7 January 2010
California Edition
Calendar
January 24-27
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Children’s Health Grades Plummet
Coverage, Oral Care Take Beating in New Survey
Citing proposed budget cuts that nearly
gutted California’s Healthy Families
program last year and a high rate of
uninsured, the advocacy group Children
Now has issued its lowest grades ever for
health coverage and oral care in the
Golden State.
The Oakland-based non-profit issued a
grade of “D
+” for
healthcare Health Oral Health
services for Coverage
the second
year in a row.
That’s down
D+ D+
from a “C-“
grade in Source: Children Now
2008, and a huge drop from the
“B-“ grade it earned in 2006 and 2007.
Children Now has been issuing annual
report cards on the condition of children in
the Golden State since 1990.
“California was one of only a few states
that moved backwards in terms of
children’s healthcare coverage,” says
Jessica Dalesandro Mindnich, Children
Now’s associate director of research. In
contrast to California, Mindnich notes that
several other states, such as Florida, New
Jersey and Oregon made efforts to expand
their children’s health insurance programs
last year.
By contrast, according to the report,
California eliminated or reduced programs
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that provided immunizations, screenings
for medical and mental health
conditions, and promoted health among
African-American infants, among others.
The report also slammed the state for
coming perilously close to eliminating
coverage for nearly 700,000 children
enrolled in the Healthy Families program.
Funding was
only restored
Asthma Infant via a voluntary
Health tax on Medi-
Cal managed
care plans and
D+ C+ an $89 million
grant from
First 5
California. Nonetheless, co-
payments and premiums went up for the
families of many enrollees.
Oral care among California’s
children also earned a “D+,” down from
the “C-“ it earned last year. Mindnich
cites cuts in funding for oral care
prevention programs in public schools as
among the reasons for the grade cut.
The decline in oral care services may
eventually impact healthcare delivery as
well, given a growing body of research
that connects oral health to medical
conditions such as diabetes and heart
disease.
Continued on Next Page
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In Brief
Schwarzenegger Slams
Reform Legislation
In his state of the state speech on
Wednesday, Gov. Arnold
Schwarzenegger roundly criticized
proposed federal healthcare reform
legislation that will soon be shaped
in final form by Congress.
Schwarzenegger urged the
state’s Congressional delegation to
vote against the bill, claiming its
expansion of Medi-Cal coverage
would drive up California’s cost in
providing matching funds for the
federal insurance program.
The governor, a Republican
who is in his last year of office, was
particularly irritated by a deal that
gave Nebraska huge breaks on the
cost of its Medicaid program. The
largesse was part of a deal to secure
a crucial vote in support of the
reform bill from Sen. Ben Nelson,
D-Neb.
“He got the corn. We got the
husk,” Schwarzenegger says of
Nelson. He adds that California is
entitled to similar relief in the
administration of the Medi-Cal
program.
“Healthcare reform, which
started as noble and needed
legislation, has become a trough of
bribes, deals and loopholes. You’ve
heard of the bridge to nowhere.
This is healthcare to nowhere,”
Schwarzenegger says.
A spokesperson for Speaker of
the House Nancy Pelosi, a
Democrat who represents the Bay
Area, says the bill will help
Americans overall.
Schwarzenegger’s own attempt
at healthcare reform, which
included a package of tax breaks
and incentives not dissimilar to the
federal bills currently under debate,
died in the state Legislature three
years ago.
Continued on Page 3
NEWS Page 2
Children (Continued from Page One)
On the healthcare front, Children Koch, executive director of the
Now noted that there are 1 million CaliforniaKids Foundation in North
children in California who lack Hollywood. Koch believes that Healthy
healthcare insurance – about one in every Families will likely undergo the deep cuts in
six uninsured Californians. fiscal 2011 it narrowly averted in last year’s
Mindnich notes that the cost for budget.
providing care for these children is often “That was a one-time shot. There are
shifted to private providers in the form of
visits to hospital emergency rooms.
probably going to be lots of kids disenrolled
very soon,” he says.
“It costs $1,200 to cover an Koch, whose organization provides
uninsured child, but $7,000 for an low-cost primary care coverage to children
unnecessary ER visit. There is little whose parents can’t get them into Healthy
prudence in promoting such a situation,” Families, says healthcare philanthropies
she says. have also been hard hit by losses in
At least one children’s advocate donations during the current financial
group believes that the situation for kids downturn. Koch’s own organization has
statewide will only grow worse. seen revenue drop by 25% in the past
“We’re going to be in bad shape for couple of years. Partly as a result, it
the next three or four years,” says Mike provides coverage for about 6,000 children,
down from 25,000 in 2005.
