Whipsawed: Low-Income Patients At UC Davis Losing Coverage Again

By Rob Waters
California Healthline, September 26, 2018

Whipsawed is not a medical condition, but it describes exactly how Lee Henderson feels about his on-again, off-again care at UC Davis Medical Center, a place he’s been visiting since he was a child.

For the second time in three years, Henderson is about to lose access to his primary care team at the Sacramento institution.

When Henderson had surgery there in 2015 to remove an adrenal gland that was severely elevating his blood pressure, he was covered by Health Net, the only Medi-Cal managed-care plan in Sacramento County whose members could go to UC Davis for primary care at the time.

But shortly after his surgery, Henderson learned that his insurer and the university were terminating their contract, forcing him and an estimated 3,700 other Health Net Medi-Cal members to leave UC Davis and find new primary care doctors.

Now, history is repeating itself. After briefly regaining access to UC Davis last year, when UnitedHealthcare entered the Sacramento Medi-Cal market and signed an agreement with the medical center, Henderson and 1,000 other patients are getting booted out again.

On July 25, those patients got a letter from UnitedHealth. “Dear member,” it began, “we’re writing to let you know that our Medi-Cal services in Sacramento County will be discontinued effective October 31, 2018.”

Medi-Cal, California’s version of the federal Medicaid program for low-income residents, serves 13.5 million people, about one-third of the state’s population. The vast majority of them — about 80 percent — are served by managed-care plans, in which the state pays insurers a fixed amount per enrollee to provide comprehensive care.

That contrasts with fee-for-service Medi-Cal, in which the state pays medical providers directly for services provided. Medi-Cal enrollees are generally required to sign up for managed care.

The exit of UnitedHealth from Sacramento County’s managed-care Medi-Cal program means that, once again, no Medi-Cal patients on managed-care plans in the county will be able to go to UC Davis for primary care.

At the core of the issue is money. UC Davis has complained for years about low Medi-Cal reimbursement rates. (UC Davis spokesman Charles) Casey said that in 2017 the health system absorbed more than $93 million in unreimbursed costs serving Medi-Cal patients.

(Senator Richard) Pan, who now chairs the Senate Health Committee, said the structure of Medi-Cal managed care in Sacramento, which gives enrollees the choice of multiple plans, was a lose-lose for UC Davis and UnitedHealth, because the sickest, most expensive patients wanted to be on a plan that gave them access to the medical center.

“You get all the sick people — asthma or cancer or sickle cell,” he said. “The Medi-Cal contract did not account for the fact that you have a sicker population.”

The sudden loss of access to the broad and highly skilled network of doctors at UC Davis is especially hard for patients with complex conditions, said Elaine Abelaye-Mateo, a community advocate with the Health Access Action Team of Sacramento Building Healthy Communities.

https://californiahealthline.org…

Although the concept of a single payer, improved Medicare for all has become quite popular, many in the policy community and legislative bodies would prefer to continue with our existing health care financing system as modified by the Affordable Care Act (ACA). Even if it were tweaked to further expand coverage, today’s report demonstrates just one of a great multitude of examples as to why the current system is unsatisfactory.

Under ACA, more low-income Californians were enrolled in Medi-Cal (California’s Medicaid program) – a total of about 13.5 million (more than the entire population of each of 46 other states!) and 80 percent of them have been shoved into Medicaid managed care plans on the theory that it would be cheaper (by administrative fiat – California ranks 47th of all states for Medicaid payment rates) and that care would be better managed (highly disputed and likely untrue).

So what are some of the policy considerations under Medi-Cal? Perhaps above all, Medi-Cal is a welfare program and thus is chronically underfunded, failing to meet the financing requirements for the essential health care services required by the enrollees.

Investor-owned, for-profit Medicaid managed care organizations are required to make a profit for their investors, so when underfunded with a fixed capitation rate, they can profit only by decreasing care provided. As masters of innovation, there are many ways the private insurers can do that, but basically their measures impair access to health care services.

An important component of the health care delivery system is the academic medical center (AMC). Patients with more complex and long-term problems will often select plans that include an AMC in their provider networks, especially if they are already patients of that center. Adverse selection is inevitable since the plans that include AMCs will attract sicker, more expensive patients. When a Medicaid managed care program is already operating at a loss, adverse selection will increase their losses and thus force a decision to withdraw from the market. This is exactly what Health Net and then UnitedHealth did with their contracts with UC Davis Medical Center. With no UC Davis Medi-Cal contract for primary care, Medi-Cal managed care patients were left without a choice of a plan that included UC Davis. Besides, Sen. Richard Pan says, “Why is a public, state-owned university that’s running a health system not contracting with the state health plan?”

Suppose we had a single payer Medicare for all instead. First, we would not have a separate health care welfare program for low-income people without much of a political voice; we would have a single, comprehensive program for everyone. We would not have private, investor-owned, for profit corporations managing the health care funds in a manner that, by necessity (ask SEC), places investors above patients; we would have a single, publicly-funded and publicly-administered program instead. We would not have stewards trying to create barriers to health care to improve the bottom line; instead our public  stewards would be assisting patients in gaining access to the care they need. We would not have patients arbitrarily excluded from academic medical centers; instead the centers would be providing specialized services to patients equitably, based on priority. We would not have a financing system that frequently results in adverse selection with all of its consequences; risk would be borne by the public payer rather than the providers or patients. We would not have sectors of health care that were deliberately underfinanced, with its consequences as well; the national global budget for health care would be adequate to meet the needs of the nation. We would not have narrow provider networks that deliberately limit access and fragment care for strictly business purposes; patients would have their choice of health care professionals and institutions.

The academic medical center should be available to the entire community with appropriate referral made through the primary care infrastructure and the universal, integrated referral system. Under a well designed, single payer, improved Medicare for all, AMCs would be available to all, as appropriate.

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