Governance and Start-Up in a Public Plan Howard Kahn October 13, 2010

1. Governance and Start-Up in a Public Plan Howard Kahn October 13, 2010

2. Experience with Two Public Plans in California • One is a public monopoly. • One is competitive with private plan.

3. California’s Public Plans • Core attributes of public plans in CA (serve Medicaid enrollees, safety net protection, stakeholder board, lower admin costs, etc) create: • Transparency • Level playing field (more or less) • Quality and efficiency

4. Managed Care Market Models – COHS, GMC, and Two Plan • Expansion of Medi-Cal managed care models • County Organized Health System (COHS) – locally organized for specific regions • Geographic Managed Care (GMCs) - State contracts with several plans in a specific region • Two Plan Model – Competition in counties with developed health systems

5. L.A. Care Product Lines • Medi-Cal • Plan Partners network • Direct provider network • Healthy Families (SCHIP) • Healthy Kids • Medicare Advantage Special Needs Plan (SNP)

6. L.A. Care’s Mission “To provide access to quality health care for Los Angeles County’s vulnerable and low-income communities and residents, and to support the safety net required to achieve that purpose.”

7. L.A. Care – Not Just an HMO • Focus on strengthening health care safety net • Community-accountable – public advisory committees • Community investments and leadership to improve community health • Health policy leadership …but is also an HMO that is performing well.

8. Formation and Governance • Established by enabling legislation in 1994 • Public Agency, independent from county • Separate Health Authority - Local Initiative- Brown Act provisions- Community/stakeholder input • 13 member stakeholder Board

9. Stakeholder Board Composition • 4 - Representing Los Angeles County (including a Board of Supervisors representative) • 2 – Private hospitals (with and w/out Medicaid DSH) • 1 – Free and community clinics • 1 – Federally Qualified Health Centers • 1 – Physician representative • 1 – Children’s health care provider • 1 – Knox Keene licensed health plan • 2 – Health care consumers

10. Advisory Groups • Technical Advisory Committee • Children’s Health Consultant Advisory Committee • Regional Community Advisory Committee (11) • Executive Community Advisory Committee

11. Licensure • Knox Keene (HMO) licensed April 1997 • Fiscal solvency/TNE requirements • Creates level playing field among participating health plans • Oversight by Department of Managed Health Care and Department of Health Care Services

12. Health Plan of San Mateo • Licensed as a Health Insuring Organization • Exempt from Knox-Keene licensing requirement • Operational in 1987 • Eventually was licensed • Medicare SNP that competes with private plans

13. Start-up Financing • L.A. Care - Plan Partners, County, State, and lines of credit • Health Plan of San Mateo - hospitals, county, HFFA, grants, loans

14. Questions