Laguna Hills dermatologist Terence F. Maloy, 62,...

Laguna Hills dermatologist Terence F. Maloy, 62, recently completed his one-year term as president of the Orange County Medical Assn. As head of the 2,600-member group, he helped forge the county-run OPTIMA health care program, which will provide low-cost medical care for the poor under a government-paid health maintenance organization plan. The part-time UCI School of Medicine professor, now planning his semi-retirement, recently spoke with Times staff writer James M. Gomez.

* Why were you nominated as president of the Orange County Medical Assn.?

I first got involved in dermatology (issues) on the state level as an Orange County representative about 10 years ago. I also had exposure at the state level with the California Medical Assn. and I was chairman of several reference committees, which hear all our resolutions and legislative proposals. And all of a sudden the doctors here in Orange County realized they had somebody who could run a meeting. So I was asked because I already had state exposure and could do it. I am very interested in the political process.

What specific goal did you have for yourself when you took office?

Medicine is obviously going through tremendous changes and I didn’t know if I could exert any power over what was going to happen. I can’t honestly say what I’d do for sure. I don’t envy Hillary (Rodham Clinton, who chairs an administration task force on health care reform) or any of these people really.

And yet I thought the opportunity for serious mistakes was so critical that I just wanted to have a little input into the process and to some extent I suppose all activists do, no matter how it works out.

I mean we are in for wrenching changes in medical care and . . . it’s going to be rather unpleasant. But they could be disastrous, or in the long run they could be very constructive.

What accomplishments do you think you made as president as you look back on it now?

The Orange County Medical Assn. has put together the OPTIMA (Orange Prevention, Treatment and Intervention Medical Assistance) program in large part, in cooperation with the Board of Supervisors. I can’t deny the contributions of (supervisors) Harriett Wieder and Gaddi Vasquez on that. But nevertheless, we had a lot to do with that. I have stressed contacts with our local legislators and our federal legislators when they come back from Washington. We met with (Rep. Robert K.) Dornan and we met with (Rep. Dana) Rohrabacher. The Sacramento people we see all the time.

Were there any surprises when you came on board?

I didn’t realize how intensely we’d be involved in the political process with this OPTIMA business. And also, we have become much more active politically in the past three years. We also have a very savvy executive director, Martha Bonner. She has just kept this place hopping as far as our interaction with the political process in Orange County goes.

How does the association view itself along the political spectrum?

That is not an easy question to answer. In terms of malpractice reform, this is the one place that OCMA has a lot in common with the Republican Party in California. On this issue, or personal injury reform, product liability reform, and similar things, the Republicans tend to be more protective of what we consider to be our interests. Whereas in other issues, like funding for the poor or even Medicare patients, the Democrats frequently are more on our side.

Is there a trend among doctors to leave private practice for employment with managed care companies?

That is correct. We have a very competitive marketplace. Certainly, in regard to specialists, Orange County has a serious overcapacity problem. For instance, we could get by with 40% of the number of dermatologists we have. Now in managed care, Kaiser and places like that do a wonderful job of treating patients. And they can get by with 40% of the dermatologists that they have. So we have serious overcapacity problems in Orange County. Consequently, a lot of people--practically everyone I know--have seen a marked decline in the size of their practice in the last three years and a lot of them are jumping ship.

If I were younger, I would be looking for a managed care contract. A lot of friends have become full-time salaried employees with FHP, Cigna or Kaiser. And I can’t think of one of those who have come back.

Do you support managed competition as the cornerstone of health care reform?

Yes, I really do in principle. But there have to be options for people who want to go it on their own. There are people who would rather keep $3,000 in the bank every year as a deductible in exchange for not going into a managed care setup, in exchange for being able to pick their own doctor and their own specialists. They are not the majority, but they are out there. In some way, these parallel tracks have to be left open and I am not sure the bureaucratic mind is capable of dealing with that idea.

What is the effect of malpractice litigation on health care providers?

Financially, it’s not just the premiums, which are only a very tiny percentage of the national health care costs. But when you take into account the added cost of “defensive medicine,” (an industry term used to describe the practice of ordering more tests than necessary to defend against malpractice suits) then we are talking about making a difference. But a lot of what we call defensive medicine is “good medicine.” In other countries, they don’t feel they can afford to send every little skin tag or eye tag to a lab for a biopsy. But technically, it is good medicine to do so, because one time in 10,000, one of those is going to be a cancer. You could defend a CAT scan on every corner because once in a while, if you don’t have those available, somebody is going to have to wait longer. It may not happen often, but it will happen enough times to get in the press and be publicized.

On the OCMA’s shift in its mission toward politics and activism. . .

“I think one time in this county, the doctors wanted and needed the OCMA to be a social outlet. That has really disappeared. That attitude has not been in existence for a number of years.”

On the effects of malpractice litigation. . .

“It makes for low morale. I have at least half a dozen friends who have either quit practice or seriously considered it after cases that attacked their professional reputation.”

On universal health care coverage. . .

“What we are most concerned about health care reform is that it is going to shove everyone in the country into a single straitjacket. I don’t think Americans will tolerate a system like that.”

On the role of MDs in the Health Care Task Force. . .

“If you were going to change the legal system, would you try to do it without consulting lawyers?”