 Thank you very much. Well good morning everyone. Good morning everyone. There we go. My God come on. It's Friday morning. It's a beautiful day. You have this extraordinary breakfast. You had I like the the healthy option the really healthy option and then the not-to-be-named option. That would be called bacon. Thank you so much for inviting me. It's a real pleasure to be with you here on the Central Coast. I began my morning at about five in Fresno having spent the day yesterday in a full-day meeting with the community talking about California's health benefit exchange and some of the challenges we have around outreach and enrollment. And so I'm delighted to now be on the the coast of California and to visit with you about some of the issues we're grappling with and to learn from you about some of your issues and concerns broadly about health reform and specifically as it relates to chronic disease and diabetes. You know a lot of people talk about here in California. You know it's so hard. We have so much to do reform is so complicated and complex. We don't have enough time. And let me just start by saying all of that is true. But I'm really proud that we are living in a state where we're actually talking about not whether or not reform is going to go forward but how reform to go how reform will go forward. How to implement it in a way that reflects our needs our responsibilities our priorities and our populations to be served. California really is a leader. We are moving forward consistent with the direction or the framework of federal reform consistent with the direction of our state policymakers. And you look around the country and there's a lot of debate still going on about whether or not reform makes sense. California policymakers were very clear. The status quo is unacceptable. It is unsustainable for the health and well being of the people of California as well as our economy and our competitiveness. So we're a national leader and a key part of our national leadership is this thing called a health benefit exchange. How many of you have heard of exchanges. OK. So most of you are heard a little bit about it. Hopefully by the end of our time together you'll understand it a lot better. My goal is to talk with you about the exchange how it fits into the broad framework of federal reform and how it really is a key component if not a centerpiece of our effort together to expand coverage to improve quality to address affordability and to reduce health disparities. So broadly exchange in the context of reform. Secondly I want to share with you some observations about what the policy levers are that I see for how the exchange can help contribute to your more specific goals around chronic disease and diabetes. And finally to talk about some of the challenges we all face in terms of getting ready for reform. So now I'm going to hit this for the first time and be delighted that it actually advanced. So what is an exchange. Have you all used orbits. Have you all used travel velocity. Have you all used online websites. Right. In some respects think of it as an online website. It's an online marketplace I should say that's a lot like travel velocity or orbits in terms of providing an online marketplace where people can go to shop to compare plans and to purchase the health insurance that makes sense for them. We are fortunate that our policy makers understood that this exchange and I think we all recognize exchange is kind of this weird awkward word and as we develop a brand we will probably use a different term. But an exchange is really about choice. It's really about affordability. It's about quality. It's about trust. These are some of the words that we're going to need to think together about how to brand what we are doing. But fundamentally it's a new purchasing option. It's the idea is to give individuals and small businesses the same kind of purchasing cloud with health plans that employees of large businesses have the same kind of choice the same kind of quality the same kind of affordability. Our policy makers are also understood that this this exchange is also a gateway in many respects. It's a gateway to coverage to subsidize coverage for lower income populations. As you may recall federal reform calls for at its foundation an expansion of the Medicaid program or Medi-Cal in California. Today as you know you have to meet a whole variety of very specific requirements to be eligible for Medi-Cal. Well that's going to change. It's really going to be a single income line that will determine eligibility. If your incomes blow 138 percent of poverty you're going to be eligible for Medi-Cal. You no longer going to have to meet specific what we call categorical requirements by and large. Above Medi-Cal for those people who earn a little bit more money say between 138 and up to 400 percent of poverty. Those individuals will be eligible for a tax credit a tax credit to help make coverage affordable. That's roughly between about twenty seven thousand and about eighty thousand dollars for a family of four. So the exchange is the sole venue through which people will go to use a tax credit to purchase coverage. And that's very important because as you know under the Affordable Care Act people come twenty fourteen are going to be required to buy insurance. Something often characterizes an individual mandate. I view it as a matter of personal responsibility. But the tax credit through the exchange is a way to help people comply with that new responsibility that will take effect in twenty fourteen and help them access more affordable coverage. And for the exchange it will help ensure that we have a broad risk mix which is very important for a variety of reasons. So it's a new purchasing option that harnesses power of a broad group of people. It's a gateway to coverage. It's a marketplace. It's a marketplace that really is about the consumer. Because today as you know under the current rules insurance companies basically get to pick and choose who they insure. I mean that's consistent with our current laws. Come twenty fourteen insurance companies are going to be required to cover everyone regardless of their gender their occupation their health status their preexisting condition. Come twenty fourteen when the exchange is created we will be providing information. We will be providing about quality about costs about provider networks. We will be empowering individuals to determine what is the health plan and the provider network that makes sense for them. So it's creating a market place where the plans are going to be competing not on picking and choosing who they want to insure but competing on the basis of quality on affordability on outcomes for the people that they serve. So it's a very different type of marketplace that the exchange will be helping to to to create come twenty fourteen than it exists today. And finally our policy makers understood that the exchange offers an amazing opportunity to provide greater value to its its its members greater value in terms of better access to more affordable higher quality products by actively purchasing on behalf of the people that we serve. What does that mean in practice. It means that our exchange gets to establish we have the authority consistent with the direction of our state policy makers to identify requirements or criteria for health plans to participate in our exchange that exceed the minimums that the federal law establishes. And I'm going to talk about why this is such an important feature of our of our authority in our work shortly and how it means what it means in practice for people with chronic diseases such as diabetes. But this opportunity to be an active purchaser in the marketplace is one of the most important authorities and factors that we will be bringing to the marketplace. Oops. Do I get to go backwards Ron. Yeah. Thank you. Thank you very much. So California's health benefit exchange is an independent government entity. We are a part of government but we are not a part of an existing agency or department. We are governed by a five member board of which I am one one member. And when our board was fully constituted last summer we began by developing a vision mission and values statement and set of principles. And I want to talk about them briefly because it gives you a sense of who we are and what we're about and what we're endeavoring to accomplish for the people of California. Our vision is that we will help improve the health and well being of all Californians by improving their access to affordable high quality care. We emphasize all we will not be ensuring all people in California but it recognizes that vision statement recognizes that we are part of a broader fabric of coverage and care and that working with Medi-Cal working with healthy families working with commercial insurers and others that together we all have a responsibility to advance this broad vision for the people of California. Our mission fundamentally is to expand coverage. We expect that the exchange will