More than 20 percent of Californians—or 6.8 million people—are
uninsured. Read Jim Lott’s perspective on universal coverage and
public services for the state with the largest uninsured
population in the country.
Jim Lott is the executive vice president of the Hospital
Association of Southern California where he is responsible for
health care policy development, advocacy, and association
communications for hospitals serving Los Angeles, Orange, San
Bernardino, Riverside, Santa Barbara, and Ventura Counties.
This will be my last post, as I am leaving HASC at the end of
next month. Health is fine, work is great, just moving on
to the next chapter of my life, which will be in health care…what
else would I do?
I have enjoyed writing this blog, and I thank all of you who have
told me that you like reading what I write. I will truly
miss doing this.
Again, I’m still at HASC until May 31, so drop me a line or
call. After I leave, you may reach me on my cell at
213-324-3262 or by email at JLottSr@me.com.
The Society of Actuaries
(SOA) recently predicted health insurance costs in the individual
market would increase 32% by 2017. Not good news,
especially considering that the blame for this increase was
placed at the doorstep of the Accountable Care Act (ACA).
Contrary to the expectations of those who developed the new
reform laws, the SOA asserts that this increase is in part due to
the poor health status of the new enrollees now eligible under
the ACA.
In my last
blog, I summarized
the plan to move Medicare/Medi-Cal-covered patients residing
in eight California counties into a system of coordinated
care. The move would make California the fifth
dual-eligibles coordinated care project in the nation. In no
particular order, the following demographics about plan enrollees
worry me:
Last week, federal and state officials released their
long-anticipated Memorandum of Understanding (MOU) implementing a
three-year effort to lower costs and improve the coordination of
medical care provided to nearly half a million California seniors
who are enrolled in both Medicare and Medi-Cal. If approved
by the feds, passive enrollment of program beneficiaries over a
12-to-18-month period will start in seven counties (Orange,
Riverside, San Bernardino, San Diego, San Mateo, Alameda and
Santa Clara) in October. What this means is that the
dual-eligible program beneficiaries
Starting in January, the federal Affordable Care Act (ACA) will
require all residents to secure health insurance or pay a $95 tax
penalty, assessed only if the filer qualifies for a federal tax
return.
A belief I regard highly is, “That government is best which
governs least,” a quote historians have attributed equally to
Henry David Thoreau and Thomas Jefferson. Mind you, the
operative meaning or the verb infinitive in the quote is “to
govern.” Few who have been paying attention to the gridlock in
our nation’s capital give high marks to our elected
representatives for meeting this core job requirement. In
fact, one credible poll gives Congress an approval rating of only
14 percent, with the Obama Administration receiving only slightly
higher marks.
I learned what that meant when as a third grader my mother moved
me to a private Catholic school from an economically depressed
inner-city public school where 70 percent of the students never
made it to high school graduation and where the majority of those
who did were sub-literate.
The federal health care reform law enacted in 2010 – the Patient
Protection and Affordable Care Act (PPACA) – excluded illegal
immigrants from eligibility for inclusion under its expanded
health insurance coverage provisions. Now it would appear that
health coverage for these immigrants will not be in the
immigration reform plan the White House and Congress will likely
hammer out later this year.
In California, 54 percent of health care coverage provided to
residents under 65 is sponsored by our state’s employers, down
from 61 percent prior to enactment of the federal law in 2010.
Last week, the nonpartisan Congressional Budget Office (CBO)
advised Congress that seven million fewer Americans were forecast
to have employer-sponsored health insurance in 2022 due to the
federal Patient Protection and Affordable Care Act (PPACA). The
estimate is up from August, when the CBO predicted a drop of four
million people with employer-sponsored plans.
Last week, the Internal
Revenue Service (IRS) and the Health and
Human Services Agency (HHS) published rules governing the
individual mandate that, according to
HealthLeaders Media, “include such extensive exemptions that
only 2% of the population would owe a penalty, or ‘shared
responsibility payment’ for not having coverage under a health
plan.”
A prominent retirement investment planning firm cites two
lifespan statistics in its advertising campaign that, if true,
will stun to death any efforts to rein in the aggregate growth of
what we spend as a nation on health care. “One in three
people born today will live to be 100 years old,” says one
billboard. “The first person who will live to be 150 years
old is alive today,” says another. Thought-provoking ads,
both, and the health care cost implications of such a trend are
breathtaking.
Medicare cost the federal government $528 billion in 2010.
Current projections place that funding level above $1 trillion in
2020, and that’s after deducting $45 billion in payment cuts per
year to providers and Medicare Advantage plans during that
period, as ordered by the federal Patient Protection and
Affordable Care Act (PPACA).
