America’s healthcare system is almost unanimously viewed as being unaffordable, dysfunctional, and severely in need of transformation. APG President and CEO Don Crane talks with leading healthcare executives, physicians, and other visionaries to explore solutions to lower costs and improving quality of care by accelerating the movement toward value-based care models and away from fee-for-service. Want to be inspired by our nation’s foremost thought leaders in healthcare? Then this show is for you. Here’s your host, Don Crane.
[00:00:35.640] Don Crane:
I sat down the other day to speak with Dr. Elaine Batchlor, the CEO of Martin Luther (King Community Health Care) (in) Los Angeles, what is now an integrated health system, complete with a hospital, medical group, and associated services located in South Central Los Angeles. What drew me to this conversation with Dr. Batchlor was her frank and persuasive view that coverage expansion, something I think we all support, via Medi-Cal, at least in her community, constituted the precise kind of structural racism that the Biden and Newsom administrations, and many others around the country, have pledged to address and eliminate. How could that be? Well, take a listen and we’ll find out.
Dr. Bachelor, thank you so much for joining me today. How are you?
[00:01:26.840] Dr. Elaine Batchlor:
I’m good. Thank you for having me. It’s my pleasure.
[00:01:30.600] Don Crane:
Very good. Well, give me a second here just to quickly run through your bio, the high points of it. Most of this audience knows who you are, I think. But at the risk of repeating what they might already know, let me just remind people that you’re the CEO of MLK Community Health Care, which is a health system in the inner city of Los Angeles, South Central Los Angeles, that includes a state-of-the-art private safety net hospital, the MLK Community Medical Group as a community and population health programs and a fundraising foundation. So, we’ll talk more about this in a minute. Quite a new picture from what it replaced. And so, I want to hear about that. You were the CMO at LA Care Health Plan for quite a time. That’s the nation’s largest public health plan providing care for safety net population. You’re very active on quite a large number of organizational boards. You’ve got a BA from Harvard, Masters from Public Health from University of California-Los Angeles, and a Doctor of Medicine from Case Western Reserve University. So, all in all, we’re really fortunate and privileged to have you with us today.
So, let me start. I alluded here to this history of MLK, which is such a story and really kind of an interesting history…difficult, but history. Why don’t you tell us a little bit about the predecessor organization, what you’ve now replaced.
[00:02:58.580] Dr. Elaine Batchlor:
Sure. So, the history really goes back to the development of South Los Angeles as a minority community and that’s related to the history of housing covenants, of redlining, and of discriminatory transportation policies. So, over time, South Los Angeles became a largely minority, at the time, African American community because Blacks were actually not able to live in most of Los Angeles County. And as a largely minority community, it eventually became very low income and lacking in almost all of the social determinants of health. So, lacking good schools, transportation, good employment, housing, et cetera.
And then in 1965, the area became known for the Watts riots, which was an expression of anger and resentment on the part of the people who lived in South LA because of the neglect and lack of infrastructure in that community. There was actually a study that was commissioned by the Governor of California, Pat Brown, who looked at the root causes of the Watts riots and not surprisingly, learned about all of the social determinants that I just mentioned, but also learned about the almost complete lack of healthcare in the community.
One of the few recommendations in the report that was actually carried out was development of a hospital for South Los Angeles. It was known as Martin Luther King Jr. Medical Center. It was a county-operated hospital, and unfortunately, over time, there were significant problems with patient safety and quality at the hospital and it eventually closed in 2007. And that left the people living in the community again with a huge shortage of healthcare. And that’s where the group of people who planned and developed MLK Community Healthcare came into the picture. The county partnered with the University of California to create a plan to develop a new hospital in South LA on the same campus that would be operated as a private safety net hospital. And that’s when I got involved in it. They recruited seven people to form the board of directors of this startup hospital and I joined that effort in 2010. And then I joined as the CEO of the new hospital in 2012.
[00:05:59.710] Don Crane:
Very, very good. Well, spend a second, tell us about the medical group…how is that connected into the system. Is it owned by the hospital? Is it autonomous?
