1

Governance and Start-Up in a Public Plan

Howard Kahn

October 13, 2010

Experience with Two Public Plans in California

• One is a public monopoly.

• One is competitive with private plan.

2

3

California’s Public Plans

• Core attributes of public plans in CA (serve Medicaid enrollees, safety net protection, stakeholder board, lower admin costs, etc) create:– Transparency– Level playing field (more or less)– Quality and efficiency

4

Managed Care Market Models – COHS, GMC, and Two Plan

• Expansion of Medi-Cal managed care models– County Organized Health System (COHS) –

locally organized for specific regions– Geographic Managed Care (GMCs) - State

contracts with several plans in a specific region

– Two Plan Model – Competition in counties with developed health systems

L.A. Care Product Lines

• Medi-Cal– Plan Partners network– Direct provider network

• Healthy Families (SCHIP)

• Healthy Kids

• Medicare Advantage Special Needs Plan (SNP)

6

L.A. Care’s Mission

“To provide access to quality health care for Los Angeles County’s vulnerable and low-income communities and residents, and to support the safety net required to achieve that purpose.”

L.A. Care – Not Just an HMO

• Focus on strengthening health care safety net• Community-accountable – public advisory

committees• Community investments and leadership to

improve community health• Health policy leadership

…but is also an HMO that is performing well.

Formation and Governance

• Established by enabling legislation in 1994

• Public Agency, independent from county

• Separate Health Authority - Local Initiative- Brown Act provisions- Community/stakeholder input

• 13 member stakeholder Board

Stakeholder Board Composition

• 4 - Representing Los Angeles County (including a Board of Supervisors representative)

• 2 – Private hospitals (with and w/out Medicaid DSH)• 1 – Free and community clinics• 1 – Federally Qualified Health Centers• 1 – Physician representative• 1 – Children’s health care provider• 1 – Knox Keene licensed health plan• 2 – Health care consumers

9

Advisory Groups

• Technical Advisory Committee• Children’s Health Consultant Advisory Committee• Regional Community Advisory Committee (11)• Executive Community Advisory Committee

10

Licensure

• Knox Keene (HMO) licensed April 1997• Fiscal solvency/TNE requirements• Creates level playing field among

participating health plans• Oversight by Department of Managed

Health Care and Department of Health Care Services

11

Health Plan of San Mateo

• Licensed as a Health Insuring Organization • Exempt from Knox-Keene licensing

requirement• Operational in 1987• Eventually was licensed• Medicare SNP that competes with private

plans

12

Start-up Financing

• L.A. Care - Plan Partners, County, State, and lines of credit

• Health Plan of San Mateo - hospitals, county, HFFA, grants, loans

13

14

Questions