8/14/2019 Payers & Providers, Issue of March 4, 2010

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Citing the recent devastating earthquakes inChile and Haiti, Californias lawmakers arebeginning to question the need for grantingadditional broad extensions to the states

hospitals for compliance with seismicregulations.

At a hearing of the Senate HealthCommittee Wednesday, chairwoman Sen.Elaine Alquist, D-Santa Clara, bluntly saidshe would balk at granting more wideleeway for deadlines to comply with SB1953, which passed into law nearly 16years ago.

We have a serious problem with theearthquake readiness of our hospitalbuildings, Alquist said, who added that asmany as five-dozen hospital buildingsthroughout California are at risk of a

catastrophic collapse during an earthquake.Alquist declared that continuing to

issue blanket extensions would be morallyunacceptable, particularly given that only14% of the funds spent on hospital capitalprojects in the past decade were earmarkedtoward seismic compliance.

Alquists late husband, Alfred E.Alquist, crafted seismic complancelegislation for hospitals after the 1971Sylmar earthquake. He authored astrengthening of the seismic regulationsboth in 1983 and after the 1994 Northridgequake.

Her stance may spell significantrevisions for a pending bill, SB 289. In itscurrent form, it would require hospitalsthat cannot make seismic compliance

deadlines provide a list of how manybeds would be taken out of service as aresult presumably a preamble towardobtaining another extension. Officialswith the California Hospital Association,which is the bills sponsor, say it is notyet in its final form. The bill, on a two-year track, has not been acted on in thethe Senate since last fall.

This issue got a little bit clearer inthe past few months in light of Haiti andChile, said Sen. Denise Ducheny, D-Chula Vista, who authored SB 289. Sheindicated she would want more specifics

from hospitals regarding how many bedsand buildings may be taken out ofservice.

Ducheny also authored SB 306,which pushed some 2013 compliancedeadlines back to 2020. Another bill, SB1661, passed in 2006, pushed back someof the 2013 deadlines to 2015.Altogether, five pieces have legislationhave been enacted to stretch compliancewith the original deadlines.

Rumblings On Seismic ComplianceLawmakers May Balk On More Broad Extensions

California Edition

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March 9-10

March 8-10

Calendar

4 March 2010

April 14-16

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Officials with the Office of StatewideHealth Planning and Developmentreported at the hearing that 139 hospital

buildings are now classified as unlikely tomeet the 2013 compliance deadlines,which declares that any buildings indanger of collapse in an earthquake nolonger be used for inpatients.

Its a realistic goal, but some wontmake the deadline, said OSHPDDirector David Carlisle, M.D.

According to Carlisle, six hospitalshave not reported their level of seismiccompliance at all, leading Alquist tocriticize the agency as being more of areceivership of information than anenforcer of the laws.

All hospital buildings must beseismically compliant by 2030, adeadline Ducheny suggested Wednesdayis now in danger of being missed by someproviders.

Representatives of the hospital sectortestified that both financial andbureaucratic pressures may prevent themfrom being compliant within the earlier2013-2020 deadlines.

C. Duane Dauner, president of theCalifornia Hospital Association, likenedseismic compliance to asking a familymaking $40,000 a year to replace a house

Page 2

valued at $200,000 with one valued at$500,000.

We want to do anything we possibly

can to remain in compliance, but we havesome situations where a partnership isrequired, Dauner said. Otherwise, theywill never have the financial wherewithal tobe compliant.

James Maloney, managing director ofCain Bros., a healthcare investment firm inSan Francisco, testified that hospitals needan average 12% annual return on a capitalinvestment in order to preserve existingcreditworthiness.

Carlos Fialova ofStanford Hospital andClinics claimed a different obstacle:bureaucratic wrangling with the city of Palo

Alto that may delay compliance with a2015 deadline. I dont think were going tomake it. Its going to take eight years tocomply with what they want, he says.

Alquist did say that she would bewilling to grant some extensions tohospitals that could prove exceptionalhardships, but was no longer willing tomake blanket extensions.

The state is going to feel theresponsibility when the quake hits,buildings collapse, people die, people donhave emergency services, and they ask,why didnt you do something? she said.

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In Brief

PHI Receives Cap-and-Trade Impact Grant

The Oakland-based Public HealthInstitute has received a $150,000grant from the Health Impact

Project in Washington to study theeffect on California from a state-mandated cap-and-trade program.

The Public Health Institute willwork with the CaliforniaDepartment of Public Health tocomplete the assessment.

California passed the GlobalWarming Solutions Act in 2006 tocut emissions to 1990 levels by2020, primarily through a cap-and-trade program similar to what isbeing proposed in Congress.However, the state legislationmandates that the program have nodisproportionate impact on low-income communities.

