Why Medi-Cal Makes Doctors Sick

Money, paperwork and stigma

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?

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