Heritage on Health: A Series of Milken Institute Forums
Federal Health Reform: Can It Achieve Its Goals?
Susan Kennedy and Richard Merkin
Introduction by former Gov. Gray Davis
March 17, 2011
4:30pm - 6:00pm
Santa Monica


Susan Kennedy
Susan Kennedy, shown with former California Gov. Gray Davis, is at the forefront of implementing health-care reform in the state as a board member of what could be the country's largest health exchange.
Richard Merkin
Richard Merkin, founder of Heritage Provider Network, offers his insight into how health-care reform could play out in California.
When it comes to implementing federal health-care reforms, the devil is in the details. While Congress laid out the broad strokes of health reform, it's the states that must turn those policies into practice.

At the first in a series of Milken Institute Forums on health care, two Californians with vast knowledge of the state's health-care system tackled the fine points and challenges of moving the process forward. Susan Kennedy, former Gov. Arnold Schwarzenegger's chief of staff and his appointee to the state's Health Benefit Exchange Board, and Richard Merkin, CEO of the Heritage Provider Network, had a high-level discussion of the pitfalls and promises of health reform.

At the federal level, the issues are many. The legislation will likely continue to evolve, given the makeup of Congress and the president's apparent willingness to negotiate around the edges. It puts huge unfunded mandates on the states at a time those governments can ill afford them, so pushback and demands for relief are likely.

California and other states face big challenges in implementing the provisions. With more people insured or eligible for Medi-Cal, providers' rates could skyrocket as they are inundated with new patients. Explaining the reforms to the consumer will be key, as is managing the political expectations of those on both sides of the issue.

Kennedy is in the thick of it as a board member of what could be the country's largest health exchange - the mechanism that will allow consumers in each state to comparison-shop for coverage. The health exchange board must clarify whether the goal is expanding coverage or bringing down costs, then design an efficient enrollment portal that takes political realities into account.

Kennedy is a veteran of two major health-care reform efforts. As deputy chief of staff, she helped lead Gov. Gray Davis' 1999 campaign for comprehensive HMO reform in the state and Schwarzenegger's 2007 initiative, which contained many of the same elements as the federal health reform program.

Merkin, who earned his M.D. at the University of Miami, is a pioneer in the development of medical networks. The founder of Heritage Provider Networks, he has spent the past 30 years implementing a successful business model to address the needs and challenges of affordable managed care.