[00:06:08.360] Dr. Elaine Batchlor:
So, that’s a great question. One of the things that we knew as a group of leaders and as a board that came together to open this new hospital right from the beginning was that we needed more than a hospital to improve the health of the people of South LA. We knew there was a very significant shortage of doctors in this community. Now we know that we’re missing about 1,200 physicians in South LA and you can’t provide quality medical care without good doctors. So, we knew that we needed a partner on the outpatient side that could provide community-based care and make sure that our hospital patients were getting the care that they needed outside of the hospital and to make sure that the prevention and the disease management was there prior to people needing to go to the hospital. We talked to a number of medical group leaders, leaders of medical groups that were not operating in South LA and because of the economic situation in South LA and the payer mix, none of the existing medical groups were really interested in expanding or starting operation in South LA. So, at that point, we knew that we would need to do this ourselves. And after we got the hospital open, we then created a physician corporation and a medical group that we have since converted to a medical foundation. And we are investing in the growth of this multi-specialty medical group. We are still challenged by the payer mix. It is still not financially feasible to sustain a multi-specialty medical group with the payer mix that we have in this community, which is 80% Medicaid and uninsured. So, we really need policy change to bring quality healthcare to this community.
[00:08:15.680] Don Crane:
What’s the other 20% in the mix, if I may ask?
[00:08:20.530] Dr. Elaine Batchlor:
[00:08:21.700] Don Crane:
[00:08:22.990] Dr. Elaine Batchlor:
I think our commercial percentage is about 4%.
[00:08:26.380] Don Crane:
Ok. And traditional Medicare or Medicare Advantage?
[00:08:30.140] Dr. Elaine Batchlor:
It’s a combination of both Medicare fee-for-service and Medicare Advantage.
[00:08:36.860] Don Crane:
But 80% Medi-Cal or uninsured. That’s quite something. Let me ask you. So, this is a wholesale redevelopment of this campus from the old MLK to this new foundation it sounds like, you know, really, it’s while it has, I would say an underfunded payer mix, it seems to have the attributes of really some of the best kinds of systems…central hospital at the core, ambulatory medical group, perhaps, is in sort of an orbit around it. I assume there’s other clinical activities and the like. And so, it has many of the kind of features that you would want in an integrated healthcare system. Is that a reasonable observation on my part?
[00:09:25.480] Dr. Elaine Batchlor:
Yes, it does. And it also has some of the more forward-leaning aspects of integrated care. So, for example, there is a recuperative care facility on the campus that takes care of patients who are homeless, who are transitioning out of the hospital. There is a psychiatric stabilization unit on the campus. So, there are some new infrastructures here in the community. Some of it is run by the county, primarily because of the economic challenges. And we’re trying to build out a complimentary system that can care for people in the community and decrease the need for hospital care. I think, ultimately, our goal is to have a healthier community that doesn’t need to be hospitalized for things that can be successfully managed in an outpatient practice.
[00:10:25.810] Don Crane:
So, you’re on to my next question. How has the sort of the new MLK with all of the infrastructure to which you refer, despite perhaps underfunding, being principally Medi-Cal funded…how is it doing in terms of quality and health disparities for the community? A vast improvement, small improvement, or still swimming upstream? And how would you characterize it?
[00:10:50.000] Dr. Elaine Batchlor:
Well, I would say that as a hospital, we’re doing great. We built a state-of-the-art facility. We put in state-of-the-art information technology. We are a HIMMS Level Seven hospital. That’s the highest-level use of information technology in a hospital that only approximately 6.5% of hospitals have achieved. We are in the top decile for patient satisfaction. So, I think that we’re doing great with our quality in the hospital, and hospitals get support…supplemental support beyond what Medicaid pays, so that they can be financially sustainable. But the piece of this that we’re really concerned about is what happens in the community before people get to the hospital. So, waiting until people are sick enough to need hospital care is not a good way to manage healthcare. We really need to go upstream of the hospital to ensure that people in the community are getting prevention and disease management. And that’s where we have a huge challenge with the structure of our payer system. I say that we are paid adequately as a hospital to amputate diabetic limbs, and diabetic amputations and wounds are the most frequent procedures that we do at this hospital, but we’re not adequately paid as a health system to prevent those amputations. The support for preventive care and disease management outside of the hospital is completely inadequate and is the primary reason our community is lacking physicians.
