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Follow the Leader: Kaiser as the Prototype for Community-Based Provider Evolution

Follow the Leader: Kaiser as the Prototype for Community-Based Provider Evolution. Hector Flores, MD Chairman, Department of Family Medicine Adventist Health White Memorial Medical Center May 8, 2019. Disclosures/Affiliations. Board of Directors, Blue Shield of California

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Follow the Leader: Kaiser as the Prototype for Community-Based Provider Evolution

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  1. Follow the Leader: Kaiser as the Prototype for Community-Based Provider Evolution Hector Flores, MD Chairman, Department of Family Medicine Adventist Health White Memorial Medical Center May 8, 2019 (c) Family Care Specialists 2019

  2. Disclosures/Affiliations • Board of Directors, Blue Shield of California • Board of Directors, The California Endowment • Board of Directors, LA County Medical Association • Board of Directors, Integrated Health Healthcare Association (c) Family Care Specialists 2019

  3. Key Questions • Why is Kaiser considered an industry leader? • How is everyone else imitating Kaiser? • Why is there a safety net? • Can the safety net become Kaiser-like? • Should Kaiser become safety net-like? • Why should we care? (c) Family Care Specialists 2019

  4. USA 2050 • Total population expected to be 405 million • National debt at $30 Trillion? • Annual health care expenditures at $12 Trillion? • 30-40 million uninsured • Medicare – about 92 million recipients expected; $3.5 Trillion • Hospital Trust (Part A) goes bust in 2026? All bust 2040? • Medicaid (Medi-Cal) – about 100 million recipients expected; $2.5 Trillion • What should Congress do? Source: U.S Census Bureau and CMS Office of the Actuary and Medicare Trust 2017 (c) Family Care Specialists 2019

  5. Sign of Things to Come: USA Vital Signs for Health (IOM) • Best Care at Lower Cost 2012 • Vital Signs: Core Metrics for Health and Health Care Progress 2015 – among fifteen measures, includes Individual Engagement Healthy Communities Community Medical Costs Population Spending Burden • What should Congress do? (c) Family Care Specialists 2019

  6. Aging Population: California’s “Burning Platform” California Future Healthcare Workforce Commission 2018 (c) Family Care Specialists 2019

  7. Reality: LA County’s “Non-System” of Care BOS Private Sector $70 Billion MetroCare, EMS, Trauma, PSIP LAC DHS $12 Billion PPP, MHLA 150 Private Non-Profit Clinic Sites Private For-Profit Med Groups Private Hospitals (120) Public Health Mental Health County Hospitals (4) County 2 MACC 35 DSH Hospitals MLK Community Hospital Six Comp Centers Insured Uninsured (c) Family Care Specialists 2019

  8. Special Funding to Subsidize the Uninsured (Besides Cost-Shifting) Government -- Hospitals (DSH), GME Medicare Hospitals (DSH), Supplemental Pay, GME Medi-Cal FQHCs (cost-based) County Systems Out-of-Pocket Community Benefit obligation of non-profits Charity Care Uninsured Private Doctors ER Call Panel Stipends Medical Directorships Indigent Care Hospitalists Direct & Indirect Subsidies (c) Family Care Specialists 2019

  9. Back to the Future:Managed Competition*, 1994 • Consumer Choice of Competing Health Plans • HMOs and PPOs • Competition Based on Cost and Quality • Active Role of Health Care Purchasers e.g., PBGH Cal-PERS CMS State DHCS Covered California *Source: Enthoven, NEJM 1989 (c) Family Care Specialists 2019

  10. Kaiser Southern California Kaiser Health Plan SC Kaiser Foundation Hospitals and Clinics SCPMG 5,000 Partners 1,500 Employees 1,000 Per Diem/Contract 15 Hospitals (c) Family Care Specialists 2019

  11. The Imitators in LA County: IPA/Network HMOs 20,000 MD/DO in LA County 100 Hospitals PPO/FFS & Uninsured Patients (c) Family Care Specialists 2019

