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You are here: Home / Anderson On Health Insurance / Quality in networks

Quality in networks

by David Anderson|  March 28, 201810:28 am| 6 Comments

This post is in: Anderson On Health Insurance

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Covered California is the California exchange entity. It is very different than any other exchange in the country as it is a very active buyer and manager of the choices it allows to be sold on the individual market. This has allowed it to be the leading Silver Gapper and Silver Loader in the country as it does not allow for a single Medicaid like insurer to take both the least expensive Silver and the benchmark Silver position.

It is also allowing for an aggressive attempt to reform networks by improving quality. KQED reports:

In the next three-year contract that Covered California strikes with insurance companies, there will be a quality-focused stipulation: any hospital that doesn’t meet certain targets for safety and quality can be excluded from the health plans sold through the marketplace….
Covered California is joined by Medi-Cal, the state health program for low-income residents, CalPERS, the retirement program for state employees, and the Pacific Business Group on Health, which represents self-insured employers. Together, these groups pay for the health care of 16 million Californians, or 40 percent of the state, which gives them substantial leverage with hospitals.

But only Covered California is telling hospitals that if don’t play by the rules, they’ll be benched.

There is enough market power on the payer side to make a lot of the providers listen. The goals are only somewhat ambitious, but there is serious money attached to them so most hospitals will at least file paperwork that shows the desired levels of performance.

This is an interesting attempt to use market power of a group of coordinated buyers to get better value out of the provider world.

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Reader Interactions

6Comments

  1. 1.

    Fair Economist

    March 28, 2018 at 11:10 am

    For the umptheenth time, I love my state.

  2. 2.

    Mary G

    March 28, 2018 at 11:30 am

    @Fair Economist: Me too. One of my housemates is a third generation caregiver, which means she has her pick of clients, but not much pay and no insurance. Before the ACA she sprung a hernia and needed surgery. It would have cost $30,000 here, so she had it done in Tijuana for $4,500, crowdfunded by family and friends. Now she has Medi-Cal and so much more peace of mind.

  3. 3.

    ? Martin

    March 28, 2018 at 11:40 am

    I’ll second Fair Economist here. It’s my adopted state, but I’m very proud to live here.

    What’s also worth keeping an eye on is how the legislature takes health care forward. We backed off a bunch of plans to give Obamacare it’s shot, and some of those wound up in how Covered California operates, which is why it looks a bit different from other states. After what could only really be described as a trial balloon rather than serious legislation last year for single payer, that idea is now being teased apart into actionable pieces. The idea seems to be to take CC and expand upon it from all sides, with each step covering some benefit of single-payer but also serving as a way to measure the true costs of single payer. Single payer suffers from the dynamic scoring problem – at current health costs it’s unaffordable, but it promises to lower those costs dramatically, but we don’t really have a good measure of how much and how fast. Getting that wrong will bankrupt the state. So, we do some of the pieces, get those down, and reduce the risk of estimating what we don’t have.

    MediCal is now expanded to undocumented children. There’s another effort to expand it to undocumented adults. Part of the package is to implement a state-level insurance mandate to replace the federal one. Basically, patch the holes in the walls that the GOP is creating, expand upon what the ACA was trying to do, do it without federal dollars, and then if the political winds in DC change CA will have everything in place to operate under the federal program, or to serve as a template in much the same way that MAs programs did for ACA.

    Writ large, this is the state telling DC that we can’t rely on them, we’re doing it ourselves. Which is also why we’re going to keep suing the pants off the federal government for milking us for tax dollars and singling out the state to cut services.

  4. 4.

    Yutsano

    March 28, 2018 at 12:41 pm

    @ Martin: California could also go the Hawai’i option: mandatory employer insurance then using Medicaid to fill the gaps. They were at almost full coverage even before the ACA.

  5. 5.

    Brachiator

    March 28, 2018 at 12:45 pm

    Another happy Californian here. I did not know about Covered California’s desire to improve hospital care and heartily applaud their efforts.

    One thing I am curious about is the increase in urgent care centers. I wonder whether people are having problems getting doctors and good primary care even if they have insurance through ACA.

  6. 6.

    ProfDamatu

    March 28, 2018 at 3:01 pm

    @Brachiator: I think that varies based on geographic area – my town has a lot of primary care docs in-network for the only Exchange insurer…but that’s probably because it’s a bit of a monoculture, with the local hospital under the same corporate umbrella as the insurer, and just about all the docs affiliated in some way with the hospital. I’d imagine it would be rather different if that weren’t the case.

    I know that urgent care isn’t quite the same thing, but I always really liked the clinic model used to run the student health center at the uni I did my grad work at. If you turned an ankle or thought you might have flu or something, you showed up like you would at an urgent care, but if you needed ongoing care for whatever reason, you could make appointments with “your” clinician (so I saw several different doctors for stuff like pre-travel shots and UTIs, but when I was having sinus problems, I worked with the same doctor for several months). You could stay “in-practice” for almost everything, didn’t have to wait for an appointment for urgent care-type stuff, but got the benefits of continuity.

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