[00:12:50.280] Don Crane:
So, let me…I’ll return to that in a second because I think that’s core, certainly, to a thesis of mine that I think that you and I share, frankly, about the kind of connection between funding levels and actually the outcomes that we all seek. But let me ask you about your COVID experience, because that has been a pressure cooker for healthcare all across the country, and where we have communities of color where they’re experiencing 200 and 300% higher rates of hospitalizations and I suppose mortality as well, you can tell something is amiss. So, talk to us about your COVID experience…how does the hospital handle it? How does the medical group handle it? How’s it going? What are the challenges?
[00:13:37.170] Dr. Elaine Batchlor:
So, COVID has definitely been a challenge. We are a small community hospital, but we have cared for more COVID patients than hospital systems that are three to four times our size. And I came to that realization around Christmas time when the federal HHS began to publish COVID census at every hospital across the country. So, they published the number of COVID patients and the number of licensed beds in every hospital across the country. And they updated that data every week. And much to my surprise, as I looked at the data, I discovered that my small community hospital was taking care of more COVID patients than some of the large tertiary medical centers in Los Angeles. And in fact, we had more COVID patients per licensed bed than almost any hospital within a 15- to 20-mile radius. And I think it’s a reflection of a couple of different things. I think one of the things that reflected was the lack of hospital beds in our community. Our community has the lowest number of hospital beds per 100,000 residents of any area of Los Angeles County. And I think that, again, is related to the payer mix and the fact that the people who live in this community are low income, and Medicaid and uninsured are the primary payers.
I also think it’s related to the prevalence of poorly treated chronic illnesses in this community. That is a reflection of the lack of access to quality prevention and disease management in the community. It’s also a reflection of the fact that a lot of our essential workers live in this community and, that for many of the people who live in this community, housing is not easily affordable, and they also live in crowded housing. And we see whole families getting sick when one member of the family gets COVID. So, for a variety of reasons, that kind of combine all of the different social determinants of health, we became the epicenter of the Los Angeles epicenter of COVID, particularly during the winter surge, and we are still taking care of a disproportionate number of COVID patients here.
[00:16:03.150] Don Crane:
So, hearing you, I’m quite sure indeed, that there’s a shortage of hospital beds, but it sounds like the focus on much of your comments here really relates to the ambulatory or lack thereof care system around the hospital, but also other social factors, nutritional and otherwise. Am I right in that observation?
[00:16:22.480] Dr. Elaine Batchlor:
Yes. It’s a community that’s really lacking all of the infrastructure that we talk about when we talk about social determinants of health. So, we’ve got a lack of access to healthy food, a lack of access to safe places to exercise and recreate, we have a lack of transportation, and a lack of good education. So, all of those things contribute and importantly, a lack of access to quality healthcare. All of those things contribute to the disparities in health that we see in this community. The rate of diabetes here is three times higher than in other parts of the county. Our mortality rate from diabetes is 70% higher than the national rate of diabetes mortality. All of this is related to those social determinants and the lack of access to quality healthcare.
[00:17:54.030] Don Crane:
So, let’s talk solutions. And we’ve talked here now about medical, but we’ve talked also about social. So, it sounds like there’s a lot of work to be done. Let’s limit the conversation for a second just to the medical side. So, with this mix that you described being predominantly Medicaid, tell us about that level of reimbursement. Why is it…where is it expressed as a percentage of something, let’s say Medicare…give us a feel for how low it really is.
[00:18:23.900] Dr. Elaine Batchlor:
Sure. So, at the root of the problem is a structural feature of Medicaid or of Medi-Cal in California, because Medicaid is really 50 different programs. And in California, Medicaid is one of the lowest paying programs in the country. I think our provider payment rates are the third lowest in the country, and that means that compared to even Medicare, providers are paid pennies on the dollar for taking care of Medicaid patients. So, just to give you an example, an average emergency department visit might generate $2,000 for a commercial visit, $650 from Medicare, and $150 from Medicaid. So, this is structural. And this is what I would call structural racism. So, 99% of our patients are low income, black and brown people who live in this community, which is a community of concentrated poverty. And, we are paying providers significantly less to work in this community and to care for people who live in this community. And as a result, there’s a shortage, a very severe shortage, of every type of healthcare in this community.
