California’s healthcare experiment pushes the boundaries with a $12 billion investment in Medicaid

Jorge Sanchez, a young boy from Turlock, California, experienced a constant struggle for breath throughout his early years. He would often cough so intensely that he would almost vomit. Worried about his well-being, his mother would rush him to the emergency room and even sleep beside him to ensure he didn’t stop breathing.

Fabiola Sandoval shared her son’s, Jorge, struggles with asthma that have been persistent since his birth. She expressed the difficulty of understanding the triggers that worsened his condition, leaving her desperate for a solution. Witnessing her child in pain, Fabiola was willing to explore any possible remedy.

In January, Sandoval’s home in Turlock, a city in California’s Central Valley, was visited by community health workers. They thoroughly examined the house to identify any potential hazards. During their visit, they informed Sandoval about the potential triggers of asthma attacks, such as harsh cleaning products, air fresheners, as well as dust and pesticides that float in the air due to nearby fruit and nut orchards.

The team additionally supplied Sandoval with air purifiers, a high-powered vacuum cleaner capable of extracting dust from the air, hypoallergenic mattress covers, and a humidity sensor—products that can cost hundreds of dollars. In just a matter of months, Jorge experienced improved breathing and regained the ability to freely engage in outdoor activities.

Medi-Cal, California’s Medicaid health insurance program for low-income residents, covered the cost of the in-home consultation and supplies.

Gov. Gavin Newsom is leading a bold $12 billion initiative aimed at revolutionizing Medi-Cal. Under this plan, Medi-Cal will not only function as a health insurer but also provide social services. In addition to doctors and nurses, the program will involve community health workers and nonprofit organizations that offer a wide range of services. These services include providing nutritious meals and assisting homeless individuals in securing housing.

In California, these groups are reshaping the healthcare landscape as they vie with businesses for funding and integrate into the extensive Medi-Cal system. Serving almost 15 million low-income individuals with a budget of $158 billion, they are becoming an integral part of the state’s healthcare infrastructure.

However, delivering the new services has been hindered by worker shortages, negotiations with health insurance companies, and complex billing and technology systems. As a result, only a small fraction of eligible patients have received benefits, despite being three years into the ambitious five-year experiment.

Kevin Hamilton, a senior director at the Central California Asthma Collaborative, expressed that the current situation is still very new and that everyone is feeling overwhelmed. As a result, progress is moving at a slow pace.

According to Sandoval, the collaborative has provided healthcare services to approximately 3,650 patients in eight counties since the beginning of 2022. One of those patients happens to be Sandoval’s son, Jorge. The collaborative has a long-standing history of working with Medi-Cal patients in the Central Valley and has received around $1.5 million from the new initiative’s funds.

CalOptima Health, Orange County’s primary Medi-Cal insurer, is relatively new to providing asthma benefits and has enrolled a total of 58 patients thus far.

According to Kelly Bruno-Nelson, the executive director for Medi-Cal at CalOptima, the lack of a nonprofit infrastructure makes it extremely challenging to establish asthma services. Bruno-Nelson emphasizes the need for more community-based organizations to step up and address the needs of a population that is often overlooked.

Meet basic needs, reduce health care costs down the line

California Governor Gavin Newsom, a Democratic leader currently serving his second term, has introduced an ambitious health care initiative called CalAIM. This groundbreaking program aims to address the escalating costs associated with providing care for the most vulnerable and marginalized individuals in the state. This includes homeless Californians, foster children, individuals transitioning from incarceration, and those struggling with addiction disorders. With CalAIM, Governor Newsom aims to create a more cost-effective and comprehensive healthcare system for all Californians in need.

CalAIM provides a range of social services, along with one-on-one care managers, to assist eligible patients in improving their health. These services cover various areas such as asthma remediation, grocery shopping, and job hunting.

According to Newsom, the objective is to promote better health and prevent expensive medical treatments like emergency room visits, which would ultimately lead to savings for taxpayers.

The 25 managed-care insurance companies in Medi-Cal have the flexibility to select and offer specific services. They collaborate with community groups to ensure the provision of these services. Through extensive negotiations, insurers have established approximately 4,300 contracts with both nonprofit organizations and businesses, varying in size and scope.

According to state data, approximately 103,000 Medi-Cal patients have already received CalAIM services, and around 160,000 have been assigned personal care managers. These numbers represent only a fraction of the eligible patients, which is estimated to be in the hundreds of thousands.