expand coverage through the subsidies I mentioned a moment ago to a couple million lower income Californians who today are uninsured. That will make a very important contribution to our efforts to improve coverage, access and health improvement. We intend to do so by creating this more competitive marketplace that I just mentioned where the health plans are competing. Competing for the business of consumers by demonstrating the quality of their services, the affordability of their products. But our mission also notes it's not just about coverage. Important as coverage is we also believe fundamentally that our contribution of the marketplace needs to be measured by what we are able to do in terms of working with plans, working with the provider communities in addressing some of these more fundamental problems around quality, affordability and health disparities. We identified, you know I felt so cocky. There we go. Big talk so early in the morning. We also articulated a number of values and I won't go into all of them in detail but I will start with what's most important. We bring a very strong consumer focus and orientation to our work. We recognize that California is just an extraordinary state in all of its amazing cultural, linguistic, economic, educational and health status diversity. And the consumer in all of that diversity needs to be the lens through which all of our work is done. So it begins with a focus on the consumer and we recognize for example the communities that comprise the central coast are very different than the communities in the northern part of the state or the southern part of the state. And so how we think about the work we do, the plan choices we offer, the provider networks we bring, the benefit designs we advance, we need to be responsive to what we know about the consumers that we're serving. While we begin with the consumer we end with results, we end with accountability. And as I noted a moment ago we feel very strongly that yes we need to be held accountable for the number of additional people who are insured in our state and that is our fundamental mission. But we also have an opportunity as we'll be talking more about to really get at some of the underlying drivers of cost, quality and health disparities. And that we need to be judged, we need to be held accountable for the contribution we make more broadly in terms of the well-being of people of California. I would note at the bottom left catalyst, catalyst. That really speaks to our broad aspiration, our aspiration as they say beyond coverage to look for ways to harness our purchasing power. We will be purchasing on behalf of millions of Californians. It represents a significant share of the marketplace and that gives us an opportunity to think creatively, carefully and strategically about how to use that purchasing power in a way to influence through our contracting health plan partners the outcomes we all share in terms of better health, better health care and lower costs. So that catalyst, that aspiration for making a difference broadly is really very, very core to what we are doing. I'm going to do that. So achieving that triple aim is the former head of Centers for Medicare and Medicare and Medicaid, Don Burr spoke to. This triple aim of better health, better health care, lower costs, is going to require some very careful and thoughtful thinking around how do we advance more coordinated, more comprehensive approaches to chronic disease. We will not be successful in terms of achieving our goals around quality, around affordability, around diversity, disparities I should say, without being far more purposeful and successful in terms of how we go about preventing, detecting and treating chronic diseases such as diabetes. These are the issues that you all know so well that I'm eager to hear more from you about, but it's clear that the incidents of diabetes in our state broadly, the Central Coast in particular, the annual costs of diabetes and pre-diabetes, the disproportionate impacts of diabetes on communities of color, on lower income communities, is just unacceptable. And the sense of urgency, the sense of the need for action is one that our exchange board feels. Our fundamental goal may be around coverage, but we understand as I say, that we are going to have to look for ways to make a contribution in terms of getting at some of the underlying drivers of costs and the underlying drivers of disparities in health and health care for the people of California. What we bring to this shared goal, the shared aspiration in terms of how we do a better job, in terms of preventing and treating chronic diseases such as diabetes, is we definitely bring as I say, a very clear vision in terms of our interest in contributing to the health of all improved health for all Californians. Our mission is very clear. Yes, it's about coverage, but it's also grounded in reducing disparities, promoting quality and affordability. And the values, when I talk about being a catalyst for change, I really do hope our board as we move forward will be looking very closely at ways that we can stimulate new strategies, new innovations that really get at the necessary improvements that are so important to how we finance and deliver services in a way that gets at the underlying problems and considerations around diabetes. Our chronic diseases broadly and diabetes specifically. So what are some of the tools that we bring? There we go. And first, it starts with coverage. I know that does, that may not, you may not originally think, well, that's our number one lever, but, you know, the Affordable Care Act has this broad aspiration, right? About expanded coverage, about seamless coordination of care, about health improvement. But the promise of the Affordable Care Act as it relates to coverage expansion doesn't amount to much if we don't get someone who's eligible actually connected to insurance and connected to care. So in my mind, one of the most important challenges before us and indeed one of the best opportunities we have is around how we modernize enrollment. How many of you have had experience either professionally or personally with interacting with the Medi-Cal program or healthy families? So you probably know that that isn't, shall we say, the most consumer friendly of experiences. This is a wonderful opportunity before us and I think the exchange has a very important role to play. But we are not going to be able to deliver on the promise of the Affordable Care Act as it relates to improvements in coverage, access and health outcomes, and reducing disparities unless we're successful in really transforming how we approach eligibility determination and enrollment. And in this regard, the Affordable Care Act is extraordinarily powerful in its vision. It talks about no wrong door that people can get connected to coverage, whether it be Medi-Cal, healthy families, tax credits for the exchange, commercial coverage. That there's going to be multiple pathways that people can pursue to get connected to coverage. No wrong door is the buzz word we've all been talking about for years and now we actually have an opportunity to execute. This idea that we're actually going to put the consumer at the center of our work, at the center, as opposed to looking for ways to determine why someone's not eligible. The question now is we're going to work with you consumer to figure out what you are eligible for because the overarching social policy objective is coverage and that is a profound change in terms of how we approach public affordability programs, insurance affordability programs in our state. So the vision of the Affordable Care Act is a very powerful one, but it's also markedly different than what we do today with our eligibility and enrollment systems, where regrettably sometimes we make it much much harder to access services that people need than it really should be. So the context for modernizing enrollment is going to be difficult. From an education perspective, many of the people with whom you work and serve, they may not know about the Affordable Care Act and the new opportunities. What they may know about it may be informed by a lot of misinformation, a lot of myth. We have some fundamental public distress of government and public institutions and issues and together we're going to have to work together to overcome that. We have multiple information technology systems that we're going to need to integrate. We have very labor and paper intensive processes that we're going to need to streamline. We're going to need to figure out a way to really simplify the information to consumers in a way that's reflective of their cultural linguistic needs and circumstances to help them make choices that will now become available for them come 2014. So we have some very important levers with the exchange around modernization. Part of it is this information technology systems where we're working with the Department of Healthcare Services and the Managers Medical Insurance Board to really develop