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Why Medi-Cal Makes Doctors Sick 

Money, paperwork and stigma

Wednesday, May 17 1995
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Rosa, 18 years old and 13 weeks pregnant, applied for Medi-Cal but wasn't accepted into the program until 21 weeks later, precariously close to her due date. Not only did Medi-Cal's cumbersome paperwork present a challenge, but Rosa (not her real name) was treated contemptuously by Medi-Cal workers.

And most doctors are no more enthusiastic about Medi-Cal.
"Medi-Cal recipients were far more likely to miss appointments than other patients," says Berkeley acupuncturist Jay Sordean, who stopped seeing Medi-Cal patients in 1987 after treating them for four years. "And 10 to 15 percent of them failed to appear or didn't bring the necessary Medi-Cal identification."

"Medi-Cal insists a patient have an ongoing ulcer for me to prescribe medication," says one frustrated doctor. "But often the patients need the drugs to prevent the ulcer from reappearing." To medicate patients, the doctor often relies on pharmaceutical company handouts. Other doctors simply deceive the system. "Doctors frequently lie to Medi-Cal, concocting whatever diagnosis is necessary to secure the proper drugs," one physician says.

The 3-decade-old program was supposed to put the state's poor on equal footing with mainstream society, affording them access to private health care. Instead, it has alienated physicians and turned its 5.4 million beneficiaries into medical pariahs.

According to a University of California at San Francisco study published in the February Western Journal of Medicine, only 31 percent of 124 physicians surveyed statewide are willing to accept new Medi-Cal patients. In focus groups conducted by the authors of the article, doctors describe their strategies to avoid Medi-Cal recipients. Some outright refuse to see these patients. Others have medical residents provide care, transfer the patients to public hospitals or treat the patients in the emergency room -- but refuse to provide follow-up outpatient care.

As one focus group doctor says, "The best strategy -- no, I'm sorry, my strategy -- is I don't see them in my office."

The source of the medical discontent is money: An early '90s study by the state's Little Hoover Commission determined that California pays "a lower cost per Medi-Cal user than the next 12 largest states in the nation, and California's taxpayers pay a smaller share of their income to support the program when compared to the national average. And this despite the fact that California has a higher percentage of its population receiving Medicaid than the next 12 largest states."

Although Medi-Cal dropped $14 billion on services in 1993, the director of the California Department of Health Services, Molly Joel Coye, conceded that year that "these services are not provided in a system that makes sense."

"Thousands of Medi-Cal beneficiaries are hospitalized each year for serious health conditions that could have been prevented by primary care," Coye wrote. "Instead of being cared for in a doctor's office or clinic, our patients wind up waiting hours in emergency rooms for simple problems like a child's ear infection."

The Little Hoover Commission concurred with Coye's critique, noting that because Medi-Cal failed to provide crucial preventive care for the poor, it ended up spending much of its money on catastrophic care, and was also increasingly becoming "the payer of last resort for those who are made poor by illness, such as people in nursing homes or patients with AIDS."

Funding for Medi-Cal is split almost evenly between the federal government and the state, and the program serves three main groups: categorically needy people, who receive Medi-Cal because they qualify for a major public assistance program; medically needy (people aged, blind or disabled whose income is too high to qualify for public assistance); and medically indigent (generally individuals under 21, pregnant women and persons in long-term facilities for non-age-related reasons).

San Francisco psychologist Steven Korn accepted Medi-Cal patients for more than six years, but stopped billing the program in mid-1994 when it became too much of a hassle. Like many doctors, he complains of a dizzying trail of paperwork. And Medi-Cal was stingy. It would pay "something like $29.74 for a $100 session," he says.

In the Little Hoover Commission study, one midlevel Medi-Cal official alleged that reimbursement rates had "dropped so low in California that in many instances they are not covering the overhead of medical providers."

"I still see Medi-Cal patients," says Korn. "They make up approximately 20 percent of my practice. But it's pro bono work."

Berkeley gastroenterologist John Roark, who treats Medi-Cal patients, isn't surprised by physicians' resistance to Medi-Cal.

"Most physicians are Republicans, far right-wing. Their attitudes are often Neanderthal," Roark says. "They really aren't very bright about social issues, not overly sensitive to racial issues." He says doctors often don't want these Medi-Cal patients in their waiting rooms because they're prone to disruption because of drug and alcohol abuse.

