and Blue Shield system, which consists of 37 independently operated Blue Cross and Blue Shield member companies nationwide, has announced the scheduled launch of a health insurance exchange that will support employers’ efforts to help retirees transition from group health benefits to individual Medicare coverage. The new exchange will begin operation on January 1, 2016.

The new retiree health exchange will offer Blue Cross and Blue Shield Medicare Supplement Insurance (Medigap), Medicare Advantage Plans, and Medicare Part D prescription drug coverage in more than 45 states and the District of Columbia.

“BCBS Marketplace will provide an intuitive and personalized shopping experience to help retirees purchase the Medicare coverage that best meets their needs,” said Maureen Sullivan, senior vice president and chief strategy officer for the Blue Cross Blue Shield Association. “This exchange will ensure that more retirees continue to benefit from the security and stability of Blue Cross and Blue Shield insurance.”

The new marketplace is also designed to help employers reduce the costs of benefit administration and support businesses that provide contributions to retiree coverage, all while providing a near-paperless process for Medicare-eligible members.

“BCBS Marketplace supports employers’ commitment to their employees by facilitating a seamless transition to individual coverage when they retire,” Sullivan said. “We look forward to bringing this solution to the employer market.”

Retiree shoppers will receive online and call center support to help simplify the transition further. The exchange also will offer additional Blue Cross and Blue Shield products such as vision, dental, and life insurance in markets where they are available.

ACA Continuing to Gain Popularity

While Americans remain divided on their views of the Affordable Care Act (ACA), according to the latest Kaiser Health Tracking Poll, published by the non-profit and non-partisan Kaiser Family Foundation, more of the country now has a favorable view of the law. This marks the first time the ACA has been viewed more favorably than unfavorably since November 2012, just after President Obama’s re-election.

Of course, the margin of favorability is low, just one percentage point, but it does mark a turning point for the ACA. Forty-three percent of those surveyed in April say they have a favorable view of the health care law and 42 percent say they have an unfavorable view. In March, the opinion narrowed to its closest margin in two years (41 percent favorable, 43 percent unfavorable).

Most Democrats (70 percent) view the ACA favorably, while most Republicans (75 percent) express an unfavorable view. Independents fall in between, with 42 percent with a favorable opinion and 46 percent unfavorable toward the law.

When asked about the cost of the ACA, following March news from the Congressional Budget Office that costs are lower than expected, half incorrectly said the ACA is costing more than projected. Just eight percent knew costs are less than originally forecasted. Two in 10 (18 percent) said it is costing the same as expected and nearly a quarter (23 percent) said they do not know. Those with a unfavorable view were more likely to say the ACA is costing more than expected (71 percent versus 35 percent for those with a favorable view).

Asked about the personal impact of the ACA, a majority of Americans (56 percent) report the law has had no direct impact on their families. Of those who say the law has had an impact, 19 percent say it has helped them, as compared to 22 percent who say it has hurt them. Until March, the Kaiser Health Tracking Poll consistently found more of the public felt hurt by the law than helped.

What’s next? The public is divided about that, too. Just under half want Congress to either expand what the law does (24 percent) or continue to implement it as is (22 percent), while 12 percent want the law scaled back and 29 percent want it repealed entirely. The Supreme Court ruling on health care subsidies under the ACA will have an impact either way. That ruling is expected in June.