As the media continue to focus on the Clinton health-care reforms, much of the substantive movement in the health-care market is on the state and local levels. Although this piecemeal reform may at first appear insignificant, in reality it will be at the state level that the structure of health-care delivery will be fine-tuned. Little attention has focused on major pieces of state legislation and policy agendas that will gradually change the availability and access of services.
President Clinton's major contribution to health-care reform in the short run may be providing the stimulus to the states to realign their services and to develop financial incentives for more inclusive and accountable systems. This is particularly true for entitlement programs such as Medicaid. State solutions for Medicaid and the poor may be where the true benefits and savings from health-care reform occur.
In California, more than 5 million women, children and aged or disabled people are covered by Medi-Cal, California's Medicaid program. This fragmented and outmoded system encourages use of more expensive emergency care rather than cost-effective primary care. Also, due to low rates of Medi-Cal reimbursement and the perceived stigma of being labeled as a Medi-Cal provider, many counties have a severe shortage of providers. As costs and enrollment soar for Medi-Cal--approximately $14 million is spent annually on Medi-Cal and enrollment within the last 12 years has increased almost 80%--the need for drastic reform is apparent. In short, the state must become a prudent purchaser of health care and at the same time increase access to primary-care services.
Recently, California's Department of Health Services Director Molly Coye has attempted to tackle the sinkhole of Medi-Cal by developing a state plan for Medi-Cal managed care. In this two-part plan, the state will contract with 13 counties--including Los Angeles, San Diego, Riverside and San Bernardino--for local plans to cover 60% to 70% of the Medi-Cal population. The remainder will be placed in a single HMO or a joint venture among HMOs through a competitive bid process. Both plans are to be in operation by March, 1995. Each county is expected to develop a plan to include a number of key issues such as improving access to mainstream health care, allowing for community input on the managed-care plan and incorporating quality-assurance programs that guarantee timely treatment as well as culturally and linguistically appropriate services.
Los Angeles County has the largest number of Medi-Cal beneficiaries--more than 1.5 million, almost five times the number of San Diego County, the county with the next largest number. The overall success of the state's Medi-Cal managed-care plan will be influenced by the success of Los Angeles County's plan. The county Department of Health Services has developed a diverse Managed Care Planning Council representing key actors in the public and private delivery systems. After several meetings, the group has proposed a quasi-public body to organize health-care services for both Medi-Cal recipients and for the rest of the so-called medically indigent population, that is, other poor people without health insurance. The council has recommended allowing for an informed choice of provider, with a consumer advocacy representative to minimize abuse, including primary health service teams of providers and integration of services to prevent duplication.
This coordinated effort by community and private providers to provide rational managed care to Medi-Cal and medically indigent people must be viewed with guarded optimism. It is a first step in redefining a health-care delivery system that is not only more user-friendly to a diverse population, but also more cost-effective. If it works, California could once again play a major role in developing a model for reorganizing health-care delivery for the country.