information technology systems that are far streamlined and that put the consumer at the front so that all the figure out what program is someone eligible for, that's all in the back end that they never see. But what the consumer sees is simple, consumer friendly, culturally and linguistically relevant information to help them understand what their choices are, what plans they may be eligible for and how there's a variety of programs through Medi-Cal, the exchange, healthy families to help. We are also in partnership with the Department of Healthcare Services and the Managers Medical Insurance Board undertaking a the development and then the execution of what will be a very comprehensive all hands on deck kind of campaign to get the word out. We will have resources, we will be developing partnerships with something called, have people heard of the term navigators? We use the term also assistors, the idea here is to recognize that yes, online technology is powerful and for a lot of people that's going to be all they need maybe with a little bit of assistance through online mechanisms but for a lot of people they're going to need in-person assistance whether it be a county eligibility worker, a community-based organization, a provider. We want to develop a really an army if you will of assistors or navigators to help inform and educate and connect what we know will be millions of people to new options, new opportunities and new coverage. So this is a really a precondition. If we don't get this eligibility modernization, enrollment and education piece right, then we're not going to have the opportunity to advance the broader changes in terms of healthcare system delivery and health improvements. So what's the second lever? Value-based purchasing. Value-based purchasing really gets back to the point I mentioned a moment ago where in terms of the exchange has this ability to establish planned participation requirements that reflect California goals, that reflect California priorities above and beyond what the federal law says. So what that means is that the exchange and we're just beginning a statewide conversation to talk about well what are our quality improvement goals, what are our delivery system reform goals and how might we incorporate those goals into the standards we put forward that will determine what health plans and provider networks are offered as a choice to the millions of people who will be purchasing coverage through the exchange. It's a very, very important lever or policy tool that enables us to actively purchase to go out to the planning community and say this is what we're looking to buy for the people of California. So what does that mean for chronic diseases? That means the exchange board and again we're just beginning this conversation so we're eager for your participation and input. The board could say for example well there's certain public health requirements that we really want to advance so we're going to say to our plans if you want to participate you know your provider networks need to participate in chronic disease registries or diabetes registries so that could be a condition of participation. We could say to our plan partners there's certain health improvement goals that we want to see among people who have certain types of chronic diseases as a condition to once you're a plan to be renewed and to be offered in the next cycle. So there again we could identify if we were to conclude certain chronic diseases such as diabetes if there were some specific markers related to health improvement we could say to our plan partners we will continue to do business with you if you're able to meet certain benchmarks. We could solicit plans to participate that meet with their provider network partners of course that meet certain specific competencies or characteristics that the evidence tells us offers the best improvement towards addressing chronic diseases such as diabetes such as the evidence around team-based patient-centered coordinated care models. Again that's an example of where we could say this is what we're looking for in terms of the health plan partners and provider networks that we are going to offer as a choice through the health benefit exchange so how our exchange board ultimately resolves this issue of state specific goals state specific standards could have very important I believe will have very important implications for the kinds of choices the kinds of provider networks the kind of access and health outcomes for the people of California. Two other lovers that we we have benefit design there's been a lot of talk about essential health benefits so people heard a little bit about essential health benefits under the federal reform there's a requirement that people have insurance and if you're going to require people to buy something you need to tell them what at a minimum you need to buy and so the that minimum set of benefits to meet the federal requirement to purchase coverage is called the essential health benefits federal the federal government has thus far in December basically said to the states we federal government are not going to determine nationally what those essential health benefits are but rather we are going to look to you states to make that determination and we have received some direction from the federal government in terms of the types of plans here in California from which we would choose that will be a decision that our state policymakers will need to make and the exchange will be weighing in and participating in that decision but what it effectively means is that California currently has many requirements on health plans often referred to as mandates some of which include diabetes education and treatment and services those mandates are included in the plan choices that are available in the small group market in the large commercial market in all likelihood where our policymakers land on in determining what an essential health benefit is in California will likely incorporate the mandates that exist today so there's not you know there's not a lot of room if you will for modifying what benefits are going to be covered because the federal law basically said the federal direction from the to the states is basically saying here's a menu of choices from within your state and you need to choose from within those menu that menu and in California our menu generally includes our existing mandates so that's why I expect the mandates that exist today in all likelihood for the next couple years once reform begins will be included as well for the exchange the decision then is not less not so much about what benefits will be covered or not but really it's more about cost sharing it's about provider network it's about medical utilization so benefit design in my mind represents an example of a lever where the exchange can endeavor to advance specific health improvement goals or delivery system goals this is another part of the conversation we're having around the state help us think about not only what should those standards be for health plans to participate in the exchange but we're also soliciting input in terms of so how should we design benefits what are the opportunities we have through benefit design as I say to advance our goals so in my mind there's an opportunity to look at what we often characterize as value-based benefit design which is this idea of looking at benefits in a way to in structuring them in a way that creates incentives for consumers to really engage in their health incentives for consumers to participate in evidence-based activities that we know offer a lot of promise in terms of really managing and treating their chronic diseases such as diabetes so what would that possibly look like in the case in the context of diabetes it could mean waving out-of-pocket costs or significantly reducing out-of-pocket costs for prescription drugs related to diabetes or out-of-pocket costs as it relates to outpatient services for diabetes or creating incentives for individuals to see and use those physicians that have demonstrated high performance consistent with evidence-based practices in the care and treatment of diabetes so it's looking at benefit design in a way to really advance certain values around quality and affordability we'll also be looking at worksite wellness programs the exchange in effect is two exchanges as I said it's individuals it's also small businesses so come 2014 when the exchange begins operations small businesses up to 50 will be able to purchase coverage through the exchange and depending upon the wage profile of those employers they'll be able to access tax credits to promote more affordable coverage for for their employees but worksite wellness programs are increasingly being developed in the context of small businesses and we're looking well so what is the evidence what's working what's working particularly well and so we could consider for example requiring or in creating incentives for employers to offer worksite wellness programs that often are very