Money Problems From Birth

The crisis that has overtaken obstetric facilities serving the poor in Los Angeles and Orange counties has a single cause: the under-funding of Medi-Cal, the state and federal program that provides health services to many of the nation’s low-income families. Sadly, there is no cheap, shortcut solution. As long as the under-funding continues, the health and safety of thousands of newborns and their mothers will be in peril.

Some additional private hospitals have said they would accept Medi-Cal obstetrics cases, but only obstetrics cases, to help ease the burden. That would do more harm than good. It would undermine the hospitals that contract with Medi-Cal to provide full service. It would also risk the continuum of care that should include prenatal and postpartum services to both mother and child.

State officials have negotiated two special arrangements to ease the crisis. In Los Angeles County, overflow contracts have been approved so that the county is able to divert 1,190 births a year to two dozen private hospitals, and the program will be expanded. That still leaves county hospitals with an annual volume of more than 38,000 births. In Orange County, where the hospital at UC Irvine was being forced to divert patients at times of overcrowding, a transitional contract has been signed with AMI Garden Grove Hospital covering pregnancy-related care. But in the Santa Ana-Irvine area, five of the eight hospitals do not have Medi-Cal contracts.

But special arrangements provide only marginal relief and do not address the fundamental funding problem. Furthermore, the Medi-Cal funding problem impacts the entire health system as hospitals and doctors compensate by increasing the billings to other patients.

In California, 40% of the obstetric hospital days are funded by Medi-Cal. That places a heavy strain on contract hospitals because Medi-Cal fees cover, on average, only 61% of costs, according to the California Assn. of Hospitals and Health Systems. As a result, one-third of the state’s hospitals refuse Medi-Cal contracts.

Overwhelming case loads have developed at many of the major public facilities, including the four acute-care Los Angeles County hospitals and UC Irvine, the principal public facility in Orange County. Women’s Hospital at Los Angeles County-USC Medical Center, designed to handle 15,000 deliveries a year, had more than 18,000 births last year, accounting for 1 in every 200 births in the nation. The overload inevitably has led to mistakes and delays that have resulted in brain injury and other serious problems for some patients.

The situation has been made more difficult by the refusal of many obstetricians to accept Medi-Cal patients. The refusals have continued despite recent increases in Medi-Cal fees covering pre-natal care and delivery that bring the fees close to those under contracts with private insurers.

As state officials move toward mandatory health-insurance legislation, the crisis in Medi-Cal obstetrics cannot be ignored. Drafts of the legislation under consideration in Sacramento propose increasing the use of Medi-Cal. But the obstetrics crisis raises anew fundamental doubts about the ability of Medi-Cal to provide appropriate medical care. Any expansion of Medi-Cal, without full funding, would only worsen the already troubled health-care system.