Medicaid Bills for Poor Up 25% in U.S., 36% in California : Health: Another 3.3 million persons were added to beneficiary ranks nationally, 466,000 in the state. This was a 12% jump in both enrollments.

Government spending on the medical bills of the poor soared 25% nationally and a staggering 36% in California last year, the government reported Wednesday, in another sign of the extreme difficulties that the Clinton Administration will face in its efforts to control health care costs.

The huge jump in California drove up outlays by $1.7 billion at a time when the state is under severe budget pressures.

An additional 3.3 million beneficiaries were added to the Medicaid ranks nationally in fiscal 1992, with 466,000 of them in California, according to the federal Health Care Financing Administration. That was an increase of 12% in both the national and state enrollment.

“All the states are scrambling to find a way to survive in an increasingly adverse economic climate, and California is among the hardest hit in the nation as it struggles to handle this health cost problem,” said C. Duane Dauner, president of the California Assn. of Hospitals and Health Systems.

Total federal and state Medi-Cal outlays in California, which are split 50-50 between Washington and Sacramento, reached $12.3 billion last year, an increase of $3.3 billion. (Medicaid is known as Medi-Cal in California.)

About $850 million of the increase represented additional funds from Washington to help local hospitals with unusually heavy caseloads of Medi-Cal beneficiaries and the uninsured. However, the rest of the surge reflected the higher costs of service and the more intensive care required by a portion of the population.

“California has a propensity to have more people who enter into the public health care system in a fragile state, who need more expensive health care and for a more prolonged period of time,” said Betsy Hite, deputy director of the Department of Health Services in Sacramento, which runs the Medi-Cal program for 5.2 million beneficiaries.

For example, the program treats almost half of all AIDS patients and the vast majority of children with AIDS. “This is a population that didn’t exist a few years ago and is extremely expensive,” said a federal HHS official. “There are drugs available to keep people alive longer and spending is much more intensive.”

Children born to drug-addicted mothers also are a growing population group: The course of treatment in neonatal units can mount to several hundred thousand dollars a year for a single infant.

California has more than 2 million uninsured, illegal immigrant workers, many of whom rely on public hospitals and Medi-Cal for their health care needs.

In addition, Medi-Cal spending for patients in emergency rooms and intensive care wards jumped because there was a significant increase in violence, particularly in Los Angeles, Dauner said.

“Hundreds of injured people were treated” in local hospitals during and after the April riots, he said.

The Medicaid program is available for poor families and for poor elderly and disabled persons. There were 31.6 million Americans enrolled nationally and 4.5 million in California during the fiscal year that ended last Sept. 30. National spending totaled $118.2 billion last year, an increase of $23.6 billion.

Even with the huge spending surge, Medi-Cal does not pay its own way, according to the hospitals and doctors who provide the care.

In California, the program pays just 61% of actual costs for hospital services and 50% of the cost for outpatient treatment in doctors’ offices and clinics, Dauner said.

This means that hospitals and doctors must shift some of those costs to other payers, notably those covered by private insurance plans.

But businesses, faced with medical bills that are rising at three times the rate of inflation, have been fighting back against this cost-shifting by negotiating directly with health care providers for discounts or insisting that their health insurance carriers get tough with providers.

President Clinton has promised to provide universal coverage, including health insurance for 37 million Americans who do not have it, a pledge that will costs billions of dollars. It is unclear how he can accomplish this daunting task without substantial tax increases.

Medicaid and Medicare, the health program for persons over 65 and the disabled, cannot provide the funds because they do not now cover all their costs. And corporations and individuals no longer want to be the victims of cost-shifting from the federal programs.

“Everything is still scattered and fragmented in a piecemeal system,” said Dauner of the hospital group. “If we get universal access and a uniform benefit package nationwide and tax policies to support that, and economic discipline through the delivery system, we can do it.”