The findings will not onlyinform development of agroundbreaking cap-and-traderegulation in California, but canalso help shape similar policies thatemerge to address concerns aboutclimate change in other states andat the national level, said AaronWernham, director of the HealthImpact Project.

This is the Health ImpactProjects first-ever grant. Theorganization is a collaborationbetween the Robert Wood JohnsonFoundation and the Pew CharitableTrusts to promote the nationwideuse of health impact assessments.

Kaiser Makes LargeGrant to Pasaena

Clinic

Kaiser Permanente SouthernCalifornia has awarded a $500,000grant to the Community HealthAlliance of Pasadena to help it

Seismic (Continued from Page One)

Californias 13 publicly-operated Medi-Calmanaged care plans have proven a greatsuccess in attractingenrollees, and beatboth Medi-Cal fee-for-service and

commercial plansin quality,according to a newreport by the PacicHealth ConsultingGroup.

According tothe report, 70% ofMedi-Cal enrolleesin counties where a public plan competesagainst commercial plans choose the publicplan.

Altogether, slightly more than half ofthe states 6.8 million Medi-Cal enrollees are

in a managed care plan. Theremainder receive their careon a fee-for-service basis.

About 61% of the

states Medi-Cal managedcare beneciaries areenrolled in public plans,which are either operatedby a county agency, or arerun semi-autonomouslyfrom the countygovernments. The reportestimates that gure will

Continued on Page 3

NEWS

Continued on Next Page

Public Medi-Cal Plans FavoredStudy Shows Superiority in Enrollment and Quality

Market Share, Public Medi-Cal Plans

Contra Costa County 81.7%

Riverside County 80.7%

Kern County 78.5

San Bernardino County 75.9%

Alameda County 75%

San Francisco County 73.8%

Santa Clara County 72.3%

Source: Pacific Health Consulting Group

8/14/2019 Payers & Providers, Issue of March 4, 2010

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Completing a project that began in 2003,Oakland-based Kaiser Permanenteannounced on Wednesday that its much-touted electronic medical record system is

now online at all of its hospitals.On Tuesday, Kaisers hospital in Vallejo

was the last one in its system to go live with itsHealthConnect system, according to aspokeswoman. Kaiser facilities in Oakland andRichmond began using HealthConnect inJanuary.

It is extremely rewarding to havewatched an idea, that was questioned bymany, turn into a reality, said AndrewWiesenthal, M.D., an associate executivedirector with Kaiser.

The entire HealthConnect network,which Kaiser claims is the largest EMR system

in the world, cost $4 billion to complete.

Aside from keeping health records,patients are able to regularly communicatewith their Kaiser physicians by a secure e-mail system. Kaiser claims patients send more

than 500,000 messages a month to theirdoctors. They also view about 16 million labreports from their personal health record eachyear.

But as Wiesenthal noted, Kaisers effortshave not been without issues. In 2007, theLos Angeles Times reported that glitches inthe system led to it being down as much as20% of the time, sometimes leading todisruptions in patient care. Its chiefinformation ofcer at the time left theorganization shortly after the report waspublished.

And in 2002, Kaiser abandoned a $442

million rst effort at building an EMR system.

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NEWS

In Brief

expand primary care services toresidents of the San Gabriel Valley.

Kaiser Permanente is deeplyinvolved and committed toimproving the health ofcommunities throughout Californiaby investing in community-basedorganizations like CHAP who are

striving to expand access forpreventative and primary careservices to our vulnerable anduninsured populations, said DianaBont, vice president of publicaffairs for Kaiser PermanenteSouthern California

The money will be used inpart for a remodeling of the HealthAlliances 10,000-square-footclinic, which is scheduled to openlater this year. The center willinclude 11 exam rooms to provideprimary care.

Kaiser has made more than$1.3 million in grants to CHAPsince the mid-1990s.

IPC The Hospitalist Co.Reports Strong Earnings

North Hollywood-based IPC TheHospitalist Co. Inc. reported strongfourth quarter 2009 and full-yearearnings.

Net income for the fourthquarter rose 26% to $5.8 million,including an adjustment of$750,000 to settle litigation. Netincome for the fourth quarter of

2008 was $4.6 million. Revenuesincreased 20%, to $82.2 million,compared to $68.3 million in theprior-year quarter.

For calendar 2009, netincome rose 27% to $18.6 million,compared to $13.6 million in2008. Revenues rose 24% to$310.5 million, compared to$251.2 million in 2008.

IPC Chief Executive OfficerAdam Singer, M.D., attrubuted thegrowth in part to eight acquisitionsmade during 2009.

rise to 66% by the end of the year, whenKings, Fresno, Madera and Ventura countiesconvert to Medi-Cal managed care. Thereport estimates those public plans willimmediately attract 120,000 enrollees.

