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Trepidation High as County Enters Managed Care Era

Health: Critics worry that poor will be overwhelmed by complicated system. But others see hope for better service.


Sparking both fear and hope, Los Angeles County this week launches the nation's largest and most complex effort to enroll poor people into managed health care programs.

The hope is to cure a sick system beset by climbing costs and a bewildering bureaucracy and to broaden health care options for people long forced to take whatever they can get.

The fear, harbored by many doctors, consumer advocates and Medi-Cal patients, is of a rushed social experiment destined to cause mass confusion and medical disaster.

Critics got some support--and a reprieve--last week with the announcement by federal regulators that a feature of the massive Los Angeles program must be placed on hold because the regulators are "gravely concerned" over start-up problems in the assignment of patients to doctors. But that is surely a temporary measure, touching only on logistic questions and affecting only those patients who do not sign up voluntarily.

The larger philosophical debate--over whether California's approach to managed care is best for an often-transient, sometimes disenfranchised population--remains unsettled. Some say it will be settled, for better or ill, here in L.A. County, by far the biggest testing ground of an approach planned in 11 other counties.

"This [program] is conceptually flawed," argues Dr. Brian Johnston, president of the L.A. County Medical Assn. "We think this is not a good way to take care of health care. The underlying agenda is to limit costs, to control costs, by withholding services" to people ill-equipped to fight back.

Managed-care advocates counter that many physicians spurn the traditional Medi-Cal program as an unprofitable hassle, forcing patients to scout the landscape for providers or seek costly care in emergency rooms. Under managed care, a patient must first choose or be assigned to a doctor or clinic that will handle all the patient's health care and referrals; under more customary coverage, eligible people could go to any doctor or clinic accepting Medi-Cal.

"In managed care, you don't have to go walking through the Yellow Pages," said Joseph Kelly, who is heading the state's managed care effort. "It will increase and assure access."

A Choice of Two Programs

Critics are not of one mind on how to fix the old Medi-Cal system. But many agree that it is broken, and that managed care is coming, like it or not.

Other doctors and health experts are more optimistic, seeing this unprecedented transition as an opportunity to give poor patients the kind of stability, early attention and oversight they have never had before.

"We think it offers a sense of standardization, coordination and direction that fee-for-service Medi-Cal has not provided," said Dr. James Drinkard, medical director of Adventist Health Southern California Medical Assn. in East Los Angeles, which has served Medi-Cal patients for more than a decade. "I'm sure we won't know until we try."

Under the county's new "two-plan model," patients will choose between L.A. Care--actually a partnership of one public and six private plans--and Foundation Health, a private HMO, with two subcontracting plans. The managed care program involves paying the plans fixed monthly rates per patient as opposed to fees for each service, as in the traditional Medi-Cal program. The state's goal is to attract more providers with the guaranteed rates, while containing costs.

Beneficiaries may opt to stay in the traditional Medi-Cal program until both L.A. Care and Foundation are in full gear. After that, managed care will be the rule for most Medi-Cal recipients on welfare (not including many disabled and chronically ill beneficiaries).

California's most daunting challenge is in this county, which has a medley of cultures and languages, a public health system just yanked from the brink of collapse by a massive federal bailout, and a huge roster of a million eligible patients.

The county's venture, with contracts worth up to $10 billion over nearly six years, will have 10 times as many patients as the largest comparable endeavor in Northern California. Success would bring national acclaim. But failure, or even a shaky start that jolts the still-recovering public health sector, could create financial and medical chaos.

"A failure in the state's Medi-Cal program in Los Angeles, particularly one that causes collateral damage to the rest of the health care system, will cause sickness, suffering and death," the county medical association warned in February.

With L.A. Care set to open for business Tuesday, the local medical association and a cluster of consumer groups have desperately tried to slow, even stop, the switch to managed care.

They point to rocky start-ups in other counties. When Alameda County, for example, began its program last year, as many as 8 in 10 patients did not choose a plan and had to be placed in one, perhaps reflecting poor understanding of the program. The rate of such automatic assignments--also known as defaults--is now far lower.

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