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Project to Shift Medi-Cal Care to HMOs Stirs Hopes and Fears

August 01, 1985|LYNN O'SHAUGHNESSY | Times Staff Writer

An obscure state commission has embarked on an ambitious and controversial pilot program that will radically change the way health care is delivered to most of the 87,000 Medi-Cal recipients in Glendale, Eagle Rock and the San Fernando Valley areas.

Starting Jan. 1, most people receiving Medi-Cal benefits will have to enroll in one of a handful of health maintenance organizations, or HMOs, selected by the state. Most Medi-Cal recipients will no longer be able to visit their personal physicians, their neighborhood pharmacists or the hospitals of their choice.

State officials say they hope the Expanded Choice Program, which also will be conducted in San Diego, where there are 165,000 Medi-Cal recipients, will save California millions of dollars and instill some credibility in the massive Medi-Cal system, which taxpayers have criticized as wasteful.

Initially, the commission wants to trim the aggregate Medi-Cal costs in Glendale and the other program areas by 5% each.

$3.5 Billion for Health

During the past fiscal year, the state spent $3.5 billion to keep 2.6 million Medi-Cal recipients healthy.

John Silberman, chairman of the seven-man California Medical Assistance Commission, which is responsible for the project, predicts that it will become "a model for the nation." Gov. George Deukmejian has said that he would like the project to be copied statewide as soon as possible.

But many critics, although acknowledging that runaway health care costs need to be controlled, say the state is gambling with the health of poor people by trying to do too much, too soon with an unproven concept. They point to a health program conducted with similar goals in Monterey. That program recently was declared bankrupt.

Opponents suggest that the way the experiment is structured, HMOs will be inclined to skimp on patient care to protect profit margins and will be motivated to push costly patients out of the program by dumping them into nursing homes.

They also question what HMOs will do when they start receiving patients with rare illnesses that the typical physician has studied only in textbooks. Now, most of these patients, the majority of them children, are being treated by specialists at such facilities as Orthopaedic Hospital, Childrens Hospital of Los Angeles and UCLA Medical Center. The state has not said what will happen to these patients.

'Going to Punish Poor, Sick'

Meanwhile, the Valley's pharmacists association predicts the program will force some neighborhood druggists out of business, and some doctors predict that physicians with large Medi-Cal patient loads will leave the Valley.

One of the experimental program's harshest critics is state Sen. Herschel Rosenthal (D-Los Angeles), who represents part of the eastern San Fernando Valley and sits on the Senate Health and Human Services Committee, which deals with Medi-Cal issues.

"We're going to punish a lot of poor, sick people," Rosenthal predicted. "They are going to be hurt by the kind of care they are going to be provided."

HMO officials and the state dispute the charges.

Care at HMOs Praised

The accusation that HMOs skimp on service to fatten profits is "the oldest argument against HMOs. If that was true, they wouldn't be growing," said Dan Alan Boswell, president and chief executive officer of Serra Health Plan, which hopes to participate in the project.

HMO executives say participants probably will enjoy better health care than they do under the currentarrangement, in which Medi-Cal recipients choose their own doctor or hospital. Many doctors have stopped accepting Medi-Cal patients because of inadequate reimbursements. That, in turn, has forced some Medi-Cal beneficiaries to seek treatment at what HMO officials refer to as "Medi-Cal mills."

"I would argue that the quality of care under Expanded Choice will be an improvement over what is offered to Medi-Cal patients today," said Jeffery M. Folick, executive vice president of CareAmerica Health Plan, an HMO being organized by Health West, owner of several hospitals, including Northridge Hospital Medical Center.

Supporters of Expanded Choice say it is only fair for Medi-Cal patients to begin accepting partial responsibility for their care by enrolling in cost-effective HMOs, which the middle class has been enrolling in increasingly for years.

Emphasis on Preventive Care

The beauty of HMOs, supporters of Expanded Choice say, is their emphasis on preventive care, which keeps more people out of hospitals. The one-stop health care system of HMOs would also crack down on the tendency of some Medi-Cal recipients to shop for cures by hopping from doctor to doctor, undergoing incompatible treatments and accumulating drugs that either do not help, or may harm, the patients.

In early January, Medi-Cal recipients will get letters informing them that they have until March 31 to sign up with one of the participating HMOs. State officials anticipate that 35% of the beneficiaries will not choose a plan, so the state plans to assign them one.

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