You would be hard pressed to find anyone with a greater breadth of understanding and experience in navigating the complex Golden State health care system than Diana Dooley, California’s secretary of Health and Human Services. Born and raised in the Central Valley, Dooley has spent the bulk of her professional life working in health advocacy, most of it on behalf of California children. These days, she is also the chair of the California Health Benefit Exchange Board, the agency tasked with implementing the online insurance marketplace, dubbed Covered California, that is critical to the success of the Affordable Care Act. We sat down with her recently to talk about the agency’s progress and challenges in implementing this historic change in the American health system.

Comstock’s: First, will California be ready to begin enrolling people in health benefits exchanges on Oct. 1 and to fully implement the Affordable Care Act (Obamacare) by the Jan. 1, 2014 deadline?
Dooley: Those are two very different questions. We are going to be ready. It will be in the fall, but it may be a little past Oct. 1. Even so, we have planned for three months of open enrollment prior to January, so if it isn’t Oct. 1 we still haven’t lost a lot. And then the open enrollment is going to go for 30 days into the new year, so we’ll have a cushion. But we are on track with all of the markers that we have set, and we will offer coverage on Jan. 1. The biggest challenge, as always, is building the IT system. We are on a very compressed schedule, so even with a very reliable vendor, with the very best people and all the resources and with the federal government putting up all the money to get this built on time, things can still go wrong.

Comstock’s: There are some big names among the health insurers who have opted to not participate in the exchange. Are you satisfied with the options consumers will have?
Dooley: I’m very satisfied. We made it very clear that we wanted to have a partnership relationship with the plans and the providers, and we have all of the major players in the individual market. There’s been some press about Aetna and United (Healthcare Services Inc.) not participating, but those two companies have less than 7 percent of the individual market. Since then, Aetna has also announced they’re getting out of the individual market in California in favor of the employer market, which is their own business model. We invited all comers, there was no one excluded. We had over 33 issuers that expressed an interest, and they all looked at what the conditions are going to be and what their own business needs were. They’ve agreed to all of our terms and conditions and are in it for the long haul, as are we. So I’m very satisfied that the plans in the exchange are qualified health plans.

Comstock’s: Medi-Cal, the state/federal health insurance plan for the poor, is a huge concern here, too. California has accepted the ACA’s call to expand the program, and the federal government will provide 100-percent reimbursement for new Medi-Cal (Medicaid) patients for the first three years. That eventually drops to 90 percent in 2020, but some believe that level could be volatile. Here in California, we passed legislation allowing us to opt out of Medi-Cal expansion if federal cost-sharing drops below 70 percent. Did our lawmakers do enough to protect California financially?
Dooley: I think in the process of the budget overall, there was a very good give and take, and I’m very comfortable with where they settled. Fiscal uncertainty has always been a concern with things that involve federal participation. But we have a backstop if a funding cut happens. As you said, the federal rate won’t reduce to 90 percent until 2020. I think part of that was in recognition that these people who will be newly eligible have been left out of the system for some time. They have not had regular care, so there will likely be some additional cost at the beginning that should level out over time. When we do shift in 2020, I hope we’ve been as successful at moving people into systems of care that promote health and are costing the health care delivery system less.

Comstock’s: What are some of those cost-control elements?
Dooley: There are many. For one, we’re changing how we manage people who are eligible for both Medicare and
Medi-Cal. Not all Medicare recipients are seniors; there are people on Medicare with disabilities, and if they’re totally disabled they’re on Medicare at a younger age. Many are so low income that they’re also eligible for Medi-Cal. So there are different services that are paid for by either program, and they have been completely uncoordinated in the past. The Affordable Care Act provides a way for us to better coordinate that care and to offer incentives to provide care in a more efficient way. One of the principles of the Affordable Care Act is to move away from a fee-for-service model to a payment-for-outcomes. So right now, you get paid for how many procedures, how many tests, how many office visits. California has been a leader in managed care where we pay a capitated rate. Kaiser is the best example, but there are many other health management organizations that take an amount of payment per enrolled person and then they manage that care in a way that lowers cost. So we’re pushing to expand that even further.

