Execs say California health care reform inevitable

Health care reform will happen in California regardless of whether the federal Affordable Care Act is upheld by the U.S. Supreme Court , Sacramento-area health care leaders said Friday.

Other panelists were Pat Brady, chief executive officer of Sutter Roseville Medical Center; Garry Maisel, president and chief executive officer of Western Health Advantage;  Ann Madden Rice, chief executive officer of UC Davis Medical Center; Darryl Cardoza, chief operating officer of Hill Physicians Medical Group; and Trish Rodriguez, senior vice president and hospital chief executive officer for Kaiser Permanente in South Sacramento and Elk Grove.

Everyone is affected by the rising cost of health care, including employers, Rodriguez noted. After wages, health care benefits are the second largest operating cost at Kaiser Permanente itself, she said.

Doctors, hospitals and health plans will have to work together to go the same direction, the executives said. And it will take shared resources to get there because trends in health care — regardless of the fate of the reform law — will mean more demands on the industry and lower reimbursements, speakers agreed.

The key will be a switch from a medical rescue system that fixes problems to a health care delivery system that keeps people healthy and provides more care in less-expensive outpatient settings, Cardoza said.

Money is a growing problem: more costs are coming and reimbursement will drop.

  • While more people will have coverage when health insurance exchanges start in 2014, Medi-Cal enrollment is expected to climb. The government health care program for the poor has one of the lowest rates in the nation and reimbursement from Medicare — the government health care program for seniors — is slated for huge cuts.
  • To make ends meet while serving more patients, all parts of the health care system will have to cut costs and be more efficient.

One unknown is the health of the millions of new patients who will get coverage in two years.

  • “We do know these people; they are accessing our health care system now through ERs,” said Rodriguez of Kaiser Permanente. “We have an opportunity to do it in a more controlled environment, and I’d make sure these individuals are seen in primary care physicians’ offices.”

There will have to be more doctors to make that happen.

“If you look at Massachusetts (where universal health care is already in place), it used to take 16 to 18 days for a non-urgent internal medicine appoint,” said Rice of UC Davis Medical Center. “It’s gone one up to six weeks.”

  •  Three-quarters of the counties in California have fewer than 60 primary-care doctors, she said. The UC Davis School of Medicine — and other medical schools — can churn out more doctors, but there aren’t enough residency spots to accommodate them, Rice said.

“The individual market will look nothing like it does today; the small group market will change, too, but not as much,” Maisel said of the industry in 2014.

  • “Now it’s business to business, through brokers. It’s going to be a business-to-consumer model.
  • The buying decision will no longer be at the employer level, but at the individual level.”

Contrary to perceptions that the cost of health care will go down in 2014, Maisel thinks they’ll go up in the short-term because of demand and slow changes to the delivery system.

  • “In 2014, a lot of individuals think they’ll suddenly go out and buy affordable health care,” he said. “I think there will be sticker shock.”

This article is modified from a Sacramento Business Journal Article published March 2, 2012

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