much oriented towards their employees that either are at risk of or are struggling with chronic diseases and finally we have a bully pulpit we have a bully pulpit in terms of giving our voice as a major purchaser on behalf of millions of Californians drawing attention to the problems around chronic diseases broadly diabetes specifically we will have information in terms of the performance of our health plans and provider network partners that we would have an opportunity to shine a light on through public public reporting and dissemination we also have the opportunity to collaborate with other purchasers as I said at the start our vision is about improving health for all Californians but we recognize we can't do it alone but rather we will work in partnership so there are opportunities through our purchasing strategies what I characterized earlier is value-based purchasing in terms of some of the standards we might consider setting for those health plans that that partner with us through value-based benefit design where there are many there is might and so there are opportunities for us to align whether it be with the MediCal program or with large employers to really advance very specific outcomes that we're looking for as it relates to chronic diseases and diabetes so as we as we look to the future the world in which we work the world in which you work is absolutely changing we are fortunate to be living and working in a state where we are endeavoring today to get ready for what will be the sweeping changes that generally will all take effect come 2014 I say generally because some of them are already being established or putting in place now I suppose I could say generally because there's also these two little issues looming large related to the Supreme Court and our congressional elections and presidential elections and perhaps we can visit about that but you know it's evidence by our work with the exchange and and more broadly notwithstanding the environment of uncertainty we are very much focused on 2014 when the exchange will take effect when the MediCal expansion will take effect when the sweeping insurance reforms will take effect and I know that all of you are thinking through well what is your place in this changing world what is your role what is the contribution you have to make and I really want to encourage those individual and collective explorations and in my mind it begins just as we've done with the exchange as we've thought about our place in the context of other purchasers want to encourage all of you to think of your place in the community in the context of the communities that that you serve in the context of your mission in terms of understanding what is your role either on your own or really in concert with others in terms of advancing health improvement and being a part of the changes that are unfolding around us when I think about getting ready for 2014 there are a couple things that I always like to emphasize and it will vary by the community the service provider etc but beyond understanding your fit is understanding that come 2014 nearly everyone is going to be insured and we can return in our conversation about how nearly everyone is not everyone and we have some challenges as a community statewide to determine strategies that make sense and that are appropriate for those who remain outside the reach of the Affordable Care Act principally unauthorized immigrants and the exchange is eager to be a part of that that very important conversation but the future is near universal coverage and so it's going to be important as providers in particular such as physician groups or clinics to have the capacity to accept insurance to accept the revenue streams that will be associated with the people who today you're serving as uninsured who come 2014 many of which will have an income stream associated with them the future is value-based purchasing uh purchasers like the exchange increasingly are going to be saying we are interested in buying value purchasing for health improvements as opposed to purchasing for specific services or volume and so in the context of value-based purchasing that's really focused increasingly on outcomes and health improvement it's going to be a very important for uh providers to be able to demonstrate the the affordability the the cost effectiveness and the quality of the services you provide and the contribution to health improvement that you make the future is also one of integrated care delivery not siloized care but really integrated coordinated care and so it's going to be critical as you think about your role in in this unfolding future to think about and build capacity to partner with other providers to be in a to be able to share information and i know you're going to be hearing from dr tang who will speak very very eloquently and powerfully to the importance of health information exchange and the importance of care coordination and the power of technology in terms of really advancing this kind of team-based integrated care delivery models but i encourage you to look for ways to be a part of those broader continuance of care from the exchange perspective as we look to the future we recognize that we do have a role to play we feel that we have an opportunity to really accelerate the kind of changes we're seeing in the financing and delivery of care that increasingly is more team-oriented is more coordinated is more patient centered we think that is absolutely the right direction and so we're looking for ways for us to really contribute to the changes that we're seeing in the marketplace and that federal reform is advancing and i really think that as purchasers like the exchange place more and more emphasis on value on health improvement i think we will see in turn our health plan partners and the provider networks with within which they work really look for new ways to stimulate new strategies that really get at some of these underlying health related issues that and finding new partners and finding new strategies to help people stay healthy or to get healthy and in that respect our community networks whether they be service providers clinics hospitals and others all of you have something to bring to this effort to help get at the underlying drivers of not just cost but really in terms of quality as it relates to people who either are diabetic or pre-diabetic but i think we have an important role to try to galvanize or stimulate the effort by plans and by providers to be far more innovative and far more focused on health improvement not just on the delivery of specific services so as we go forward a couple things that that i want to emphasize in terms of how we do our work we do not do our work alone the exchange may be the shiny new object that is new and different and a lot of people look to to be the solution to any number of different costs and quality and coverage related issues but we are not an island unto ourselves the power of what we do is going to be dramatically enhanced by our ability to partner and align particularly with our state partners in the medicow program healthy families as well as potentially the state employees program we move forward very much grounded in research and evidence i've emphasized that a number of times in my comments particularly as it relates to the evidence around the care and treatment of individuals who are diabetic or pre-diabetic we really are eager for data research evidence to underscore and form the decisions we're going to need to make around our qualified health plan partners through the exchange around benefit design and so on and finally we move forward in a very open and transparent way our exchange board is a board it is not a division within a department we meet in public session our meetings our webcast we as i noted yesterday we're in Fresno we're going to be traveling around the state and doing what we can not only to bring information to communities but really to bring information from communities to our deliberation so i encourage you to join visit our website to join our our listserv we are eager as i say to get input on these issues that i shared with you that we're grappling with in terms of what kind of goals should we set for ourselves around health plan contracting around quality improvement around benefit design we have a whole series of questions that we have posed on our website we are not looking for people to answer all 40 questions but there may be one or two that you all particularly given your expertise around diabetes and chronic disease can really help us think through particularly as it relates to our quality improvement goals that we would set for health plans as well as how we think about benefit design i'd note in closing that we have an extraordinary opportunity before us we are fortunate to be living through the challenges and complexities that is health reform implementation opportunities like this do not come along very often i would imagine everyone in this room is probably dedicated the better part of