[00:19:42.870] Don Crane:
So, connecting the dots, it should be pretty clear…clear to you and me…it should be clear to other policymakers, legislators, and the like…that this low reimbursement produces inadequate numbers of physicians and so forth, which creates inadequate access, which produces greater mortality and morbidity. So, those dots, I think I’m connecting it right…
[00:20:10.250] Dr. Elaine Batchlor:
[00:20:11.220] Don Crane:
…come together. And I think what I’m hearing you say is, look, if we know these dots connect and are fairly closely juxtaposed with one another, how can we not call this structural? How can it not be racism where it’s in a community that is predominantly people of color? So, you add it all up. This is what’s known as structural racism. Have I got that right?
[00:20:33.880] Dr. Elaine Batchlor:
You’ve got it exactly right. I think a lot of times we use the phrase structural racism or systemic racism in an abstract way. And this is a concrete example of what that means. And if we care about social justice and about health equity, we need to correct this. We should not allow this to persist. This is wrong, and we need to call it what it is and then we need to fix it.
[00:21:03.520] Don Crane:
So, Elaine, I think as we speak, these issues are front and center in the Reconciliation Bill, the Family Act or 3.5 trillion-dollar bill that’s being considered by Congress now, as there is an effort to expand Medicaid in order to get to universal coverage. So, as I look at that picture, help me out here. Universal coverage, great thing. But if it’s achieved by a program, and I recognize it differs from state to state, but if it is achieved through a program that is systematically paying less than a community needs in order to deliver care, yeah, it’s universal coverage, but are we fooling ourselves? How can that be considered a good thing? And how could that be supported? I mean, do you agree?
[00:21:55.060] Dr. Elaine Batchlor:
I agree that universal coverage is definitely not the solution by itself. We need to get to universal coverage, but we also need to get to parity. So, if we simply add more people to Medicaid and we don’t correct the payment disparity, we’re not actually giving those people adequate access to quality medical care. We need to do both, and we need to understand that the two go together. So, I’m a strong believer that we need to achieve universal coverage, but I also think we need to achieve parity, at least between Medicaid and Medicare. We need to stop this separate and unequal system of funding and access to healthcare for our low-income, underserved communities.
[00:22:47.370] Don Crane:
I think that’s a critically important point. I am not hearing that loud enough and often enough, frankly, in the conversation about it achieving universal coverage. I would hope that we can somehow or other get that the twin…those two points across with greater success going forward.
[00:23:05.690] Dr. Elaine Batchlor:
I agree. I don’t think it’s an either-or, I think it needs to be a ‘both.’
[00:23:10.280] Don Crane:
Yeah, one without the other just doesn’t work. So, let’s talk social determinants…it’s clearly kind of the rage or whatever, if I may say, is being observed thankfully and I shouldn’t be cynical, as I said, because I think there is the growing awareness that the social…unmet social needs are a huge driver of cost and poor outcomes and so forth. So, as you look at your community, help the audience understand what we’re talking about. What are the principal areas of social needs that are unmet, that maybe even in some sort of hierarchy you would want to try and address if you couldn’t boil the oil, what would you do?
There’s nutrition, there’s transportation…give me an education on what you would do in terms of social determinants around your community.
[00:24:00.440] Dr. Elaine Batchlor:
Well, I think that in healthcare, the social determinants that we talk about the most are things like access to healthy food, transportation, and housing instability. And we talk about the things that health systems can do to address some of those social determinants. And I believe that it’s important to address them. But what I don’t agree is that we should address social determinants at the expense of providing access to quality healthcare. Again, I don’t think it’s an either-or I think it’s a ‘both’, and our health system is actively involved in addressing food insecurity, for example, screening for it. And we have a program called Recipes for Health where our physicians are able to write a food prescription for patients who have food insecurity and food-related illnesses like diabetes or obesity or heart disease. And we provide fresh produce for them and their family on a weekly basis. We also offer transportation.