The report noted that the public plansscored anywhere from 20% to 56% higheron the 2008 Healthcare Effectiveness Dataand Information Set (HEDIS) measures thancommercial plans.

Aside from being more popular than thecommercial plans in attracting enrollees, thestudy estimates that Medi-Cal managed carehas been more cost-effective as well, shavingat least 5% off the cost of providing care. Itestimates that the public plans have savedboth the state and federal government at least$2 billion over the last decade. Since the(public) health plans dominate theenrollment in Medi-Cal managed care, these

plans have been the principal source of thesavings achieved by the state, the reportstated.

The report also cited a study by UC SanDiego researchers released last year thatconcluded the rate of premium increases forMedi-Cal managed care plans was also far lesthan that of commercial plans: 2.3% per year,versus 10.1%.

Howard Kahn, chief executive ofL.A.Care Health Plan, the largest public Medi-Camanaged care plan, noted that Medi-Cal costgrowth is constrained in part due to very lowlevels of payment providers receive comparedto the rest of the country. But within Medi-Cal, managed care has saved the state a lot ofmoney, he said. From the payer perspective,its one of the best deals in the country.

Pacic Health Consultings study wasunderwritten by the California Endowment.

Medi-Cal (Continued from Page Two)

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Kaiser Completes EMR System$4 Billion Effort Took Seven Years to Implement

8/14/2019 Payers & Providers, Issue of March 4, 2010

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Payers & Providers Page

President Barack Obamas nationallytelevised healthcare summit last week wascalled a lot of things, including badtelevision by Rep. Mike Pence, R-Indiana.

I beg to differ with Pence some: thesummit was easily the most exciting eventto transpire at Blair House since twoPuerto Rican nationals tried to gun downPresident Harry Truman there in 1950.

But obviously, thats not saying much.Obama did indeed do a great job of

handling the summit, often sitting with hischin in his hands as his Republican

opponents kept on calling healthcarereform profligate spending and insistingeveryone should start from scratch nodoubt so they could stall the bill until the2012 elections. Obama also took HouseMinority Whip Eric Cantor, R-Virginia, totask for having on hand a 2,200-page version of the bill thats beenlanguishing in Congress for months,calling the mound of paper aprop.

I understand the point of thissummit: it was not to discuss differencesbetween the Democratic and Republican

approaches to healthcare reform. It was todemonstrate to the American people thatthe Republicans really dont care if 47million of their fellow citizens are an ERvisit or suspicious x-ray away from beingleft totally destitute, or even worse, deadand their families left destitute. It was alsomeant to eliminate any lingering doubtsamong the American people as to whyreform should be enacted.

As I have said before, there are manyflaws in the current reform proposals,particularly in terms of long-term costcontrols. But the reform itself is a far sight

more palatable than allowing the entirehealthcare system continue its self-consuming plunge out of control.

The problem is, had Obama workedthis issue last summer the way he is now,this summit would have never beenneeded in the first place. Legislationwould have passed in August per hisoriginal deadline. As a result, formerCosmo nude pinup and current daughterpeddler Scott Brown might have neverbeen elected to the Senate. And the messy

route of passing reform via the budgetreconciliation process would not havebecome a final resort for Obama and theDemocrats.

Im reminded here of abolitionistWendell Phillips slam ofAbraham Lincoearly in his presidency for dithering aboufreeing the slaves. Phillips called Lincoln first-rate second-rate man, praising himhaving his heart in the right place, butcondemning him for his seeming inabilityact.

The same seems to be true here. The

summits political intent was clear, evencommendable. However, good intent meaabsolutely nothing.

Despite Lincolns brilliance, he neveoperated in a political vacuum: he hesitatfreeing the slaves because of a legitimate

even more states would secede from Union. He finally acted when it appethe British might recognize theConfederacy. Even then, he waited uthe Union scored a military victory aAntietam before he enacted the

Emancipation Proclamation.But Lincoln acted. His timing and

Phillips are now both historical footnoteObama hopefully made his last overtto the Republicans this week, byincorporating some of their suggestions inthe Democrats reform proposal. With theunveiling his own plan this week !anddeclaring that the debate is over he hassignaled its time to move forward.

Given that Cantor groused this week Obamas efforts were not bipartisan, it is obvious that the Republicans no longer nbe consulted on this issue.

But whether Obama waited too long act remains to be seen. If he does not do

everything in his power to get a reform bipassed and actually enact one he willbecome the embodiment of Phillips quipauthentic first-rate second-rate man.

OPINION

The First-Rate Second-Rate SummitObama Made His Political Point; Now He Must Ac

By

Ron

Shinkman

Ron Shinkman is the publisher of Payers &

Providers.

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Op-ed submissions of up to 575 words a

welcomed. Please e-mail proposals to

editor@payersandproviders.com, or ca

(877) 248-2360, ext. 3.

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