their lives to improving access to needed services needed education and improved outcomes and we have an opportunity it's not perfect but we have an opportunity with the affordable care act to really advance these long sought goals towards better health better health care and lower costs it is not the responsibility of the exchange alone it is not the responsibility of you alone insurers have very important new responsibilities and obligations government has new important responsibilities and obligations individuals have new obligations to purchase coverage for example providers have a very important role to play and responsibility in terms of really being a part of the changes that are unfolding in health care delivery and really demonstrate in a very team based coordinated way their ability to improve outcomes for the people of california in a far more high value cost effective way than we've seen in the past and finally the broader community has a role to play you all know better than most that notwithstanding the importance of the clinical care provider so much of health occurs in the broader community and we have a challenge together to find creative ways to bridge what happens in a medical or clinical context with what happens in the broader community context and there's some important goals or tools and resources in the affordable care act to do just that so together I'm confident we actually can increase the number of people who are insured in our state we can improve affordability we can improve quality we can reduce health disparities the exchange has a role you each individually have a role and collectively have a role and I'm eager for our opportunity to work together towards this shared aspiration so let me stop there Raquel and I'm eager to hear from you all about where we can work together and what we can learn from thank you very much Ellen McKay with Central California Alliance for Health and I really want to thank you for being here this morning hi and I want to start by saying I think where we are as a state as a leader in the nation has a great deal to do with the energy and commitment that you and your colleagues on the exchange are bringing to this effort so thanks for that and I know I speak for everyone in the room a question that we've all been dying to ask you what's Arnold Schwarzenegger really like but instead of that question I want to just say a couple things and then ask you about the active purchaser role on the exchange the first I'm very pleased to hear that the exchange is thinking in the direction of prevention and public health priorities our health plan spends about five hundred million dollars a year on medical care services in this region and I can't help but think that a lot of the root cause of those costs and suffering have to do with what goes on in our kitchens and our playgrounds with nutrition and activity level and so finding a way to kind of steer the battleship in the direction of a health care system and solutions not just a medical care approach is really encouraging the question that I have to you is one that I hear a lot from providers that I talked to in this region and they're very concerned about what they might be paid in the health insurance exchange and so this I think has to do with the active purchaser role that the exchange could take and their questions kind of have to do with would the exchange board be likely to set say premium bans for regions that the health plans would operate within or is it going to be more of like a a market-based approach to setting premium whatever the plans negotiate with providers then would determine the premium and of course the competition would occur within the Expedia like marketplace there so that's my question okay a couple things let me actually start with the Arnold question okay good um uh because the governor former governor was a man of action and he wouldn't just act he's an auction auction auction and he'd say Kim I want action from you and I took him seriously uh and I I want to answer your question about Governor Schwarzenegger because we would probably not be here having this conversation if Governor Schwarzenegger hadn't led an effort along with former speaker Fabian Nunez back in 2007 to achieve health reform here in California so he was a man is a man who understands the importance of these issues and the importance of comprehensive reform including prevention and while we weren't successful in 2007 when federal reform came up we were the first state in the nation to enact legislation creating the health benefit exchange following the affordable care act republican governor democratic legislature and it was because of Governor Schwarzenegger and the legislative leadership's leadership and recognizing how important it was for California not Washington California to design and implement reform in the exchange specifically in a way that reflects our values our priorities our populations so I really he was a tremendous leader on these issues and we are here in large part because of that that vision not just an exchange to cover people but an exchange to be an active purchaser to really bring value to the members on whose half we are purchasing so that then leads to your question about value-based purchasing and selective contracting actually you had your second piece was really about how do we integrate public health and and healthcare purchasing and we're trying to figure that out and we are eager to hear thoughts in terms of where there are opportunities for the exchange as a purchaser to help incentivize or reward better integration between clinical care and community care and a lot of smart people are trying to think about that and we're eager for for good thinking in terms of what contribution we can make in terms of provider reimbursement it's premature to say what that's going to look like we will be contracting with what are called qualified health plans or qhps these are the plans that will have to meet both federal and california specific plan participation standards they in turn will will set reimbursement with their network partners you know we will need to balance as an exchange board the imperative indeed the obligation to ensure adequate and appropriate network capacity and ensure that there's sufficient representation and inclusion of essential community providers which I would anticipate those of you who are providers in this room no doubt are are a part of so network adequacy will be an imperative affordability will be as well do I see the exchange being all about negotiating to the lowest bottom line possible you know you can negotiate really low rates and and maybe they'll stay low for a year or two but it's negotiating a low rate on a one-time basis is not going to get at the underlying drivers of cost and so I I hope our exchange board will will strike that right balance in terms of we need to offer products that people can afford and that offer them value but if not immediately at least over time we need to be changing the incentives to really get at some of these underlying cost drivers in the delivery of care I can't tell you what our reimbursement rates are going to be until we get into negotiations but I I know we're very much focused on on value for the people that we are negotiating on behalf of and we know that health plans and local initiatives and county organized health systems are going to be critical partners along with their extended provider networks one last thought on the integration of the public health orientation and prevention one thing our health plan is working on right now and has implemented this year our incentives for our members we've traditionally looked at just the provider side and now we're actually offering incentives for our members to educate themselves about how to use the emergency department if their child is sick also creating incentives for compliance with medical care but the one that I'm most excited about is incentives for body weight management for our kids who are most at risk for childhood obesity so we're kind of turning our focus not just to the provider side but also to the member side in their own health behavior well and that's where this idea of value-based benefit design I think is so important and we are eager to learn what does the evidence tell us sure what does the evidence tell us in terms of what kind of incentives what kind of rewards actually can have an impact in engaging the consumer in terms of taking more responsibility or being more engaged in their own health and well-being what kind of incentives are important to ensuring that they're getting the prescription drugs that they need or seeing the doctors and medical providers that we know again informed by the evidence are practicing the kind of medicine that offers the best opportunity to promote their health and wellness so I couldn't agree with you more I think we spend properly we spent all the royal we spent a lot of time on the delivery system but the consumer has such an important