County Sets Up Structure for HMO System for Poor : Health: Program will provide cheaper, more efficient care for 250,000 Medi-Cal patients, proponents say. OPTIMA would be the state’s largest such organization.

Orange County moved a step closer Tuesday toward a total revamping of its medical care system for thousands of poor residents, as the Board of Supervisors set in place a governing structure for what will be the state’s largest public health maintenance organization.

The HMO promises cheaper and more efficient care for at least 250,000 Medi-Cal patients, officials said.

A key part of the program will be an attempt to attract more physicians to what has been a dwindling pool of doctors who now accept Medi-Cal patients, by promising a more efficient means of reimbursement for their services.

“I see this as a landmark decision for the delivery of health care throughout the country,” said Board of Supervisors Chairman Harriett M. Wieder. “This is an example of how you manage a health care program differently.”

Wieder, who helped develop the proposal, said a copy of the plan has been forwarded to First Lady Hillary Rodham Clinton, head of a task force developing a new health care strategy for the nation.

“It is my understanding that we are well ahead of any other jurisdiction of our size in the nation on this,” Wieder said. “I regard this as a wave of the future.”

Although the program has been hailed by government officials and local health care professionals for its potential high-quality health care and cost-savings, it still lacks $5 million needed to begin full operation by January, 1995.

The state has promised $567,000 to fund initial planning for the project--known as the Orange Prevention and Treatment Integrated Medical Assistance Project, or OPTIMA--but Supervisor Gaddi H. Vasquez said he is confident the remaining money can be found.

“Given that there is such a strong coalition of people supporting this program, I don’t see it (funding) as an insurmountable obstacle,” Vasquez said. “We’re still a ways away from implementing this . . . (but) this is a significant step. I remember how doubtful people were that this train would ever leave the station.”

Tuesday’s board action effectively creates a separate bureaucracy to control and distribute about $460 million in annual Medi-Cal payments to county recipients, a task now handled by the state.

The state distribution process has long been criticized by physicians who say the paperwork necessary to record billings and seek reimbursements is complicated and confusing.

The new system would allow doctors and hospitals to collect from a local authority a set monthly fee for each patient they treat in the system.

As approved by the supervisors, the OPTIMA system would be governed by a seven-member board of directors, with daily operations left to an executive director. Tuesday’s approval also authorized searches to fill positions on the board. Board members will select the executive director.

Dr. Melvyn Sterling, president-elect of the Orange County Medical Assn., said that while the association was “pleased to support” the program, “we have an uphill battle and the stakes are very high.”

Sterling said the program is heavily dependent on a massive education program designed to shift initial treatment of Medi-Cal patients from the expensive setting of hospital emergency rooms to local doctors’ offices.

At the start, the program will attempt to match low-income residents with physicians and emphasize preventive medical care over waiting for health crises to develop.

“We need to change the culture and reality of how health care is provided,” Sterling said. “What we want to do is catch the problem much earlier on. Instead of getting people with a stroke, we can treat them for high blood pressure. . . . The economics of this are staggering and little known.”

A study by a private consultant for the project has estimated that OPTIMA could save as much as much as $175 million in Medi-Cal costs during its first five years. The savings are expected to be generated by better management by the local authority and through encouraging preventive health care to reduce later costs.

“This system will remove the bureaucratic impediments that now occur with every interaction within the Medi-Cal system,” Sterling said. “We must preserve relationships between patient and (physician). And where no relationship exists, we must promote these types of relationships.”

Similar programs exist in Santa Barbara and San Mateo counties, but officials said that Orange County, with 250,000 Medi-Cal patients in 1991, is by far the largest county in the state to consider the plan.

Thomas E. Uram, director of the county’s Health Care Agency, estimated that it would take about 100 people to operate the new system. “We think we’re replacing a cumbersome bureaucracy with a more efficient system,” Uram said.