New Laws For Hospitals, Health Plans
Medi-Cal, Gender Rating For Premiums Addressed
Although the California Legislature was all but become seriously ill and make large claims.
paralyzed for months during 2009 over budget Another bill, AB 119, authored by
talks, the body did manage to pass a Assembly member Dave Jones, D-
signicant amount of legislation that became Sacramento, also bans imposing higher
law on Jan. 1. premiums bans on
On the payer the gender of the
side, laws were A Sampling of New Healthcare-related Laws policyholder. Unlike
enacted that curbed AB 108, that bill
AB 952 – Requires timely disclosure of medical
certain practices in records to certain health plans does not go into
insurance effect until 2011.
AB 523 – Extends seismic compliance deadlines for
underwriting and facilities under lease from healthcare districts On the
gave medical and provider side, AB
AB 235 – Makes it easier for patients admitted
workers’ 1383, also authored
through an ER to receive psychiatric care
compensation by Jones, would
policyholders more AB 1540 – Stiffens redacting requirements for patient allow a coverage
records that may be released to the public
rights. For providers, dividend fee be
legislation was passed SB 186 – Extends workers’ compensation recipients imposed on
that may help it boost option to use their personal physician for care
hospitals in order to
payments to treat leverage an
Medi-Cal patients, Source: State of California additional $2 billion
and give more Medi-Cal funds over
breathing room on seismic retrotting issues. the next decade. The plan has to be approved
One of the most signicant bills, AB 108, by the federal government prior to being
directly addresses one of the more implemented.
controversial insurance underwriting practices While hospitals were able to get some
in the state. Authored by Assembly member minor extensions for meeting seismic
Mary Hayashi, D-San Leandro, the bill bans compliance deadlines, they will also have to
insurers from rescinding individual policies for be more mindful of security issues. AB 1083,
fraud after they’ve been in force for 24 authored by Assembly member John A. Perez,
months. Insurers had been under scrutiny for
Continued on Next Page
the practice of nding reasons to revoke
coverage from individual members when they
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Payers & Providers
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In Brief
Second Delay in New
Hospital’s Opening
The opening of Palmdale Regional
Medical Center has been pushed
back another 90 days to May 1,
according to a hospital official.
The brand-new facility, one of
only a handful of hospitals to be
built from the ground up in
California over the past decade,
has had several delays in opening.
It was originally slated to open in
2009, but a small rooftop fire
pushed its opening back to
February 2010. Other minor
construction glitches contributed to
the most recent delay, says Julie
Montague, a spokesperson for
Lancaster Community Hospital,
located about 9 miles north of the
Palmdale Regional site.
Palmdale Regional will open
with 127 beds, and be built out
over several years to 239 beds. The
site also includes 60,000 square
feet of medical office space. Some
of the medical offices have been
completed and are already
occupied, Montague says.
Lancaster Community and
Palmdale Regional are both owned
by for-profit hospital operator
Universal Health Services, which
is based in King of Prussia, Penn.
Universal plans to close the 117-
bed Lancaster Community and sell
the property once Palmdale
Regional opens. All of Lancaster
Community’s 600 employees will
be relocated to the new hospital,
and 200 other medical personnel
will be hired.
Universal says the hospital
will cost about $200 million to
build through its first phase. Based
on current construction costs in
California of about $1.5 million
per bed, the completed facility
should cost at least $350 million.
Palmdale, with a population
of about 150,000, is the largest city
in California without an acute care
facility.
NEWS
Laws (Continued from Page Two)
D-Los Angeles, requires hospitals to undergo
annual assessments of their security plans.
The bill was backed by the Service
Employees International Union, which
claimed its membership was under
increasing threats of violence. “This
legislation is long overdue. Having adequate
Molina To Help Target Teen Obesity
Will Work With Claremont School Via NIH Grant
One of the state’s largest Medi-Cal managed
care health plans will recruit 850 of its
adolescent enrollees for an intensive study of
the cognitive behaviors that lead to obesity.
The multi-part study will involve young
enrollees of Long Beach-based Molina
Healthcare and be managed by researchers at
the Claremont Graduate University. It will
commence later this year and continue into
2015. Claremont received a $5.5 million grant
last month from the National Institutes of
Health for the study one of 37 grants dispersed
nationwide to examine different facets of the
causes of obesity.
Molina Chief Executive Ofcer J. Mario
Molina, M.D. has close ties to Claremont’s
leadership, health plan ofcials say, resulting
in the joint effort. Molina’s enrollee base is
particularly desirable to study because low-
income populations often have higher than
average rates of obesity, Claremont ofcials
stay. Obesity is linked to type 2 diabetes, heart
disease and other ailments.
Thirty percent of adolescents in California
are overweight, while another 14% are obese.
The Inland Empire, where the study will take
place, has among the highest rates of obesity
in California, according to data from the U.S.
Centers for Disease Control and Prevention.
The enrollees in the study and their family
members will undergo intensive examinations
and cognitive therapy, identifying what signals
Expert Healthcare Communications
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Page 3
security at hospitals is something that affects
all of us,” says Michael Roldan, a registered
nurse at West Hills Hospital & Medical Center
in Los Angeles and an SEIU member.