role to play in terms of the the plan choice the provider choice the service choice and we need to find ways to bring the consumer more fully into decision-making my last thought is when I was at the school of public health my first lecture an epidemiologist got up and said you know some of you will die on auto accidents others of you will fall off ladders but most of you will die for from 100 small decisions you make every day and that has stuck with me in terms of our own involvement in determining our health and well-being and we we've just got to find a way to to grab that and pull that into the well California has demonstrated in a number of areas our ability to design develop and execute really innovative community based social norm change campaigns and tobacco is probably the best example of it and I point with just tremendous pride a state of our size and diversity and complexity we're second only to Utah in terms of prevalence and we're not second to Utah in I don't think anything else so it's a point with pride and you look at our lung cancer rates you look at you know all the key indicators it's really very powerful it didn't happen overnight but we have demonstrated in our state that through innovative multifaceted campaigns that are sustained over time and are reflective of the diversity of the different communities we're endeavoring to serve and and campaigns that are bottom up not top down that we really can't influence behavior and improve health outcomes we need to be applying and we are increasingly so around issues of overweight and obesity and the concomitant problems around diabetes and so on it's a lot harder obviously you don't have to smoke to live you need to eat to live but we have got to get our arms around issues around healthy eating active living safe communities it was something Governor Schwarzenegger cared a lot about it's something that secretary Dooley my my successor as agency secretary cares a lot about and it's something our board cares a lot about we we're trying to figure out yes we're purchasing health care but how do we also contribute to being part of this broader public health community and campaign hi Kim how are you thank you for being here what an honor for us to have you here today with us having to work for you for a couple of years as a director of the state health and human services I must share with the group that she's awesome very smart very cool but I saw you cry one time when you say goodbye to us I remember that so thank you for being here I have two questions in term of the essential health benefit package I'm sure the the board is thinking about parity for behavioral health and primary care and specialty and health services and all that what what what are the thoughts going on with that right now well essential health benefits as I noted the federal government has basically said to the state to the states broadly these are your state options from which to choose and once you choose that that will be the essential health benefit for the state of California there are federal mental health parity laws there are state mental health parity laws so those will be included consistent with existing law and again the the our elected officials haven't chosen which of the essential health benefit choices will will ultimately be used in California but mental health parity will be a part of that absolutely great thank you the second question I have is what is your vision or what do you think will happen to the health landscape in California in the next five years particularly including the I like how you turn you said it's unauthorized residents in the state what what what is what is your vision in the next five years for California in term of health you know it's such an important and sensitive issue and I should acknowledge Jane for being one of the things we need to do more in Sacramento is to rip off super smart county people to come and work in Sacramento and frankly I think we would be well served by sending super smart people from Sacramento to come and work in the counties what we do for the people of California it's not county versus state there's some time regrettably it feels a little bit like that but it is absolutely a partnership and one of the ways we strengthen that I think is by the kind of shared service and Jane was just a tremendous partner to Dr. Steve Mayberg in the Department of Mental Health and a great member of our overall team so delighted for you delighted for Santa Cruz that you have returned to the mothership and are providing good leadership here you know the undocumented unauthorized population is one that in 2007 when we did reform in California you know Governor Schwarzenegger to his credit he called it this challenge out specifically and he said we have got to come together and find better more cost effective more appropriate ways of providing services to people who remain outside coverage principally undocumented immigrants and the approach we brought then was with a particular focus on community clinics and really helping build capacity and strengthen the ability of clinics to serve as that in that essential safety net role it makes no sense for our major emergency rooms to be playing the oftentimes the first middle and last point of access for needed services federal reform is quite silent on on this population and it's going to require leadership by the states and by our state and as I noted in my comments the exchange is is not the panacea is not the solution to all of our problems but we very much see ourselves as a part of this this broader ecosystem this broader fabric and so we want to participate in the conversations that that need to occur and will occur I don't know what what the the the five-year out plan is if I could wave my wand it would look to be a community to have a community of clinics that that have greater capacity I worry a lot frankly about our clinics I think our clinics are facing what I call the the the trifecta of challenges on the one hand clinics who play such an indispensable role today as a point of care for underserved populations that is a role that will expand come 2014 many of the people that clinics serve today will become newly insured and so clinics are going to have to position themselves to be attractive competitive consumers are going to have choice in 2014 so on the one hand clinics are going to have to position themselves as a a a provider of choice clinics are also going to need to position themselves as an attractive partner with other providers you know as we know the world the independent of reform though accelerated by reform is this movement towards more integrated provider networks and so it's going to be hard I think for providers to stand as islands unto themselves so clinics increasingly I think are going to need to be a part of an attractive to be a part of these continuums of care but at the same time the third role is to continue to serve as a provider of last resort and I think our policymakers are going to have to spend some very how to spend some time and be very thoughtful about how do we ensure that there's clarity of responsibility but also sufficiency of financing and so I'm not sure what our role is going to be but I know we are committed to being a part of that thank you Jane my name is Kathleen Kilpatrick I'm a school nurse here in this community in Watson God love you thank you well God may love me but the government reimbursement is not in my favor California has one area where it is close to Utah and that is in the ratio of school nurses to students and it's pretty close to the bottom nationwide we are the first line care providers we are case managers we are advocates for all the students in public schools in this state and yet our state does not value us when I came to this district 12 years ago we had maybe five or six diabetic students and these are type one diabetics mostly not type two we have 50 now and you know we have we had 14 nurses at our peak and now we have three and a half to manage all the kids in our district and you know sitting here thinking listening to you it's come to my I've come to the conclusion back when I used to work in home care taking care of medically fragile children in schools the state paid for my services and the state no longer does that the state has passed the buck to the school district for the care of our most medically fragile children the school district is covering the bill for kids who have treks kids who have diabetes kids who have serious behavior problems kids with heart disease all kinds of things and and and these are kids children who are these are children who are uninsured children who often they're children with insurance but their parents are not in a position to be good advocates for them and they need health care management while they're at school and that has to be done by a person with the proper qualifications and that is the school nurses so you know I'm back to thinking you know what we need to be reimbursed for our work in