L.A. Care CEO Blends Hyperlocal and Systemic Strategies to Strengthen the Safety Net

John Baackes is the right leader at the right time and a staunch physician advocate.

"L.A. Care Health Plan started as an experiment."

So began John Baackes' exclusive interview with HealthLeaders, spanning milestones from the local plan's 25th anniversary to still-emerging initiatives designed to strengthen the safety net for all.

A board member of multiple organizations including AHIP, Baackes is nearing the eight-year mark as CEO of a plan that makes non-mandated expansion part of its business model and has become one of the few de facto public options operating in the U.S. as federal reform languishes.

Those accomplishments alone would make for an impressive 25 years. Instead, L.A. Care added two major announcements to its silver anniversary celebration on July 22nd, both related to Elevating the Safety Net—a multi-strategy initiative launched in 2018 to address L.A. County's physician safety net shortage.

The first milestone: L.A. Care has hit the $100 million mark of a $155 million funding commitment made in 2018. The second is the next round of scholarships tied to the initiative's primary objective: creating the next generation of L.A. County primary care physicians (PCPs), with an emphasis on opportunities for people of color and women.

The safety net needs a safety net

L.A. Care's Elevating the Safety Net includes four interconnected components that address multiple market dynamics.

• Building the physician pipeline. Eight need-based annual scholarships divided between two medical schools (David Geffen School of Medicine at UCLA and Charles R. Drew University of Medicine and Science), awarded based on the scholars' expressed desire to work in underserved communities.
  
  Baackes: "Of the 40 scholarships given out, all but two have been given to students of color and half of them are women." The first of these students graduated in May 2022.
   
• Supporting practice sites. Funding adds new, locally based PCPs, with recruitment and loan repayment incentives that help clinics compete with Kaiser Permanente and AMCs.
  
  Baackes: "We've been able to give these practices a $305,000 benefit that they wouldn't have had. Since we started in the fall 2018, 142 doctors are here practicing in L.A. County that were not here when the program started."
   
• Funding residencies. L.A. Care has funded 14 primary care residencies designed to keep people practicing in county.
  
  Baackes: "These are attached generally to teaching hospitals and again build a pipeline of people who will stay in L.A. County and serve the network."
   
• Caregiver training to support union-associated home care workers. Funding to train family caregivers of members of the Service Employees International Union (SEIU), one of L.A. Care's covered populations.

Baackes: "We were noticing that 90% of the time, the beneficiary selects a family member who may have absolutely zero training … One of the students [his mother's caregiver] said 'The program taught me the difference between my role as a son and my role as a caregiver and as a result, I'm better at both.'"

Pictured: John Baackes, CEO, L.A. Care Health Plan.

For Baackes, it's not just about how many serve the underserved. It's about who they are. Elevating the Safety Net is cultivating new generations of PCPs and caregivers who look and speak like their patients. Baackes has shepherded the initiative from inception to lengthening impact.

"I've just gotten the Board of Governors to expand the program for another five years," Baackes told HealthLeaders.

"The amount of money that we set aside the first time, which is 5% of our reserve for five years, created the fund of $155 million. We have enough money left in it to keep the program going for another five years. So we're not asking the Board to divert additional reserves to this program. It's established funding."

Baackes and his board are keeping long-term funding flowing for Elevating the Safety Net because they are acutely aware of a significant area where the money lags: reimbursement rates for PCPs.

Combating the two-tiered reimbursement system

Difficult, low-paying jobs have trouble attracting and retaining workers. Unfortunately, what is true of the retail and hospitality industries is also true of PCPs, particularly those with underserved populations. Surprisingly, reimbursement is even worse in the Golden State.

"California is in the bottom 10 states in terms of the amount of reimbursement," says Baackes, despite being the highest taxed state in the country.

The answer? A new Baackes-backed initiative.

"We've organized an effort here that I'm calling the Los Angeles County Safety Net Coalition. We're trying to bring together the hospitals, the doctors, and the clinics and come up with a proposal for Medi-Cal reimbursement reform where we would offer the legislature a package that we think would begin to resource Medicaid in the way it needs."

Noting that Medicare and commercial reimbursement rates essentially subsidize Medicaid while making it less attractive for providers to participate, Baackes adds: "It's not sustainable. You're really creating a two-tiered system."

"We have accepted every opportunity over our history to expand service delivery"

L.A. Care Health Plan was founded in 1997, the same year as Medicare Advantage and the Children's Health Insurance Program.

"When L.A. Care started, there was no infrastructure here," says Baackes. To serve members, the plan:

• first subcontracted to multiple commercial plans
   
• began to contract directly with hospitals and independent practice associations (IPAs) after in 2006
   
• expanded to cover seniors, people with disabilities, and ACA Medicaid expansion populations

Today, L.A. Care also covers Medicare beneficiaries who are dually eligible for Medicaid. 

"We were the only local initiative plan that opted to get into Covered California," says Baackes, who adds that L.A. Care also meets the ACA's public option definition.

In some ways, the plan reflects characteristics that are unique among states. California is the only state with a multi-model Medicaid program, including the local initiative approach that LA. Care chose. The plan covers 2.7 million members, more than some states. That number now includes Medicaid coverage for residents who are undocumented.

Says Baackes: "We have tried to add value, both to our providers and to our members, through a series of initiatives that go beyond what we're required to do under our contract as Medi-Cal managed care plans under the Department of Health Care Services."

Amplifying connection and reach

This value includes L.A. Care's Resource Centers, which offer health and wellness resources to members and the general public.

Baackes notes that "few other plans have these centers," which were vital during COVID-19 and are another example of the plan's commitment to expansion from an initial four to now 11, with another three planned by 2023 aided by $74 million in funding from BlueShield Promise, another Medi-Cal MCO.

The expansion of the centers—now co-branded with BlueShield of California Promise Health Plan to reflect their partnership—is to include larger centers with member-only services such as technology bars for virtual care appointments and services delivered by co-located social service agencies.

L.A. Care will now offer more services thanks to CalAIM, a five-year Medicaid demonstration that launched January 2022 with a focus on integrating clinical and non-clinical care.

"We're going to work very closely with the state. There are several layers to it and it will probably take two years before all of the programming is turned on, but we think it's beginning of a step in the right direction."

It is part of the forward progress that Baackes is making—to lead L.A. Care as a hyperlocal plan that delivers equal measures of systemic change.