What does 'Medicare for all' mean for California health care workers? What experts say [The Sacramento Bee]

Feb. 1—If the California Assembly bill promising government-run health insurance coverage for all becomes law, it would radically change the pecking order for health care workers, the companies that employ them and the patients they serve, according to health policy expert Jack Needleman.

Primary care physicians would command better pay, for instance, while specialists would likely see the so-called single-payer system created by the proposed law push back on their rates, said Needleman, chair of the Department of Health Policy and Management at University of California, Los Angeles.

Mostly, the legislation carried by Assemblyman Ash Kalra, D-San Jose, brings a great deal of uncertainty for how a powerful new state-backed negotiator would affect the fortunes of key industry players, Needleman said. The measure, Assembly Bill 1400, must pass the full Assembly by Monday to survive this legislative session.

The California Hospital Association, the California Medical Association and insurers in the California Association of Health Plans have formed a coalition of health organizations opposing AB 1400. Those groups lobby for physicians and for employers.

"Rather than starting over with an entirely new health care system, California has much to celebrate and should finish the job of expanding coverage to all by building on the Affordable Care Act," said Carmela Coyle, who leads the hospital group. "Our state leads the nation, with 93% of all Californians now covered. Our opportunity now is to build upon this successful framework by identifying new pathways to extend coverage to the remaining 7% who remain uninsured, including those who are not currently eligible for coverage."

Kalra's bill has won support, though, from large labor organizations, including the California Nurses Association and AFSCME Local 3299, which represents roughly 25,000 workers at University of California campuses and hospitals.

In testimony in support of the legislation, Carmen Comsti, the nurse union's lead regulatory policy specialist, told the Assembly Appropriations Committee that nurses are tired of seeing profit drive decision-making in health care.

"Every day nurses witness preventable health care tragedies that result from our current fragmented system of insurance — patients forgo the medications and care they need simply because they cannot afford it," Comsti said. "Meanwhile, insurers and health plan middlemen deny and limit care — avoiding coverage of the sickest, restricting provider networks, creating financial barriers — all to maintain corporate bottom lines."

It's unknown, Needleman said, how wages would be affected for nurses, custodians, medical assistants and other industry workers since AB 1400 would leave it up to a proposed state-run organization called CalCare and its governing board to negotiate the fees it will pay.

CalCare would negotiate on behalf of all Californians, even those running hospitals and working in doctors' offices.

"What AB 1400 does is, it says...we will negotiate for everybody who's covered by this, whether you used to be Medi-Cal, whether you used to be uninsured, whether you used to be Medicare, whether you used to have Anthem or you used to have United or you used to have Kaiser (Permanente), we will negotiate the payment rates that providers will get for services," Needleman said.

A hallmark of Kalra's legislation is how expansive the benefits are, Needleman said. Not only does it cover medical care, but also dental, vision, behavioral health and long-term care. Despite the breadth of coverage, Californians would be charged no deductibles or co-pays.

"The benefits are, generally speaking, much broader than you see in the typical employer-based insurance and certainly broader than you see in Medicare," said Needleman, adding that it's likely that CalCare payments to institutions would land somewhere between what private insurers and Medicare pay.

The measure would rely on the Legislature passing new taxes on businesses and people making more than $49,900 per year to fund the program.

The new system, if approved, would usher in a sea change in California's health care system, Needleman said, and it will take some time to see how things settle. Here are some of the huge waves that Needleman said California's health care industry can expect if single-payer health care is approved:

The poorest and most vulnerable Californians will see a host of physicians and other practitioners open their practices to them. Medi-Cal payments often do not cover the cost of services, so to keep their practices financially viable, many physicians limit the number of Medi-Cal patients they serve.

"There are people who practice specialized medicine who are often discouraged by the fees that Medi-Cal pays from locating in places where Medi-Cal patients live or taking Medi-Cal patients on if they can avoid them," Needleman said. "By raising the payments for lower income people, for those who historically have been...on Medi-Cal or those who've been uninsured, you create a more attractive environment for some people to go practice where they otherwise wouldn't have."

Health clinics that have long served Medi-Cal and uninsured patients would be paid at better rates under AB 1400, Needleman said, but at the same time, they would face greater competition as their patients' options for care expand.

Data have shown that many Medi-Cal beneficiaries who reach age 65 and qualify for Medicare leave the clinics that long had been their medical homes and instead opt to see doctors in the large health systems who accept Medicare.

Time will tell whether the clinics serving the Medi-Cal and uninsured populations can recruit specialists or offer distinctive services that will allow them to compete, Needleman said.

The benefits of Cadillac coverage will disappear for those who got insurance through their employers: Workers who are in networks that pay physicians higher rates for services are going to lose some of their preferred access as providers accept patients who didn't have that privilege, Needleman said.

Primary-care physicians would likely get a bump in pay: "I would suspect that those who are negotiating the payment rates would try hard to bring the income...for primary care physicians up because that's been one of the areas of (labor) shortage," Needleman said.

Specialists would see salaries decline: "The major area in which physician incomes are likely to go down are for specialties where payment rates right now are very, very high relative to others," Needleman said, "and the question is whether they will be maintained at high enough levels to have people sort of grin and bear wherever the cut is and stay in California."

AB 1400 doesn't spell out whether CalCare can do business with Kaiser Permanente and other health maintenance organizations, Needleman said, but this could be worked out. Kaiser had a similar problem, he said, back in the 1960s when Medicare launched with only a fee-for-service structure. Medicare figured out a way to make lump-sum payments to Kaiser for the care it provided.

In a letter to Kalra, Kaiser State Government Relations Director Angelica Gonzalez does not indicate any room for negotiating a deal. Rather, she wrote that AB 1400 "ends Kaiser Permanente as we know it" because it would dismantle "a carefully nurtured, unique partnership among three entities: our medical groups, our hospitals, and our health plan."

The main mission of Kaiser, the state's largest health plan by revenue and membership, is providing comprehensive care to 9.3 million Californians, Gonzalez said, and under AB 1400, the state would subsume that role, threatening the employment and financial livelihoods of 17,000 physicians and 157,000 employees.

Because CalCare would take on the billing and paying functions, Needleman said, the insurance industry in California appears to be locked out of the new system. If so, that would mean thousands of Californians would lose jobs. However, he said, if you look at Medicare, it has contracted with many insurers to take care of much of that work.

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