the school district and every health care plan that's come from the federal state local level has left us out so what do you think you can do about well it's it's it's such an important question and um you know I had an opportunity to uh excuse me visit with the um school based health centers recently and to hear more from them about your your point in terms of the value that school based health centers um provide in terms of um providing access to essential whole diversity diverse array of essential primary care um services school based health centers do not replace the function of school nurses yeah no I understand but I but it's it's it's thinking about this broader fabric of care delivery and financing and it seems that we have some real challenges where we have providers of service that are playing an essential role in terms of improving access and outcomes and yet there's not a financing stream to support that and so I don't have a perfect solution for you what I can say is that as a as a purchaser and I think more and more purchasers and in the exchange will principally be purchasing on behalf of adults because most kids as we know are covered either through MediCal the Healthy Families program or commercial insurance um uh so we are principally purchasing on behalf of of adults but our our kind of orientation is to the extent we are as a purchaser saying we want to be purchasing for outcomes we want to be purchasing for health improvements we are sending signals to our health plan contractors that they better well be partnering with providers and community services that taken together can deliver on the outcomes we're looking to purchase and so you know it's it's not going to happen overnight but it's a matter of changing the financial incentives so that a health plan is saying a health plan say that's responsible for children if they're being held accountable for certain outcomes and school nurses are playing a critical role in terms of achieving that and can demonstrate that value to the provider network into the health plan then that should be creating an incentive for those provider networks to include school nurses well I think the problem is that right now there aren't enough of us to be able to feel like we can demonstrate good outcomes I mean I have kids that I deal with weekly or daily I know that they're going to die young because their diabetes is in poor control their health care services are over in um at Stanford or over over the hill that's where they go for services two or three times a year they don't identify with their local health care providers as being involved in their diabetic care they identify with actually the health assistant that they see every day and the nurse that they see maybe once or twice and you know there's not a whole lot I can do if you looked at my desk my desktop of my computer and my email queue you would see that you know putting together a data collection system to demonstrate the value of my services I don't have time with that I'm swamped with what I have to do day to day and that's absolutely understood and I think that's going to be one of the the tensions because I think increasingly whether it be the exchange purchasing largely on behalf of adults or the healthy families or the Medi-Cal program increasingly looking at performance and health improvements and holding their plans and by extension provider networks accountable there is going to be an expectation that if schools are looking to be reimbursed for health care services that they have that capacity to be a part of a provider network and to provide the the data and information to demonstrate their contribution to health improvement to demonstrate their quality and cost effectiveness I think that's where the market and the delivery system really is going and I think that's where your your challenge I'm hearing you say you don't have the the time and the capacity but I think there's going to be an increasing imperative to be able to demonstrate here is the cost effectiveness of the care you're providing and the contribution you're making to the health improvement goals yeah I think I think the basic problem is that I I hear a lot of what you're saying about market and value and competition and all that and a health care system that's built on the market model is never going to serve the needs of the underserved I've you know you can see that globally the ones that work are the ones where there's a single payer and it's all controlled through the public health network but but here and we want to hear hear from some other folks but I think but but anyway but as as as a state if you're purchasing on behalf of care for millions of children or if you're the Healthy Families Program Board purchasing on behalf of nine eight nine hundred thousand children there is an opportunity there as a purchaser to be saying these are the health improvement goals we have for children and to partner with their their plans and as we know Medi-Cal and Healthy Families partners with county organized health systems county sponsored local initiatives as well as commercial plans it's about accountability it's about health improvement and that is we may say the market is imperfect and the market is imperfect absolutely but increasingly it's I think it's appropriate and overdue for purchasers to be saying it's about outcomes it's about health improvement it's not about the volume of services it's about the value of services and and that is the direction that our delivery system is going and that's where I think purchasers have an opportunity to really emphasize that in a way that is grounded in health improvements and you all have an important story to tell and I think case to make about the contribution you make to quality and cost-effective care for children so continue your good work but I I hope you are a part of the broader changes unfolding thanks Kim I was going to start by thanking you so much for being here I work for assembly member Bill Monning here in his district office very good man taking copious notes but now I want to I mentioned in my comments how much I respect and admire the health committee that's why I keep that which I do thank you I appreciate that and we'll share that but I want to thank you Kathleen for I always wind up speaking right after somebody who points glaringly at where the state and the budget are falling short which leads you I could have seven questions out of the notes I'm taking I'll try to limit it my first is outside of the exchange looking at the current the current landscape of the state budget if you were to advise policymakers where their priorities in that conversation with the governor should be in terms of prevention and how we know years out and years out and years out this is going to not only be the public benefit that we know it will when we focus on prevention and chronics in that way but for the state dollars and how we spend our money in the future in the state what would your priority recommendations be that I could bring back to Bill well it's that's a sensitive issue given our state's extraordinarily constrained fiscal circumstances I do know that and having served in the positions in which I've served there there is no easy answer to that question for a variety of reasons both because of decisions that Californians have made through the ballot box the initial process as well as decisions that are placed upon our state by the federal courts as well as federal law our elected officials face a lot of constraints in terms of how to balance the budget and that effectively takes education off to the table proposition 98 puts certain guardrails around education funding the federal courts have been effectively running our prison system for many years we have federal legal constraints around physician reimbursement and and reducing benefits in Medi-Cal we have federal law that says eligibility for Medi-Cal cannot be reduced those are significant constraints that as a result put a lot of pressure on the remaining parts of the budget that actually can be reduced programs like our safety net programs so it's it's hard to respond to that that question in terms of where to invest where to prioritize when we are struggling as a state to maintain a reasonable and responsible safety net for people who have very very significant needs and I know these are issues that the chairman is really really grappling with I think there are opportunities in the context of federal reform there are some new funding sources that some of them have been scaled back but there are new revenues or resources being made available around prevention and wellness so we may have some of you may have heard around these community transformation grants but it's really all about providing federal resources to investing communities that will come together and identify their their priorities you know their their their needs consistent with their situation so in your community you may very well conclude in the Power of Alley one of your if you