Proposed County Medi-Cal Takeover Appears Doomed

Orange County’s proposed takeover of the state Medi-Cal program within the county, affecting 120,000 residents, appears doomed after a study concluded that the move would be “a very risky undertaking.”

The result of the two-year study disappointed advocates of the takeover, who had argued that county management would improve efficiency and save more than $30 million a year of the $252-million cost of the program. But critics had feared that lower costs could be achieved only by reducing service to the poor.

Under the proposal, the state would continue to provide the money for Medi-Cal but the county would administer it. But state officials, including Gov. George Deukmejian, are not likely to give assurances that the money will be enough to attract doctors and hospitals to the program, county officials said. Nor is the state likely to reimburse the county for its start-up expenses, they said.

They blamed in part the Gramm-Rudman federal deficit reduction law, which is expected to cut funds regularly passed from the federal government to local programs through state agencies.

“The county wants to make sure that we’re not left holding the bag,” Russ Barrios, aide to Board of Supervisors Chairman Ralph Clark, said Thursday.

On Tuesday, county supervisors are expected to approve Clark’s plan to seek assurances from Richard Silberman, chairman of the state Medical Assistance Commission, that the state would repay administrative costs. Clark’s proposed letter to Silberman also states that “the county must retain the option to discontinue” the Medi-Cal takeover “without sanctions.”

“The chances of getting the help we need from the state look very slim,” Barrios said Thursday.

“Gramm-Rudman is on everybody’s mind, for one thing, and even if it weren’t I doubt that the state would buy off on Orange County’s claim that it can run the program better, with more efficiency,” Barrios added.

Two years ago, Bob Love, then an aide to Supervisor Harriett Wieder, estimated that the county could save $20 million to $30 million a year over what the state now spends on Medi-Cal patients in the county, money that could be used for other health-care programs. Also two years ago, Love projected that the county could save another $10 million to $15 million of the money it now spends to treat undocumented residents.

But on Thursday Love said: “The world has changed in two years . . . The health-care field has changed, too. We wanted to study all of the ramifications before jumping ahead, and we did not know what all of the ramifications were.”

Then, he said, county officials anticipated that the state might force counties to assume management of Medi-Cal “and we wanted to have something in place, ready to go. Now the state has backed off. It’s not pushing it on us as much as we thought.”

Members of the county Human Relations Commission, who had feared reduced service to the poor if the county assumed operation of Medi-Cal locally, supported the recommendation by county administrative analyst Marianne E. Maxwell and special consultant Gerald I. Weber that the takeover proposal be dropped for now.

In a Feb. 4 letter to Maxwell, Rabbi Henri E. Front, commission chairman, stated that “the two paramount concerns are the accessibility of care to consumers and the manageable cost of the program.”

Commissioner Jean Forbath, a member of a county-appointed task force that studied and approved Maxwell’s and Weber’s findings, recently said she feared that a locally run Medi-Cal would be dominated by people from the health care industry at the expense of representatives of social service groups that serve the poor.

However, Forbath also praised Maxwell and other officials for their “integrity, their willingness to admit that the Medi-Cal takeover might not work” after some of them touted it strongly.