The Western Journal of Medicine article finds that doctors also reject Medi-Cal patients because they believe these patients are "more likely to sue, aren't grateful for care, are less likely to follow the physician's advice, and have complicated psycho-social problems." It recommends that medical schools recruit more minorities because of its finding that minority physicians are more apt to accept Medi-Cal patients. Yet minority physicians whose patient base is made up largely of Medi-Cal recipients are made vulnerable by those low rates, placing some of their practices perilously close to collapse. Will freshly minted minority physicians merely bypass the Medi-Cal patients in the inner city for more lucrative territories?

In wealthy Pacific Heights, a random check of 12 medical practices revealed six that do not accept Medi-Cal patients, four that do and two that accept Medi-Cal patients only if referred by another doctor. Dr. Roark explains that some specialists accept Medi-Cal referrals to secure privately insured referrals from that same doctor later.

Not all doctors are selfish, says Rose Marie Meddaugh, policy development
coordinator for the California Medical Association.
"We never hear about those doctors who don't see Medi-Cal patients in their offices but treat them in a hospital, or those who see outpatients but don't even bill Medi-Cal because of the paperwork," says Meddaugh.

The Little Hoover Commission hypothesized that Medi-Cal's legendary red tape might be by design rather than by accident:

"[S]implifying eligibility forms and streamlining a process that is now time-consuming and cumbersome could increase greatly the number of Medi-Cal recipients and the immediate costs associated with their care," the commission wrote.

"After 49 hoops, doctors stop jumping," says Dr. Vishu Lingappa, a practicing physician who is on the UCSF med school faculty. Still, providers may complain about the Medi-Cal bureaucracy, but for most it's a matter of money. "Those who single out paperwork are not being forthcoming," Lingappa says. "The red tape in private insurance takes the cake."

Medi-Cal officials are trimming some of the red tape by shifting its beneficiaries into private health-care delivery systems such as health maintenance organizations (HMOs). The working theory is that these market-oriented "managed care" systems will be more efficient than the current one. Today, 600,000 patients are enrolled in Medi-Cal managed care arrangements, a number that is projected to reach 900,000 by July of this year. By 1996, an additional 2.3 million will be added when mandatory managed care takes effect in 12 counties. San Francisco County's managed care plan is scheduled for December 1995.

But not everyone thinks that Medi-Cal managed care is the answer to the problem. Dr. Roark worries that it will be "a disaster."

"When left to private, for-profit operators, there will be an increase in shysterism. It'll be like the S&L scandals, but people will die because of it," Dr. Roark notes, though he acknowledges that San Mateo County runs a successful Medi-Cal managed care program -- and that Sacramento doesn't.

"There's a mistaken belief in America that private enterprise is always better than public," says Roark. He points to the success of Medicare, the federally run heath insurance program for those 65 and older. Dr. Lingappa also salutes Medicare.

"The difference between Medicare and Medi-Cal in terms of health care, reimbursement and paperwork is night and day," says Lingappa. "Medicare doesn't reimburse doctors as much as private insurance, but they're generally happy with it."

Why is one government health initiative a success and the other a failure? The pro-Medicare doctors say it's because Medicare is administered as a health program that everyone qualifies for, and on average reimburses doctors about 65 percent of the market rate for their services. Meanwhile, Medi-Cal is run like welfare, requiring its recipients to submit to a "means test" to determine if they qualify, and it pays only about 35 percent of the market rate.

Since everyone grows old, Medicare maintains its political support from the voting masses and its clients avoid stigmatization. But since only some of us are poor, recipients of Medi-Cal are scorned and vilified.

"Doctors tend to refuse Medi-Cal because it's what their peers do," a physician muses. "If we all spent half a day each week -- or even two weeks -- treating the poor, then it would be accepted procedure."

Many can afford it: The American Medical Association pegs the mean salary of a gynecologist in the Pacific Coast region at $216,000 per year.

As one physician in the UCSF study remarks, "I don't take any new Medi-Cal patients, and my colleagues are all doing the same thing now ... and it's mostly for financial reasons. Our reimbursement goes down, our census goes up, and you find yourself working harder and not making ends meet the way you have."

"Treat Medi-Cal patients?" one Bay Area doctor asked recently. "That's charity."

And what, some might ask, is wrong with that?

About The Author

Eric Bagan

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