Comstock’s: There has been strong concern among hospitals that the ACA penalizes them with lower payments when a patient has to return to the facility within a short time for the same problem. Can you explain this?
Dooley: This is primarily in the Medicare program. The state doesn’t have much to do with the management of the situation, though we are looking at how it impacts the duel-eligibility people I mentioned. I think all health care observers believe that when you are discharged from the hospital, there should be a plan for your effective care. If you have to come back into the hospital within 30 days, there’s a presumption that you didn’t get the right discharge care, you didn’t get the right planning, you didn’t get the right follow up. So the readmission rates under the Affordable Care Act are designed to give hospitals the incentive to put the right discharge planning team together. It could be as simple as having a case manager at the hospital following up with the primary care doctor to be sure a patient has come in for his appointment or who will call the patient to be sure they are taking their medication.

Comstock’s: That would seem to be a real benefit for older patients. So much of our health care comes in the latter stages of our lives, and nobody wants to be in the hospital if they can avoid it.
Dooley: And everybody needs help. We all need a health advocate. We all need somebody to help us understand the medications or check to see if we’re taking them. A lot of people don’t have a partner there to help them late in life. I think there are a lot of advantages, but it does require an understanding that we’re looking to improve quality. We will also save costs, but it’s a mutual need.

Comstock’s: So much of the success of the ACA in California is going to depend on getting as many eligible people as possible into the system. I know you’ve been working hard on an outreach plan to educate Californians about all this. How will that outreach plan work?
Dooley: Our outreach in education is in three basic categories of activity. The first is a series of training grants issued to about 48 community organizations who are being trained on the operation of the product and how to be enrolled and what the ACA is about. That started in July. The second part will be actual enrollment. We’ll have perhaps as many as 20,000 enrollment counselors throughout California. Some will be employees and volunteers within these community organizations, and some will be employees of providers, hospitals, clinics and doctors’ offices. Those enrollment counselors will all be trained, they will have background checks and they will be certified as competent and responsible to help people actually enroll in Medi-Cal or Medicare. The third part will be the broadcast messages — radio and television and billboards and flyers. The federal government will also be running its own campaign that will go on across the country for how to enroll and what the Affordable Care Act is. So it’s a tiered process going from the top with the national messages to our broadcast messages in California to the outreach of the community groups that are trusted by the people of our state.

Comstock’s: We often talk of “known unknowns” vs. “unknown unknowns.” With so much of this still in the latter category, what is your biggest concern at this point?
Dooley: I see full implementation and a fair assessment of success being about two or three years out. I think a lot of people will want to define success much sooner than that, but this is going to be a big lift for a long time. We have in our projections at Covered California a baseline and an enhanced objective to meet for enrollment. Clearly, the ultimate success is people getting the care they need, and that’s at the very end. What we have to do right at the beginning is get people the coverage they need. I think we have a very good plan, but there are still a lot of places where we can go off track. We’re on track now, but we’re going to have to stay with this and be nimble and be willing to make course corrections, as we have getting to this point. If so, I think we have a fair chance at making a lot of lives better in California.

Comstock’s: Does the Obama administration’s decision to delay mandating large employers to provide workers with health care impact anything we are doing here in California?
Dooley: We don’t believe it does. It definitely doesn’t have any impact on small employers. We will continue to seek further guidance from the administration regarding individuals who say they are employed by a company that doesn’t offer insurance or for one where the insurance is unaffordable, but it should not in any other way affect us.

Comstock’s: What does your gut tell you about what this means for the overall health of the law? 
Dooley: We have a very complicated system, far more so than when we created Medicare and Medicaid 50-plus years ago. It’s also far more complicated to change an existing system than it is to create one from whole cloth the way we did with those programs. Given that complexity and that we’re modifying it in very significant ways, there are going to be places where it won’t work exactly as it was originally designed. That’s why the U.S. Secretary of Health and Human Services (Kathleen Sebelius) has the flexibility to reconcile these issues and to make the law work. At the state level, we also know there are going to be times when we need to make course corrections, whether administratively or within the law itself. We won’t know until we get a little further down the road. These are big programs with a lot of moving parts, but we will be able to make our rules on the basis of actual practices. We’re still speculating about a lot of what could happen, so the more data we can gather as we go, the better we can accommodate the Affordable Care Act’s goals.