San Fransisco Chronicle by Andrew S. Ross
January 21, 2013
One of the people who got a presidential kiss on the cheek at the inauguration celebration on Monday was Health and Human Services Secretary Kathleen Sebelius.
An apt gesture, seeing as Sebelius is the point person implementing what will probably be the most enduring legacy of Barack Obama’s presidency – health care reform. By the end of his second term, virtually all the provisions of the Affordable Care Act will have been implimented.
Some provisions of the Affordable Care Act – allowing children to stay on their parents’ plan until their 26th birthday, for example – are already in effect. But a measure of its impact may be felt beginning in October, when millions of Americans begin signing up with the new state-run health exchanges.
“Even then, we’ll get a sense of the Obama legacy,” said Micah Weinberg, a California health care consultant and senior policy adviser at the Bay Area Council. “And the work being done in Washington and Sacramento will have a lot to do with that legacy.”
Last week, Sebelius’ department awarded California’s embryonic health exchange, named Covered California, $674 million to develop a health insurance marketplace for up to 5 million residents. The award was part of $1.5 billion in grants to 11 states building health exchanges, which start providing coverage, with tax breaks for those eligible (up to 600,000 in California), in January 2014.
“It’s a big deal, but it’s not just the size of the amount,” said Executive Director Peter Lee, referring to California’s grant share. “It’s an affirmation that California has its ducks in a row. It gives us the tools to move forward, to have a direct and immediate impact on millions of people.”
Much of the money will be spent on the system’s infrastructure, including a technological backbone that ensures transparency of information and ease of access. By June, Covered California will release its list of approved health care providers, among the 30 or so that have applied – or, like Anthem Blue Cross, Blue Shield, Kaiser Permanente and Molina Healthcare (which specializes in Medicare and Medi-Cal services) that have publicly filed an “intent to bid.”
The first two names on the list, along with Aetna, were in the news recently, with rate increases of 20 to 26 percent for certain policyholders, which California Insurance Commissioner Dave Jones blamed on “a huge loophole in the Affordable Care Act.”
“There will be sticker shock for some,” especially for the more affluent who aren’t covered by their employers, and for some hospital patients in high-cost facilities, like in San Francisco, said Weinberg.
“Insurance companies are building in the anticipated costs of implementing health care reform now. You can lambaste them, but raising rates now could mitigate the shock of increases that would otherwise come down the road later,” he said.
On the other hand, there are provisions in the act – and steps already being taken by insurers, hospital networks and physicians’ networks – to consolidate, streamline and coordinate operations, thereby bringing down costs.
“I think bending the cost curve will be viewed as one of the greatest accomplishments of Obama’s health care reform,” said Lloyd Dean, CEO of San Francisco’s Dignity Health, which has 43 hospitals in California, Nevada and Arizona.
However, one issue being “under-observed,” he believes, is the shortage of doctors, especially with millions more Americans signing up for health insurance. “We’re going to need more primary-care training, more mental health resources and a buildup in physician capacity,” said Dean – one of “the 10 health care leaders I rely on or bounce ideas off of,” Sebelius told Fortune magazine earlier this month.
But with issues like gun control, immigration reform, the deficit and climate change already filling up Obama’s second-term agenda, isn’t there a risk he’ll take his eye off the health care ball?
“I think not,” said Dean, a longtime friend of Obama’s, with whom he regularly meets. “He’s been very consistent and very purposeful in utilizing Secretary Sebelius to make sure health care reform moves forward.”
But the administration can’t do it alone, he added.
“It has to engage the states and all the various constituencies in the implementation of reform. This is a work in progress. It isn’t perfect. Some of the changes will need to be refined,” he said. “The other thing to make sure is that individual responsibility for one’s own health becomes a key element. It can’t be just about getting insurance, but also about eating right, not smoking and getting regular checkups.”
Dean believes we’ll have a better sense of Obama’s health care legacy by the end of his term. “I think a decade from now, we’ll look at the impact of health care reforms and say it was truly transformative.”
An opposing view: Last week on NPR, Whole Foods CEO John Mackey likened Obama’s health care reform to “technically speaking more like fascism.” He later walked the term back a bit, telling “CBS This Morning,” “We need a new word for it. I don’t know what the right word is.”
Nevertheless, controversy ensued.
Maybe Mackey can be persuaded to expound on the notion when he appears in San Francisco on Tuesday and gives the keynote address at the 38th Winter Fancy Food Show at Moscone Center (scheduled for 8:30 a.m.), or at 6:30 p.m. Tuesday at the Commonwealth Club or 7 p.m. Wednesday at the Oshman Family Jewish Community Center in Palo Alto, where he is scheduled to have a conversation about his “conscious capitalism” campaign with Nikki Henderson, executive director of Oakland’s People’s Grocery (no, really).
Hedging bets: Dell has hired a New York investment bank to see whether it can get a better offer for the PC company than the one offered by Menlo Park’s Silver Lake Partners.
The so-called “go-shop” process is intended to avert blowback should the Silver Lake leveraged buyout deal get to the announcement stage, possibly this week. It will be conducted by Evercore Partners which, on behalf of the Dell board, will see who else might be interested – at a price higher than the estimated $20 billion to $25 billion offered by Silver Lake and yet-to-be-named partners.
“Dell expects shareholder lawsuits if a deal is announced,” sources told Bloomberg.