L.A. Care’s longtime CEO is stepping down after navigating major Medi-Cal changes

Written by Bernard Wolfson | KFF Health News

For nearly a decade, John Baackes has led LA Care Health Plan, a publicly run health plan serving low-income Los Angeles County residents on Medi-Cal. It is the largest Medi-Cal plan in the country.

Baaces, 78, who will retire at the end of the year, helped turn LA Care into a major player in the market after its expansion under the Affordable Care Act. He implemented a new management structure and promoted a new internal culture. The insurer generated $11.3 billion in revenue last year, and its membership is close to 2.6 million people — nearly 900,000 more than when Baackes took over in March 2015.

“I realized when I got here that LA Care was a big frog in a big pond,” he said in an interview with California Healthline on the 10th floor of LA Care headquarters. But the organization still had a small idea, he said, until he convinced his staff “that we really have the opportunity to be leaders.”

Baackes moved to Los Angeles from Philadelphia, where he led AmeriHealth Caritas VIP Care’s Medicare Advantage business. He started at LA Care 15 months after the implementation of the ACA, which expanded Medicaid eligibility and created an insurance exchange where uninsured people could buy federally funded coverage.

LA Care’s Medi-Cal rolls increased, and it offered a new health plan sold on the state’s ACA exchange, Covered California, as well as for medically vulnerable adults who are both eligible for Medi-Cal and Medicare.

But Baackes saw that LA Care did not have the right structure to manage the large organization it had become. So, he hired managers to oversee each of the health projects and revamped the chain of command.

The changes required a long adjustment period, Baackes recalls. Then, “one day one of the officers came to me and said, ‘First I have to talk to everyone, but now I know who to talk to.’ I thought, ‘Okay, phew, now we’re moving forward.’

Baaces has sometimes lashed out at state officials and regulators, including when L.A. Care was fined $55 million in 2022 for “serious, systemic deficiencies that threaten the health and safety of its members.” .” Baaces thought that the fee was not justified. LA Care filed a claim and has not yet paid.

Baaces, who will retain his position as chairman of the Charles R. Drew University of Medicine and Science, a medical school that trains health professionals to work in unsafe environments, explained the system’s weaknesses and successes. US health and Medi-Cal, covers more than a third of the population of California.

Like many of his colleagues, he believes Medi-Cal’s main flaw is low payments to providers, exacerbated by a lack of health care work. That discourages doctors and other providers from taking Medi-Cal patients, limiting their choices and increasing their wait times for care. He supports Proposition 35, a measure on the ballot this November that would permanently save money to increase Medi-Cal payments.

LA Care addressed the workforce shortage by creating a $205 million fund to pay for medical school scholarships, help clinics hire doctors, and provide educational grants to doctors working in safety settings. Jennifer Kent, former director of the California Department of Health Services, which oversees the Medi-Cal program, said she was surprised Baackes used taxpayer dollars and his agency to help fund those projects.

“John clearly has an appreciation and passion for the program and what it stands for in terms of its power to change people’s lives,” Kent said.

This interview with Baackes is edited at length and in detail:

Q: Voters will decide, with their vote on Proposition 35, whether money from the industry tax will be locked into Medi-Cal forever, blocking Gov. Gavin Newsom’s deficit-funding plan. government budget. Where do you stand on this?

I understand that they have a budget deficit, and they have to do something about it. But we must have the security of the funding, and if a decision will be made on each budget, there should be other policies and priorities. This is how education works. They went to the polls to lock in their share of the budget, and I think the health of over a third of the population is as important as education.

Q: Medi-Cal has begun a major expansion, which includes comprehensive coverage for all immigrants, incentives to increase the amount of primary care provided, elimination of means testing, and continued coverage. first for children up to 5 years, among others. . Does the lack of a Medi-Cal provider reduce the chances of this effort?

Really. If we’re going to give people extended access, we have to have the tools for them to use it — unless we’re going to say, “Yes, you have access, but find it yourself.” When we look at Los Angeles County, we have a lot of doctors who are in areas like Beverly Hills and Santa Monica. But when you go to South LA, the Antelope Valley, it’s a different story.

Q: What do you think of the Office of Health Care’s goal of reducing the annual cost of health care increases to 3.5% initially, and eventually to 3%?

It’s well intended, but I don’t see how it can work without causing a lot of damage along the way. You can limit disposable income, but that doesn’t fix the underlying drivers of why it costs so much.

Q: So it could end up reducing patient care?

Yes. I think so. Because if doctors and nurses want higher salaries and can order them because there are not enough people, then having a system hammer that you cannot use more will not work.

Q: Many people would say that the entire US health care system, not just Medicaid, they are patients who fail. Access to care, and its cost, is difficult for many people. How do we fix the system?

We need to simplify the regulatory environment. Whether it’s commercial insurance, Medicare, or Medicaid, policies are piling up and costing money. Second thing: I think that mainly the security providers would have to say that there can be no for-profit or private investors in the area. I am not against capitalism. I just think if you’re going to make that money with a system that doesn’t get enough money first, something is lost.

Q: What are your thoughts on the California Advancing and Innovating Medi-Cal (CalAIM) program, especially community supports like special meals, home modifications, and housing assistance?

CalAIM is a wonderful program in the sense that it begins to recognize that social determinants affect your life. So we finally say, “Okay, we’ll put money in to pay for those.” But the trade-off is that they want to reduce medical costs by making these investments. The problem is that we are trying to save the dollar which is already heavily discounted. Among the 14 social supports they have, the one I can think of is medicated food.

Q: How has your perspective on health care changed?

What I have learned and experienced is that health care is part of social justice, and we have to think about it that way. Any way of thinking about it will create winners and losers.

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