were to apply and I don't know if this community has applied but that could be an opportunity to secure resources to bring together very collaborative community-based strategies to tackle some significant public health challenges I wish I could say just first do no harm but in this budget environment there there will be harm there there are no choices that will not hurt people in need so I don't have a good answer to that I don't envy the our elected officials and just to point out that for Bill to be in a position to have those conversations on strategy and thinking outside of the box and there's only so much resolution Sacramento can do this year so thinking years out but also thinking locally and how to make sure those funding opportunities to catch safety net fall through I appreciate that and that's definitely yeah and another near-term resource of course is is we have we are very fortunate as a state to have a lot of health care foundations at the local regional and statewide level that are very much invested in community in prevention and public health and they are a very active partner with the exchange in terms of helping us think through how we can use our purchasing authority to advance not just changes in a clinical setting but in a broader community setting thank you I appreciate it I'll save my other questions and figure out all right communicate with you and then these will be our last questions okay I can Larry D. Gattalli Pamp I'm I'm going to tell a story and then ask a question six years ago there was a try to keep this private but six years ago a family in Santa Cruz had a tragedy and overnight three children were left without their parents and we we got a call my medical group got a call two days later from a distraught aunt of these children who is a practicing physician in Denver and she said I need a job and I need a job immediately I'm going to relocate to California but I don't have a California license I called the medical board and it will take me six months to get a license I cannot come to California to do I don't have the financial resources primary care physician and so I called John Laird and I said John what can you do to help this doctor in this situation he knew about the you would all know what the story was and he said I'm going to call somebody in the governor's office and I said but you're a liberal Democrat how are you going to possibly get through I don't think the governor is and he said well I know somebody by the name of Kim Bell Shea two weeks later we had a medical license for this doctor so thank you so the the question is I met with Peter Lee a few weeks ago one of his stakeholder sessions and Peter I asked he was describing the all the obligations that the exchange is going to have and I in the context of diabetes here's here's the question we know every diabetic in our group whose A1C is greater than eight and the truth is it costs less for us to lower the A1C for an affluent patient than a low income low literacy patient these are the patients that are we're going to be caring for and the exchange is going to the newly insured you know the adverse risk how in the world can we deliver the care we need for these patients at the price that you must come to the market with that is how can we deliver care to the the patients that it's going to cost that we know historically would cost more to provide the value to given the fact that they're going to come in with the burdens of poverty the burdens of you know of low health care literacy first off John Laird is a you all are blessed by your elected leaders just terrific individuals and now John of course is serving the the Brown administration very ably and I'm glad you had a chance to visit with Peter Lee Peter Lee is our executive director of the exchange board who works 24-7 on these challenging issues and you're you're quite right these are the big big questions how do we structure benefits in a way that is number one affordable I mean affordability when you look at the profile of the people that we will be serving again it's people between 138 and 400 percent of poverty about $24,000 and $80,000 a year for a family afford these are people who don't have a lot of discretionary income we heard from a lot of them yesterday in Fresno about how hard it is to come up with the $20 copayment so we also know the single most important thing that they look to frankly is is cost so we are going to have to deliver an affordable product but I think we and I can just speak for myself but I'm sure Peter articulated this we also bring a really strong belief that we can and must do a better job in terms of how we finance and deliver services that get at these underlying drivers so that you have someone who is diabetic or pre-diabetic that we are organizing services and using financing in a way that incentivizes not just a doctor but perhaps a team to really identify and coordinate the care of that individual recognizing that that person is going to be better off from a health perspective and a lower utilizer of health care services so it's aligning the financial responsibilities in a way to incentivize early and ongoing care better coordination a patient-centered approach and improved outcomes and that there's a financial reward if you will for doing that now will those types of reorganized delivery models occur overnight no they probably won't they're already unfolding probably in your community just as they are a statewide accountable care organizations payment bundling all sorts of different models it's a time of remarkable innovation and transformation but I think this is the right direction in terms of focusing on health improvements and paying for value not for specific services and that's what's happening with too many people who have chronic diseases we're treating the disease we're not investing in prevention and early intervention and that's what our exchange board is trying to figure out what role can we play in terms of accelerating this movement towards reorganized delivery systems that really reward the quality reward the health improvement not just the services delivered and we're eager for your input in terms of how we can do a good job with that the final word because I see my friend paul tang and he's he's not a very patient man this is quick i'm dana kent from natividad medical foundation and natividad medical center which is our county safety net hospital in monterey county and my question you alluded to this with the supreme court hearing the unprecedented oral argument next week on on the health care reform law i wanted to just make sure i understood my understanding that the exchange in california regardless of the outcome of what happens with the supreme court is up and running and intends to continue but i just wanted to see if you could speak to that with this uncertainty next week uh thank you yeah thank you for um that that question uh it's actually a hard question to answer because there's so much uncertainty around what the supreme court will do the supreme court has multiple decisions before it um so we know that they could take an action that ranges from um a uh endorsement of reform uh in all of its components and rejecting the the four principal legal arguments against it um to the end of the continuum saying the whole thing is is overturned um to a more surgical strike if you will such as saying the individual mandate or you know the requirement that people have to buy insurance that that one piece is unconstitutional if so and if there are federal dollars these these subsidy dollars i mentioned the tax credits those are exclusively federally funded if those dollars were to continue um then state state policy makers would have a question which is so do we continue to go forward without an individual mandate or is there some state legislative action we may need to take just like massachusetts had an individual mandate just like california considered an individual mandate in 2007 that is a policy tool available to state lawmakers so to be honest we haven't spent a lot of time with scenario planning because it's just like it could make you crazy because there's so many different scenarios and because we have so much work to do but i like to believe just as um we endeavored in 2007 and then the state stepped up in 2010 that regardless of what happens with the supreme court this governor this legislature the people of california most fundamentally will continue to see the imperative to move forward with comprehensive reform and do so in a way that makes sense for the people of california and in particular for our underserved communities who really can't afford to wait for another federal law if it is overturned we have a responsibility to our communities to our residents and we're eager as long as the law is in force to move forward and we want to do it with you so thank you for your leadership at the community level for the people you serve and for your partnership with with us and our important work together thank you