However, hospital administrators will also
have more leeway in transferring patients
admitted to the emergency room for
psychiatric care.
them to eat specic foods, and why. Specic
therapies would then be devised to change
specic eating habits for the long-term.
“The goal is to remove cues to people
eating foods high in sugar and fat,” says Kim
Reynolds, the Claremont professor who
secured the grant. “By focusing on identifying
cues and habits of overeating, developing
strategies to address inhibitions about diet
consumption, we can then design a program
to help adolescents modify their diet.”
Enrollees in the study would use a PDA
device to record a diary of what they eat, and
will be given other written material to assist
in their food choices.
About 5,000 Molina enrollees will be
screened to create a pool of candidates,
according to James Howatt, M.D., Molina’s
chief medical ofcer. Howatt says such a
study undertaken by a health plan would
represent a breakthrough of sorts in
approaching healthcare delivery.
“Our system is reactive. It treats disease
and doesn’t prevent it, and doesn’t focus on
behaviors that might cause it,” he says.
Should the use of the therapies in the
study prove successful, Howatt believes it
could be expanded to the rest of Molina’s
enrollees.
“That’s how we advance things in
medicine,” he says.
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Payers & Providers
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OPINION
Avoiding Notions Of False Security
Senate’s Win on Reform Bill is Not Same as Passage
The U.S. Senate’s passage of healthcare
reform legislation on Christmas Eve was
hailed as a huge breakthrough. Many
media outlets have all but said that the
Senate’s 60-39 passage of the bill made it
a fait accompli for eventual signature by
President Barack Obama.
However, the final bill remains far from
a done deal. A compromise must be
brokered between the House, whose
Affordable Health Care For America Act is
more liberal than the Senate’s Patient
Protection and Affordable Care Act.
The Republican caucus sat on the
sidelines, without a single party member
casting a vote in favor. This actually gives
the Democrats some tactical advantages,
in that they can hammer out a compromise
among party leaders and skip committee
hearings, which can be both contentious
and interminable.
However, there are large enough
differences between the bills and small
By
enough margins in both houses of
Ron
Congress to make passage far more
Shinkman
onerous than it appears. The Senate
needed a filibuster-proof supermajority
to pass its bill, but the House version just
squeaked by with a five-vote margin.
Indeed, 39 Democratic Congressmen voted
against the bill. Many of them were the so-
called conservative “blue dogs” such as
Rep. Walt Minnick of Idaho and Parker
Griffith of Alabama, who recently
announced his switch to the Republican
party. But liberals such as Rep. Dennis
Kucinich of Ohio also voted against the
bill. Kucinich, who is a proponent of a
single-payer system, unsuccessfully tried
to get an amendment into the final bill that
would have allowed states an option for
implementing a single-payer system.
As there is simply no margin for error
on the Senate side, the likelihood is that
the final bill will hew more toward the
center than the House version.
The major gaps include:
• A public option health plan. The
House version contains a provision for a
public option; the Senate’s does not. As
Senators such as Joe Lieberman, I-Conn.,
have already said they will vote against
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Page 4
any bill with a public option, it must go.
• Medicaid expansion. The House version
allows Medicaid coverage up to 150% of
the Federal Poverty Level. The Senate’s
version goes up to 133%. There is some
room for compromise – expect to see a
number in the middle – but not by much,
especially since the Senate wants to keep
the bill’s cost below $1 trillion.
• Abortion coverage. The House version
is actually more conservative than the
Senate’s in segregating federal funds to pay
for insurance-based abortion coverage. A
compromise will probably favor the Senate
again, particularly if it means pleasing
House liberals.
• Insurance exchanges. The House bill
calls for a national exchange. The Senate’s
version calls for them to operate on the
state level. What may emerge remains to be
seen, although the insurance lobby will
probably press for the House version –
coupled to a provision that would allow
them to sell uniform policies across state
lines.
If the version that emerges upsets too
many liberal members of the House, there
may be more members who will join
Kucinich. If the version is too liberal for an
on-the-fence Senator such as Lieberman, it
could fall apart completely.
The left-wing rhetoric has softened in
recent weeks to accepting that any reform is
better than no reform, but there may also be a
flare-up of resentment over the fact that the
Senate will be calling most of the shots.
Despite the fact that many of the
proposals in the final bill are flawed, it still
contains enough provisions to get at least 30
million more Americans insured. It would be
a great shame if the delicate ballet Congress
has engaged in to bring reform this far should
crash to the ground. But until it reaches
Obama’s desk, anything can happen.
Ron Shinkman is the publisher of Payers &
Providers.
Op-ed submissions of up to 575 words are
welcomed. Please e-mail proposals to
editor@payersandproviders.com, or call
(877) 248-2360, ext. 3.
Payers & Providers MARKETPLACE/EMPLOYMENT Page 5

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