Balancing the Care Burden

The precarious future of medical care for the poor in Orange County became evident last week when UC Irvine Chancellor Jack W. Peltason said he would cancel the UCI Medical Center’s contract with the state’s Medi-Cal program if an agreement cannot be reached soon to increase state reimbursement rates.

Peltason’s position was supported by a formal resolution of the UC Board of Regents. And it brought warnings from other hospitals and health experts about possible catastrophic effects for the county’s poor if UCI makes good its threat.

What could be expected is a domino reaction in which the few remaining hospitals left to treat the flood of Medi-Cal patients no longer going to the medical center would also drop out of Medi-Cal rather than drown in red ink themselves.

The statistics are familiar by now. UCI Medical Center has just 6% of the total hospital beds in the county, but it treats more than 50% of the county’s indigent patients. Only about three out of 10 patients it sees have private insurance to cover hospital costs. And the state’s Medi-Cal program reimburses the university less than half of what it costs to treat the “public” patients.

The imbalance has had a predictable result. The more poor people the medical center treats, the more money it loses. Last year it lost $11.2 million. The year before it was $8.6 million. UCI Medical Center is the only one of five hospitals in the UC system that operated at a loss last year. It deserves a better contract from the state, out of equity as well as for the preservation of the Medi-Cal system in Orange County.

Hospitals that drop Medi-Cal contracts would still be required under state law to treat emergency patients. But without regular care, indigent residents would face deteriorating health, and more medical emergencies could be expected, which could flood the emergency rooms of all hospitals, affecting care for all patients.

What is needed to ease the university’s financial burden is to have more hospitals treat poor people so the obligation does not fall so heavily on the Medical Center. That will not occur until the state begins making realistic reimbursements to hospitals with Medi-Cal contracts.

Some people may view Peltason’s warning about canceling the university’s contract as a bargaining chip in a contract struggle between two state systems. But the $11.2 million that the university lost last year treating Medi-Cal patients cannot be dismissed so easily. If the university is forced to cancel the contract, some health experts view it as the end of any really workable state program for the poor in Orange County.

The reality is that neither UCI Medical Center nor any other hospital can stay in business when the more poor people it treats, the more money it loses each year.