A top official looks at health care in California

At the epicenter of the health-care discussion in California is Diana Dooley, Gov. Brown’s Secretary for Health and Human Services and the chair of the landmark Health Benefit Exchange, the mechanism that will push ahead federal health care reforms in the state. Capitol Weekly’s Greg Lucas sat down with Dooley last week for an extensive interview.

CW: When you give speeches and people ask what is the state of health care in California, what’s your answer?

DD: I haven’t been asked that question quite like that. The state of health care — I don’t want to parse it too much — the state of health in California is pretty good. We consistently rank above the median in outcomes like infant mortality and some of the other key measures but knowing what to measure is precisely the reason I suggested and the governor agreed to appoint the Let’s Get Healthy California (advisory board) to look at all the different measures. Our task is to pick a measure that we think will tell us how healthy California is and then set a target so that at the end of the decade we can reach our goal is.

CW: So what do you use as yardsticks?

DD: It’s always difficult to determine what you’re going to measure because everybody, like Garrison Keillor says, wants to be above average. This is one of the big challenges of the Health Benefit Exchange’s work is creating a marketplace that clearly and transparently explains what the costs are, what it is you’re buying and what are you going to get for that.

It’s very opaque right now. It’s hard for people to understand. So we’re going to measure outcomes, we’re going to measure access and we’re going to measure cost so people can make a value calculation.

CW: Out there in the marketplace

DD: Well, we call this a marketplace of health care but it doesn’t operate like any economic market where you’re actually buying the product. You’re buying the insurance and the insurance company is negotiating the rates of your care. I don’t go and get a bill from my doctor that I pay, my insurance company pays it. But it doesn’t operate like insurance in a lot of ways either because I don’t want my house to burn down to use my homeowners insurance. I don’t expect to make a claim. I’m really happy if I don’t make a claim. But in health care it’s a lot like a pre-paid benefit.

You expect to get your money’s worth but most people expect to get more than their money’s worth. Nobody wants to be part of the population that’s making the investment but doesn’t use the service. And yet that’s how insurance works. That’s how risk pools work.

You want to have some healthy people that don’t have a need but if they have one at some point the coverage is there for them. We spend an awful lot on health care where we’re not buying the care directly but buying the insurance. Rarely do we really stop and look at what the out-of-pocket expense is and what we’re getting for it. Of course that’s only an issue for the 85 percent that do have insurance. Most of the health care reform conversation is around the 15% that don’t have insurance.

CW: Who is that 15 percent?

DD: Either they’re unemployed or they’re self-employed or contractors. I don’t know the profile of the uninsured. I think there’s a lot of movement. They have insurance sometimes and then they don’t. They don’t elect to insure their dependents because the cost is too much. There’s a variety of factors.

CW: What are the biggest fears out there about the Affordable Care Act?

DD: A lot of people are afraid that it’s going to change something they already have. In a time of instability with the economy, people are nervous, nervous that they’re going to lose what they already have. That’s one of the things that the act tried to address right from the top. That you can keep the plan you have. It’s not going to affect anything about the plan you have.

If people get over that fear then they’re worried it’s going to somehow cost them more, both individually and collectively. Its hard to understand how the federal government – cause this is all federal money – can make this investment and there’s not going to be an adverse consequence. Most of that worry, sadly from my perspective, just comes from the antipathy that people feel about government more broadly typified by what I thought was the kind of crazy arguments raised during the debate over (the Affordable Care Act) itself. Like “Keep government out of my Medicare.”

CW: Medicare being a government program.

DD: A government program that they like and, if they like it, it can’t be government. It’s like HMOs. HMOs are bad but people love Kaiser. Kaiser is the largest, longest lasting HMO but no one would put HMO on Kaiser because people like it. One of the themes of the Affordable Care Act is we need more coordination and integration of care. That’s what managed care should be. What managed care became was only an economic incentive on the payer’s part to maximize profit. Everybody is making profit on health care. Something like 85 percent of our hospitals are nonprofit but they all operate at a margin and make money and they reinvest that money in the communities. Physicians are in the business to make money. Pharmaceuticals are in the business to make money. Device manufacturers. Its not just the health plans.

CW: Talking to fee-for-service advocates they’ll say intrinsically there’s nothing wrong with managed care. The chief complaint they raise is the transition from fee-for-service to managed care.  How can you make the transition easier?

DD: It’s going to be hard. Any change is difficult. We’ve made the transition (in Medi-Cal) with seniors and persons with disabilities a year ago. It’s gone relatively smoothly. Some places people haven’t been able to get their same doctors —

CW: Or the right meds –

DD: But we’re working that out. The department (of Health Care Services) itself had a survey of about 5,000 people where 85 percent were at least as happy or happier with their managed care services. They had more access, more responsiveness, better care than they had trying to shop around for a fee-for-service physician. That’s one thing we’re working on is to hold the plans accountable for having networks that get patients the care they need.

CW: What’s health care delivery going to be like five years from now?

DD: The opportunity for more people to get basic care through the Affordable Care Act is going to encourage reform in the delivery system that we could never have really designed by government regulation in terms of how the doctors and medical professionals are going to treat patients. Because they’re going to have so many patients with needs, they’re going to change their own delivery of medicine with physician extenders, with more nurses and nurse practitioners with pharmacists, with acupuncturists. There’s going to be so much demand in the marketplace that we’re going to have some of this consolidation, integration, coordination of care because we’re going to have capacity challenges we can’t meet any other way. I think people’s expectations of the care they need and the care they’ll get will move them to managing their own care.

An example I use is mammograms. A report came out a few years ago on who needs a mammogram based on your per
sonal history. I don’t really need an annual mammogram based on my history and my family’s history. But the first time I skipped I was so nervous because the advertising for annual mammograms is so intense I was nervous not to do it. As the capacity is absorbed by more people having coverage we may see some change in the advertising or the recommendations.

CW: Are Medi-Cal reimbursement rates going to go up?

DD: Not anytime soon. That’s,  in part, why we’re moving from fee-for-service to managed care so we can have a population that needs care, manage it on a per member rate and care for that whole person. Providers may extend more care to some and less care to others based on their need.

CW: Right now one in five Californians are on Medi-Cal. We’re going to go to one in four over the next four years. How does that change the way  health care is provided in California?

DD: Whatever the expansion turns out to be, the idea of universal coverage both through an expansion of Medi-Cal and the products sold on the Exchange with a subsidy so as close to everybody as possible will have what I call health security means the people who are very expensive in the system now – the uninsured – will cost less to keep or make healthy. I call it health security instead of health coverage because that’s really what it is — knowing that you’re not one major illness away from bankruptcy.  So with that expanded coverage those people who aren’t getting preventative care, who aren’t getting planned care because they’re uninsured and are only being treated in clinics and emergency departments when they have health crises where there’s no reimbursement for the care will receive more effective care. Their costs won’t be shifted onto the commercial plans to the same extent. If you can manage that care for those people at la lower cost because you’re going to get them when they’re not in crisis you’re going to cut down the cost in the emergency room, which is the most expensive care that is delivered. I don’t think it’s reasonable to suggest we’re going to lower health care costs in the future but I hope we can reduce the rate of growth in those costs.