[00:25:16.210] Don Crane:
Where is the funding come for that food? So, your physician writes the prescription for the nutrition, and then you deliver the food. Where’s the funding for that come from?
[00:25:24.700] Dr. Elaine Batchlor:
So, we are paying for the food either out of our community benefits, or we are raising money philanthropically for it. But again, that’s not a sustainable funding model for scaling and sustaining a program long term. But we have started it, and we found that it’s very effective in helping people change their eating habits and also keeping people engaged with their healthcare. We’re also providing transportation. We have relationships with agencies that help stabilize housing. We have a partnership with an organization that is building additional shelter for homeless people. So, we believe strongly in addressing social determinants of health, but we don’t think resources should be taken away from a community like ours that already has inadequate access to healthcare and diverted into social determinants. We think we need to provide both.
[00:26:32.650] Don Crane:
You hear a fair amount of conversation about it being sort of a budget-neutral kind of a program. The notion is that we’ll pay less for medical if we pay more for social, but it’s all within a finite budget. And that’s what you’re saying, that doesn’t work. We need it to be in addition not in lieu…
[00:26:51.340] Dr. Elaine Batchlor:
Well, if you already have a budget that’s adequate, you might be able to make those kinds of trade-offs. But we’re working from a budget that’s already inadequate. So, diverting resources from a budget that’s already inadequate to support healthcare to things that are not healthcare doesn’t really add up.
[00:27:10.640] Don Crane:
Does the payment model used with respect to the physician group make a difference? So, I haven’t heard you tell me whether you’re…the doctors are personally paid fee-for-service or whether it’s capitated and it’s Medi-Cal managed care. It may very well be capitated. But have you had experience with the payment model and has that made any difference in terms of addressing disparities?
[00:27:35.350] Dr. Elaine Batchlor:
I think that if the level of payment is adequate, I think that models that allow providers to allocate resources where they think they’re needed and where they think they will be effective is a better payment model than a simple fee-for-service model. But the caveat is that it’s got to be adequately funded to begin with. And I think the problem that we have with Medicaid managed care is that the level of payment is not adequate. And so, some of the problem that we see in the current system is a lack of resources being allocated to healthcare and incentives that are not aligned to provide access to healthcare.
[00:28:25.540] Don Crane:
So, let me wrap up Elaine and ask you, I guess, kind of a final question. I want to be careful to not sound negative as I think about funding levels in our state and federal government. But, in spite of the low funding, what do you predict for the future of MLK? Five years out, ten years out. Do you see it succeeding, growing generally, and then specifically, the health status of the population? Are we going to achieve the goals of better-quality health and health status for the community or are we not? What is your prediction?
[00:29:05.000] Dr. Elaine Batchlor:
Well, I’m an optimist, so I believe that we have an amazing opportunity to make a difference here to improve the health of this community and to do the right thing. And I believe that the COVID pandemic has really shown a light on the underlying disparities in our healthcare system that have been there for a long time but really haven’t gotten a lot of attention. And I think it’s an opportunity for us to advocate for people living in communities like ours, to get the resources that we need to improve their health.
We now know that we are all connected and that we cannot wall ourselves off from our babysitters and the people who prepare our meals and the people who clean up after us, that we all need access to good healthcare in order to keep everyone healthy and to keep our economy strong. And so, I think we have an opportunity to do the right thing and to bring the resources that are needed to communities like this. And what we’re demonstrating is that if you do that and if you make a commitment to providing quality care, you can improve the lives of the people that you serve. So, I will continue to work towards that. And I am optimistic that we can get there as a society.
[00:30:31.060] Don Crane:
Well, very, very good. I’m glad to hear that. So, you’ve got a partner in APG, Elaine. Keep up the great work. Look forward to following your success in the future. And thank you very much for talking with us today.
[00:30:44.820] Dr. Elaine Batchlor:
Thank you, Don. It was great to talk to you.
[00:30:46.890] Don Crane:
As you may have observed, our Annual Conference this year will now be held in person, December 9 through December 11, at the Marriott Marquis San Diego Marina. Please save the date and be sure to register. It will be, to say the least, an extraordinarily welcome and refreshing chance to see each other in person once again. In the meantime, stay safe and be well.