The Medi-Cal Mess

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

California’s health program for the poor and disabled, Medi-Cal, has presented state lawmakers with quite a perplexing paradox. More and more people fall under the protection of Medi-Cal and need a doctor but fewer and fewer doctors are accepting the low fees associated with the program. While a simple solution may appear to be increasing the size of the Medi-Cal budget, Medi-Cal is already stretching the state budget and squeezing other programs. Thus, dealing with the Medi-Cal mess has become a real problem for state lawmakers and the governor.

As former Gov. Schwarzenegger economic advisor David Crane pointed out in a Sacramento Bee op-ed, “Medi-Cal’s share of spending has grown 35 percent since Brown took office and now consumes one-sixth of the budget.”

Yet, while the Medi-Cal costs surged upward with new patients coming into the system, especially because of the Affordable Care Act, fees were cut for health care providers during the recent recession and have not been restored. Many providers have decided not to accept Medi-Cal patients because of the low reimbursement rate.

So, more patients seek doctors and other health care providers while fewer health care providers are available to see them. And raising the cost of the program jeopardizes the cautious fiscal management of the Brown Administration that is concerned about what happens when there is another economic downturn.

Recently, Brown’s Director of Finance, Michael Cohen, told the press that the administration was willing to discuss boosting Medi-Cal reimbursement rates if that would guarantee greater access to doctors. How that guarantee is made to work is not certain.

There is no question that the health care providers should be more fairly compensated for their services and that all patients should be able to see a doctor. Given the increase in state revenues it is anticipated that some relief to the Medi-Cal program is in the offing. Yet, Brown is right to be concerned about an expanding budget.

While there seems no simple solution, not just the health care providers and the budget dollars should be considered. Another focus should be on the users of the system, their participation in the program and the opportunity for them to rise up and get free of the need for Medi-Cal assistance.

That California has nearly a third of its residents in need of Medi-Cal to provide health care is a sad commentary on the opportunity for the people to improve their circumstances. Obstacles should be removed so that the private sector can increase well-paying jobs. Then many of the people and their families using Medi-Cal can move away from the state sponsored health care and get company or individual health insurance.

Reducing obstacles to good job creation would go a long way toward relieving the burden on the Medi-Cal program.

In addition, Medi-Cal’s value must be brought home to patients. Health care providers have told me that they sometimes have to double and triple book Medi-Cal patients because they don’t appear for their appointments. The reason often suggested is that many patients are not required to pay anything for the appointment and thus put little value on the service. A nominal co-pay by all patients would add value to the service and change the character of the program.

Californians should receive health care due them and health care providers should be justly compensated for their work. However, there appears to be no Alexander’s sword to cut through the Gordian knot that is Medi-Cal so the fix must be a more holistic approach.

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