A golden opportunity to narrow health disparities

In its new Medi-Cal contracts, California should prod insurers to focus on racial gaps in healthcare.

The COVID-19 pandemic brought into sharp relief one of the maladies of the U.S. healthcare system: White patients routinely fare better than nonwhite ones. The industry calls this a disparity in outcomes, and policymakers have been working for years to narrow the gap — only to have the pandemic highlight just how wide it continues to be.

Black, Latino and Asian Americans who contracted the coronavirus were hospitalized at far higher rates than white Americans, and they died at significantly higher rates too, a study of patient records by the Kaiser Family Foundation found. This translated into a reduction in average life expectancies of more than two years for Black Americans and more than three years for Latinos — multiple times worse than for whites, according to estimates published by the National Academy of Sciences in February. In one fell swoop, the disease erased more than a decade of progress made in narrowing the racial gap in life expectancies for Black Americans, while reducing the mortality advantage enjoyed by Latinos by more than 70%.

California now has a rare opportunity to force health insurers to do more to improve the care that low-income people receive through Medi-Cal, the state’s version of Medicaid. More than a third of the state’s residents are covered by Medi-Cal, and more than 2 of every 3 enrollees are people of color. Put another way, more than 40% of Black and Latino Californians and more than 20% of Asian Americans in the state are served by Medi-Cal; improving their outcomes would go a long way toward narrowing the racial gap in healthcare.

The vast majority of Medi-Cal enrollees are covered by managed care systems (think HMOs) operated by private insurers. This year, the state Department of Health Care Services will start negotiating a new set of contracts with those insurers, the first time it has ever done so on a statewide basis. It can use those contracts to focus attention on the disparity in outcomes and drive insurers, doctors, hospitals and other healthcare providers to confront it.

The Medi-Cal contracts determine how much insurers will be paid annually per enrollee, while also specifying what each of them must offer — for example, mandating that provider networks be large and broad enough to ensure that enrollees can get the treatments they need when they need them, at least in theory. As The Times reported last year, however, the standards aren’t always enforced; wait times for specialists can be egregiously long in the L.A. County health system.

That’s why it’s crucial for the new state contracts to pay attention to outcomes — how patients actually fare — not just to the services offered. And beyond that, the state needs to push insurers to identify and address the forces causing the disparity in outcomes.

That starts by collecting the data needed to track the demographic differences in who gets treatment, when they get it and how it turns out. Like Medicaid programs around the country, Medi-Cal collects a lot of information about the quality of care delivered, and it promotes such things as improved chronic disease management and reduced infections in hospitals. But an extra step is needed: diving deeper into the data to find significant gaps between white and nonwhite patients, then exploring what’s causing them.

For example, better data collection might show that a high percentage of the female patients over age 50 have access to mammograms, which is a good thing. But further examination might also reveal a large gap between Black and white enrollees’ screenings. Insurers would then have to determine what caused the difference and how to address it.

Granted, there’s only so much an insurer can do to improve its customers’ health. Factors well beyond the reach of the healthcare system have an enormous influence, especially for the extremely low-income people served by Medi-Cal. Access to healthy food, good housing and reliable transportation, not to mention clean air and water, may all be problematic. Employment can be a key factor too; during the pandemic, many MediCal enrollees held or had family members who held essential jobs that could not be performed remotely, which is why they were more frequently exposed to the coronavirus.

Yet given the right incentives, insurers can expand the scope and reach of their services to help mitigate some of these factors. For example, over the past year the industry has come up with ways to perform an increasing array of healthcare services remotely. Why not push insurers to help enrollees sign up for subsidized broadband services? Or why not demand more collaboration with housing and nutrition programs?

If the state needs a road map for how to use contracts with insurers to attack disparities in outcomes, it should look to Covered California, the state’s Obamacare insurance exchange. All 11 insurers selling coverage through the exchange are required to identify disparities in care related to four widespread and serious conditions — diabetes, high blood pressure, asthma and depression — and then come up with ways to narrow the gaps. Thus far, those efforts have included holding outreach events and bringing mobile care units to communities with higher levels of risk, rather than waiting for those enrollees to reach out for help.

When Covered California issued a report on its quality initiatives in December 2019, it included one important caution. Across insurance plans, the report said, “racial and ethnic disparities are generally smaller than the differences in quality.” In other words, there’s a disparity between insurers too, and the state can’t lose sight of that as it tries to close the racial healthcare gap.

The state has a unique opportunity now to give insurers a financial incentive to narrow the disparity in outcomes. That means setting clear goals in the contracts for improving outcomes in specific areas, then holding insurers accountable for doing so. The state and federal governments funnel an enormous amount of money through insurers to pay for Medi-Cal patients’ care. It’s time to apply that leverage to the disparities that COVID-19 made painfully clear.