Some Doctors Are Treating Troubled Hospitals Like the Plague

Times Staff Writer

For Fred Harder, trying to keep Paradise Valley Hospital afloat is like bailing out a boat with a teacup: He hasn’t made much progress, and his arm is getting mighty tired.

The latest wrinkle lies in trying to staff the Southeast San Diego hospital’s emergency room with the specialists it needs.

“It’s getting worse, exponentially,” said Harder, Paradise Valley’s chief executive officer. “It is becoming extremely difficult and sometimes almost impossible to get a specialist to come in to provide a necessary procedure or service unless we guarantee payment.”

The state and county under-funding of Medi-Cal or indigent patients, and the large number of completely uninsured patients, forced the hospital earlier this year to begin reimbursing orthopedic surgeons for the bills that public agencies won’t pay, Harder said. And now other specialists, such as plastic surgeons, are insisting that they get the same deal.


“I have yet to come up with a way to provide some sort of compensation to the physicians who will work with us and yet not bankrupt the hospital,” Harder said. “We aren’t getting our own costs covered, and we’re having to pay the physicians too?”

Furthermore, the problem seems to be spreading to areas of San Diego County outside the less affluent community that surrounds Paradise Valley, according to a recent survey by the Hospital Council of San Diego and Imperial Counties.

The survey found that the practice has begun or is being discussed at Paradise Valley, Physicians & Surgeons, Grossmont, Mercy, Tri-City, Palomar, Children’s and Sharp hospitals, said Dewey Baggett, president of the Hospital Council of San Diego and Imperial Counties.

“Some of them are having to offer physicians either money to act on (the emergency) backup panel, or professional liability coverage, in order for them to participate with that particular hospital,” Baggett said. “This is a trend that we have not seen in the past, and we feel like the trend is going to become worse as time goes on.”


The growing shortage of specialists to treat emergency patients will be one of the topics addressed when Harder, Baggett and others from the local health-care community testify Tuesday in San Diego before the California Medical Assistance Commission--the group many of the hospitals blame for their problems.

The panel is soliciting testimony at a hearing that will run from 9:35 to 11:30 a.m. Tuesday in Rooms 207 and 208 of the San Diego Performing Arts Center, 202 C St.

The commission negotiates with hospitals on the percentage of their costs that are reimbursed under Medi-Cal, the state health care program for welfare recipients and other recipients of public aid. The rate has run at about 60% of costs, although recent renegotiations have raised that slightly, hospital officials say.

The Medi-Cal problem is compounded by the fact that the county has tightened eligibility standards on its County Medical Services program, which was originally intended to cover the working poor. At Paradise Valley, 76% of CMS claims are denied by the county, Harder said.


Together, the limitations mean some ugly numbers, especially at hospitals such as Paradise Valley and Physicians & Surgeons, the hospitals say. Losses at Physicians & Surgeons, which its owner is trying to sell, have been reported as high as $1 million a year.

“If I look at all of the patients here at the hospital, inpatient and outpatient, about 48% of the people that we see here are either Medi-Cal or CMS or unsponsored,” Harder said. “If you go into the emergency department, that number is 57%. When you look at the referrals to specialists out of that population, the numbers get a lot worse, ranging from 65% to 90% plus, depending on the specialty.”

Harder noted that the doctors who are balking at being paid only 31 cents of every dollar they bill, the most recent hospital figure, aren’t balking at all under-funded care, but at the volume they now face.

“When the guys start saying, ‘No, I won’t do it,’ it’s usually because they have been doing it year after year after year,” he said.


At Grossmont Hospital, doctors and administrators are talking about the hospital picking up the tab for malpractice insurance during emergency room calls, said Charles White, executive of the medical staff. The cost would be about $100,000 a year, he said.

Such negotiations can be expected to occur more often, Baggett said, although many hospitals are contending that providing free care is a staff doctor’s obligation.

“It’s a domino effect,” Baggett said. “There’s no doubt about it. Anytime we start doing this for any one group of physicians, it’s bound to spread through all the other specialty groups.”

The Medical Assistance Commission meeting in San Diego is designed to air hospital complaints about such issues, said Judy Laharty, administrative assistant to the panel. It is part of the commission’s reaction to a mandate from legislators that is awaiting the signature of Gov. George Deukmejian, she said.


But so far there hasn’t been much response to the call for testimony, she acknowledged. Some of the biggest hospitals, including UC San Diego Medical Center and Mercy Hospital & Medical Center, have no plans to testify.

White said the reason may be that hospitals that have had to take adversary roles with the commission in the past several years are not used to the new openness.

“In the past, the commission has been very heavy-handed in dealing with hospital Medi-Cal contracts. And it’s hard to visualize the commission being a positive force to solve this problem, since they’ve represented efforts to spend less money,” White said. “So they will need to convince people that they can help.”

Harder said he sees the hearing as a recognition that San Diego hospitals and doctors are suffering from the combination of state and county under-funding of medical care for the poor.


“I believe that the state is growing in its awareness of what’s happening in San Diego, and I think the county is too, although the county doesn’t want to come up with the dollars,” Harder said.

He said he also is heartened by the fact that the commission responded very quickly two weeks ago when Paradise Valley asked to reopen negotiations on its Medi-Cal reimbursement rate. Discussions on that are to begin Wednesday.

Both Grossmont and UCSD also recently came to agreements with the state on new, higher-reimbursement contracts, although they would not provide specific figures.

Higher reimbursement might also be available to Paradise Valley and Physicians & Surgeons if the governor signs AB 4563, which would provide extra Medi-Cal funds to hospitals with disproportionately high indigent caseloads.