Helena Lopez, executive director of A Greater Hope, a nonprofit organization that offers social services in Riverside and San Bernardino counties, acknowledges that everyone is new to the healthcare system. She emphasizes that learning to navigate the bureaucratic aspects of healthcare can be overwhelming for many, as it is an unfamiliar concept. A Greater Hope focuses on providing various social services, including distributing baseball cleats to children to encourage them to stay active.

Small nonprofits, big start-up costs to get paid by Medicaid

Tiffany Sickler is the head of Koinonia Family Services, a California-based organization that provides mental health and various other forms of care for foster children. Despite their commendable efforts, the program is currently facing financial difficulties due to limited funding.

“In order to receive payment through CalAIM, one must familiarize oneself with these new systems,” she explained. “It has been a steep learning curve, consuming a significant amount of time and causing frustration, particularly in the absence of sufficient funding.”

According to Brandon Richards, a spokesperson for Newsom, CalAIM is at the forefront of healthcare and the state is actively promoting awareness and support for these innovative services.

Nonprofits and businesses have the chance to make money through CalAIM, an opportunity that state health officials are aiming to establish as a permanent arrangement. Under this program, health insurers receive substantial payments from the state to extend their services to more individuals and provide new offerings. In turn, they share a portion of these payments with service providers.

Mom’s Meals, a company based in Iowa, is vying for the new funding alongside national corporations. They specialize in delivering prepared meals throughout the United States.

Mom’s Meals holds an advantage over local nonprofit organizations due to its extensive experience in catering to seniors on Medicare. As a result, it was able to swiftly provide the CalAIM benefit, which involves delivering meals to patients with chronic illnesses. However, despite its efforts, Mom’s Meals faces the challenge of not being able to reach all eligible individuals. This is primarily because doctors and patients are often unaware of this available option, as noted by Catherine Macpherson, the company’s chief nutrition officer.

She mentioned that the utilization is not as high as it should be at the moment. However, their advantage lies in the fact that they already had dedicated departments for billing and contracting with healthcare.

Middleman companies are also eyeing the billions of CalAIM dollars and are emerging to help small organizations compete with established ones like Mom’s Meals. For example, the Nonprofit Finance Fund, based in New York, is providing guidance to homeless service providers on securing more contracts and expanding their benefits.

Full Circle Health Network, which consists of 70 member organizations, is playing a crucial role in assisting smaller nonprofit groups in developing and offering services primarily focused on families and foster children. In an exciting development, Full Circle has recently entered into a partnership with Kaiser Permanente, thereby granting the renowned healthcare giant access to its extensive network of community organizations.

Camille Schraeder, the CEO of Full Circle, emphasized the positive impact of their organization in enabling faster and wider access to benefits for various organizations. She highlighted that this support is particularly beneficial for grassroots organizations that have the necessary local knowledge and trust but may be inexperienced in healthcare matters.

Finding eligible patients and persuading them to participate poses a significant challenge for community groups, as it requires hiring skilled workers who can effectively fulfill these roles.

According to Kathryn Phillips, a workforce expert at the California Health Care Foundation, community groups lack sufficient funding to hire workers and invest in new technology platforms. She emphasizes the importance of these groups in providing the trust, cultural competency, and diversity of languages needed in healthcare. However, Phillips asserts that additional funding and reimbursement are necessary to strengthen this workforce.

“We are providing assistance in not only addressing their staffing shortage, but also teaching them how to strengthen their healthcare infrastructure,” he explained. “Although everyone desires quick success, it is important to note that this endeavor will require time and effort.”

Jorge Sanchez is among the fortunate early recipients of CalAIM in the Central Valley.

His mother attributes the success in managing her son’s asthma to the trust she built with the community health workers. They dedicated numerous hours and made multiple visits to educate her on controlling the condition.

Sandoval mentioned that she used to enjoy cleaning with bleach, but she later discovered that it can lead to respiratory issues.

Ever since Sandoval put into practice the suggestions given by the health workers, Jorge has been able to sleep by himself at night for the first time in four years.

Sandoval expressed her amazement at the program and the array of resources available. She gestured towards the dusty dust cup in her new vacuum cleaner and shared her joy in seeing her son experience fewer asthma attacks. Now, he can freely engage in activities and enjoy a normal childhood.

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MBS Staff
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