With some exceptions, the federal Patient Protection and Affordable Care Act (PPACA) enacted in 2010 requires everyone to get health insurance or pay a fine. The individual mandate contained in the act takes effect in 2014 and levies fines for failure to document coverage at the greater of $95 or 1 percent of annual income capped at $285 (triple the flat rate) for that year. After that, the penalty will grow until it reaches a ceiling in 2016 of the greater of $695 or 2.5 percent of annual income capped at $2,085.The IRS will be the compliance authority, and the agency is empowe
Once a year for the past seven years, our community of hospitals
in Southern California comes together to honor the most giving of
themselves, the laborers of the planet. Okay, so we are a
little biased about the people working in our hospitals. Here are
but five of the extraordinary people we honored last week along
with their stories.
Our first award went to a nurse and social worker on the front
lines of a busy hospital who teamed up to fix a problem that
plagues emergency rooms everywhere … frequent fliers.
One of my most vivid childhood memories was when, as a teenager,
I broke my arm playing softball at school. The pain was
excruciating, but it was the quest to get medical treatment for
my fractured appendage that is most memorable. The private
hospital closest to my school in South Central Los Angeles turned
my mother and me away because I had no medical insurance.
As a consequence, with my arm resting on a clipboard, we had to
take a very long bus ride to the county hospital in East Los
Angeles where I finally received treatment after enduring many
hours of extreme pain.
I’m not quite sure when it started, but many observers knew
something was wrong when the Orange County Board of Supervisors
passed an ordinance making CalOptima the only Medi-Cal agency in
California forbidden to participate in the California Health
Benefits Exchange, the agency established to manage health
insurance for newly insured individuals and small businesses
under the 2010 federal health care reform law. Shortly
thereafter, a successful movement started to pass another
ordinance to change CalOptima’s board of directors. Then,
the agency’s top managers started to leave in succession for
other jobs, culminating with the recent resignation of Richard
Chambers, its CEO.
In new health care landscape where inpatient volumes are falling
and Medicare, Medi-Cal and commercial payments to hospitals are
flattening and/or decreasing, radical change and major financial
investment are required by hospitals while facing the most
problematic economic outlook in 20 years.
Pursuant to legislation (SB 853) enacted last year, the
California Department of Health Care Services (DHCS) is planning
to replace the Selective Provider Contracting Program (SPCP) with
a case payment method by diagnostic-related group (DRG) for
implementation by July 1, 2012. To that end, in
consultation with a workgroup convened by the California Hospital
Association, the department is gathering input on the design of a
Medicare-like DRG payment method. The workgroup is
scheduled to complete its work in November, 2011, at which point
the DHCS will review all recommendations and make final
decisions.
Congress may have rejected a public plan option for private
health insurance coverage, but the California Legislature gave it
new life with its passage of legislation to implement the federal
health care reform laws.
In slightly more than 7 years from the posting of this blog
entry, the Hospital Insurance Fund (Part A) for Medicare will go
bankrupt, according to the federal Centers for Medicare and
Medicaid Services (CMS). Why, then, are the Democrats in the U.S.
Senate proposing to expand the program by lowering the age of
eligibility from 65 to 55 years as part of a compromise to secure
passage of its health care reform bill?
Legislators and governors in many states intend to shepherd some
form of health coverage expansion along in the next year. In
California, Governor Schwarzenegger has introduced an ambitious
plan that would make insurance coverage mandatory. Fees would be
imposed on physicians, hospitals and businesses to help expand
coverage, while low-income and uninsured individuals would
receive subsidies to purchase insurance.
The race is on! Not since 1992, when President Bill Clinton
turned over the task of building a universal health plan for all
Americans to Hillary, has anyone in the know felt that a major
health care access and restructuring plan was forthcoming. Given
the results of last month’s election, though, once again the
pundits believe that real change is coming.
Though it is the association’s policy not to comment on criminal
investigations, “we are dismayed by the City Attorney’s decision
to use his prosecutorial authority against hospitals to address
the problem of homelessness,” said Jim Lott, Executive Vice
President. “It seems to be a rather excessive, pernicious
approach to solving a problem that hospitals have agreed needs to
be addressed and are addressing,” Lott continued.
Though no statistics are kept on the numbers of homeless treated
by hospitals, 76 hospitals with emergency rooms are the medical
safety net for the estimated 80,000 homeless residing in the
county, including the almost 1,200 who congregate on the streets
of Skid Row in downtown Los Angeles. In fact, these hospitals are
required by law to receive, treat and stabilize any of the
County’s almost 3 million uninsured residents who present with
life-threatening illnesses or injuries, and they meet this
obligation at a collective financial loss of approximately $1.6
billion annually.
In most economic markets, supply and demand are the principle
economic forces at play. This is a bit more complex in the U.S.
health care market, where the economic forces driving health care
are supply, demand, fear and greed.
Too many illegal immigrants are overwhelming the healthcare
system and driving up health insurance costs. That’s the latest
sound bite in the war of words over immigration reform. In a
recent poll, a majority of the respondents thought that illegal
immigrants were responsible for 50 percent or more of the
uninsured treated in Southern California hospitals. But is that
really the case?
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