Motion by Supervisor Zev Yaroslavsky

March 27, 2001

MOTION BY SUPERVISOR ZEV YAROSLAVSKY

Relates to Item 34

The Board has been reviewing the feasibility of establishing a health program for In-Home Supportive Services (IHSS) workers since December, 1999. The reports provided by the Chief Administrative Officer (CAO) and the Director of the Department of Health Services (DHS) on this issue have brought us to a point where we can now proceed to implement the program.

The review of the IHSS program has focused on a choice between L.A. County’s Community Health Plan and L.A. Care’s Health Plan. Based on this review, the Community Health Plan is the appropriate choice. This is supported by a number of factors:

The structure of the health plan will be based upon the County’s health system. The CHP reflects this structure. LA. Care does not.
Use of the CHP assures that County funds will go to County programs. Selection of L.A. Care means County funds will go to L.A. Care.
L.A. Care projects higher administrative costs than the CHP.
The CHP is financially sound. An independent audit reflects a substantial fund balance as of June, 2000.
The CHP has been in existence for 15 years. The L.A. Care HMO has been operational for less than two years.
With 124,000 members, the CHP has proven it can serve a large membership. The L.A. Care HMO, with 6,000 members, has not.
Selection of the CHP will provide funding to strengthen its infrastructure.
The IHSS workforce reflects a natural alignment with the represented workers of the County health system. This will stimulate incentives to maintain high quality medical services, contain utilization within County facilities, and strengthen alliances for future support of the County health system.

While these are convincing reasons to support the CHP, several parts of the program need improvement. These include information systems, contracting and health education services. As outlined in the March 26 report from the CAO and the Director of DHS, there will be start-up costs associated with these and other improvements.

The analysis of the health needs of the IHSS workforce indicates that program costs will be high. The profile of IHSS workers reflects a population that is older and in generally poorer health than other low-income groups, such as the family-based population served by Medi-Cal managed care plans. This, coupled with rising costs for prescription drugs and other medical services, will increase the cost of caring for this population. Because of these factors, successful implementation of an IHSS health plan, without incurring additional costs to the County, is contingent upon State approval of a reimbursement rate structure sufficient to cover these costs.

Assuming Board approval of the CHP/IHSS health plan, the process of implementation will be complex. As the employer of record, the Personal Assistance Services Council (PASC) must negotiate with IHSS workers the terms and conditions of the health plan. To assure financial viability of the PASC, DHS must allocate a portion of the IHSS health program budget to cover PASC administrative costs.

DHS must prepare an application to the State for a material modification of the Community Health Plan. This application will establish the documentation necessary to justify an appropriate reimbursement rate structure for the program. DHS must make improvements in the information systems and other administrative infrastructure needs of the CHP. Finally, DHS must prepare its facilities and staff for the new program. Based on the timing of these tasks, implementation of the new plan in terms of membership coverage is not likely to begin before January, 2002.

One issue which remains unresolved is the question of worker eligibility for the health plan. IHSS workers spend, on average, about 85 hours per month on the job. The DHS financial review confirms that most scenarios regarding eligibility, based on hours worked, project a positive bottom-line for the County. However, there may be a break-even point at which coverage for those who work less than a certain number of hours will not be cost-effective.

Rather than deciding today on eligibility criteria based on hours worked, I suggest that the Board defer this matter to the negotiation process between the PASC and IHSS representatives. The principle governing these discussions should be to structure the eligibility criteria and other factors in such a way as to assure cost neutrality and to protect the county against financial risk.

The establishment of a health plan for the IHSS workers is an important opportunity for Los Angeles County. By providing coverage to a large segment of our uninsured population, we are showing in a very innovative way our commitment to meet the health care needs of the medically indigent. While implementation of a program of this magnitude is difficult and has some risk, the time has come for the Board to make a decision on this issue.

I, THEREFORE, MOVE that the Board:

Instruct the Director of DHS to develop a health plan benefits package for the IHSS workers through expansion of the Community Health Plan;
Instruct the CAO and DHS to submit to the Board by May 1, 2001 an action plan reflecting the steps leading to implementation of the CHP/IHSS Health Plan, and to assign appropriate staff to manage this action plan;
Instruct the CAO and Director of DHS to prepare a budget analysis of all start-up costs associated with preparation of the IHSS expansion of the CHP, and to include this analysis in the May 1 report;
Notify the PASC of this action, and inform the PASC that Board support for this program is contingent on the principle that implementation must be cost

neutral to the County, including the decision on hours-worked eligibility criteria;

Authorize the Director of DHS to develop an application to the State for a material modification of the CHP Knox Keene Plan to serve the IHSS workers under a rate structure that fully covers the projected costs of the program;
Instruct DHS to seek the assistance of L.A. Care and other organizations in efforts to improve the overall quality of the Community Health Plan; and
Instruct the CAO and Director of DHS to submit monthly progress reports on

the CHP/IHSS Health Plan, beginning with the May 1 report.