  12. ACA: Managed Competition and Insider Politics (c) Family Care Specialists 2019

  13. “Free” Market Unseen hand of Providence Unseen fist of Special interests v. (c) Family Care Specialists 2019

  14. HEALTH POLICY CONTINUUM (c) Family Care Specialists 2019

  15. Announcing the Guidelines for ACA, 2009 (c) Family Care Specialists 2019

  16. Kaiser Model: Smart Policy and Politics • Prepayment allows better allocation of resources • Integrated medical group and Integrated health system • Peer review is alive and well • Longevity of membership with Kaiser allows for long-term investment on population health • Hospitals and medical group are “cost centers” • Political cover • Non-profit health plan Unions No-frills, essential EBM care & investment Unions, AHIP, CMA, CHA Preferred by elected officials and Unions, Community Benefit & strategic grants (c) Family Care Specialists 2019

  17. Managed Care 2.0 – Imitator or Innovator? IT, EBM, Big Data & AHIP Community Benefit, CMA Unions, Community Benefit, AMCs & CHA HMO/FFS & Uninsured Patients Post-Acute Care Coordination & Outpatient Shift (c) Family Care Specialists 2019

  18. Shark Tank 2019ACA or Medicare-for-All? And who will pay? Future of Medi-Cal and Exchanges (Covered CA)?California Single Payer? (c) Family Care Specialists 2019

  19. California 2011: The Costs at $231 Billion 37.5 Million People $180 B Covers 22 M • Marketplace shift from HMO to PPO • High employee contribution to premium • High deductibles • High co-pay $43 B Covers 7 M Economic Stimulus & ACA: Increased the number of FQHC and FQLA by 20% as of 2011 (585 to 720 sites) Medi-Cal Waiver: “The Bridge to Reform” MCE + SNCP, LIHP subsidizes uninsured $8 B Gen. Fund 19 Source: www.statehealthfacts.org2011, CHCF 2010, DHCS 2015 (c) Family Care Specialists 2019

  20. California 2016, A Tale of 4 “States”: The Costs at $377 B 39.5 Million People $250 B Covers 23 M Why costs increased: ACA Essential Benefits; cover young adults to age 26 y.o., Employer Mandate; Individual Mandate; Profiteering $7 B Exchange 1.4 M Covered California Eligibility 138% - 400% FPL Metal Mania, Family Glitch > 400% FPL at the mercy of the marketplace $116 B covers 13.5 M Economic Stimulus & ACA (2009 – 2016): • FQHC/FQHC-LA nearly tripled (1,450) • Medi-Cal Expansion 90/10, Regular Medi-Cal 50/50 • SB 75 covers undocumented youth to age 18 y.o. • Medi-Cal Waiver subsidizes residual uninsured $4 B Pays for 3M 20 Source: www.statehealthfacts.org2011, DHCS 2018 (c) Family Care Specialists 2019

  21. Time for Medicare for All? or MedicareAdvantage for All? 40 Million People 2020 Insurance, Medicare 60% $377 Billion** + $22 B (individual, employer tax deductions) + $ 15 B (Community Benefit tax credits for HMOs, hospitals, other non-profits) Exchange Insurance 5% Medi-Cal, SCHIP State-Sponsored Programs 33% Uninsured 2% 21 Sources: Select Committee on Health Care Delivery Systems and Universal Coverage 2018; ** Over-utilization, Brookings Inst. 2015 (c) Family Care Specialists 2019

  22. Shark Tank 2050Who’s model will prevail? And who will pay? – Single Payer? Single Payment? (c) Family Care Specialists 2019

  23. Principles to Lead By:The Four Agreements(Miguel Angel Ruiz, MD) • Be impeccable with your word • Take nothing personally • Do not make assumptions • Always do your best (c) Family Care Specialists 2019

  24. “To dream is to create the Future” Victor Hugo (c) Family Care Specialists 2019

  25. Thank You!Questions? FloresH1@ah.org (c) Family Care Specialists 2019

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