New Health Care Plan for O.C. Poor Launched : Medicine: OPTIMA is expected to save money while serving patients better and paying doctors faster.

Orange County supervisors Tuesday formally set in motion a new health care system that is expected to change how thousands of poor residents receive medical services.

The board unanimously appointed a seven-member board of directors to govern what is expected to be one of the country’s largest county health maintenance organizations, providing care for at least 250,000 Medi-Cal patients.

Known as OPTIMA, the system depends largely on attracting physicians by offering prompt and reliable payment--something they long have complained that Medi-Cal failed to do.

For the patient, the program will provide ongoing health care before illnesses become critical and require hospitalization.

OPTIMA is expected to curb the spiraling cost of Medi-Cal by assigning beneficiaries to primary-care physicians, so they will no longer have to rely on expensive hospital emergency room care for routine ailments.

“Local physicians believe that OPTIMA is the best chance in several years to improve the delivery of health care to our indigent patients,” said Dr. Melvyn L. Sterling, president of the Orange County Medical Assn. It “will take patients out of emergency rooms and into physician offices. . . .”

Officials in Santa Barbara and San Mateo counties, the only ones in the state with similar (but smaller) HMOs, said they have substantially reduced use of emergency rooms by Medi-Cal recipients through early treatment of illnesses.

State and county officials say the advantage to doctors is prompt reimbursement. The Medi-Cal reimbursement process has long been criticized by physicians in Orange County and elsewhere, who say the paperwork is overwhelming. Payment can take up to six months and often represents as little as 20% of the cost of the medical care, they say.

Under the new system, a local authority, OPTIMA, would pay a flat monthly fee to primary-care doctors for every patient assigned to them. The amounts of fees for primary physicians and for specialists have yet to be determined.

“There are enormous possibilities here,” said John R. Cochran III, chief executive of Anaheim’s Martin Luther Hospital and a new OPTIMA director. “This is a key opportunity to bring Medi-Cal planning and control down to the local arena. Even in anticipation of this program, there has been a tremendous amount of physician interest. There is a big reservoir of good will that physicians are bringing to the table.”

As proposed, Cochran said, OPTIMA would represent one of the largest county-organized HMOs in the country. In initial size, the Orange County system would surpass the Care America health plan, which coordinates medical care for people spread across five Southland counties and has been in operation for eight years.

Rosemary Cox, the state’s acting chief of county organized health systems, said that attracting physician participation will be the key to OPTIMA’s success.

“It will take a lot of effort and coordination to bring it off, to bring together the number of doctors you need to serve so large a Medi-Cal population,” she said.

However, both medical and county government officials have repeatedly downplayed the health authority’s need for $5 million in start-up costs to begin full operation by January, 1995, saying enough time remains to raise additional funds.

Marianne E. Maxwell, OPTIMA’s project director, said that about $567,000 has been pledged by the state to fund initial planning for the organization.

In all, the OPTIMA board named Tuesday would control and distribute about $450 million in Medi-Cal payments to county recipients, a task now handled by the state. Based on that level of income, Maxwell said, it would not be difficult for the health authority to obtain a loan to cover start-up expenses.

“You have to be careful there is a good transition plan so that service is not disrupted,” Maxwell said. “You also have to make sure a system is designed in a way that it works for patients first, providers second, and that it is within budget, so it does not go bankrupt like Monterey did.”

Monterey County in 1983 was the first to establish a county-organized health system for Medi-Cal patients, but it went broke after just 18 months because of poor management, state officials said.

Orange County Board of Supervisors Chairman Harriett M. Wieder said Tuesday that much effort was spent in the selection of directors from a pool of more than 120 applicants who represented area physicians, health care providers and consumers.

Directors approved for service in addition to Cochran were Dr. Peter Anderson, director of emergency services at Fountain Valley Regional Hospital; Dr. Richard S. Frankenstein, pulmonary disease specialist in Garden Grove; Arthur B. Birtcher, Laguna Niguel-based developer; Joyce M. Munsell, manager of health care resources for Parker Hannifin Corp. in Irvine; Claire P. Heaney, registered nurse, and Wieder, representing the Board of Supervisors.

Cochran said a search has begun for a chief executive of the organization who would oversee daily operations.

While the appointment process was winning favorable reviews from county officials, not all community leaders were pleased.

Jean Forbath, founder of Share Our Selves, which provides food, clothing and medical care for indigent people, said some directors were not known by most advocates for the poor in the county.

“I was hoping there might be a little more representation of Medi-Cal recipients,” she said. “It was a shock to those of us involved for many, many years trying to give a voice to the poverty community on health care that we didn’t know these people. It doesn’t mean they won’t be good.”

One weakness in the OPTIMA plan, Forbath said, was that it does not cover the thousands of homeless and other indigents who are not now receiving Medi-Cal benefits.

“If it makes the Medi-Cal program work better in Orange County, it is a real plus,” she said. “But it is not the solution for access to health care for indigents in Orange County. It doesn’t cover the undocumented or the working poor who aren’t covered by health plans and can’t afford their own private physicians.”

Dianna DeVane, community services director for the March of Dimes in Orange County, said she is concerned that the board’s membership does not contain ethnic minorities or health-care providers who serve children.

“Sixty percent of OPTIMA beneficiaries will be children,” DeVane said.

In the state’s immediate future are plans to bring county-managed care to another 13 counties, including Los Angeles, San Diego, San Francisco and Alameda. However, because of a federal law restricting the number of county-organized health systems, these will not be modeled after the Orange County plan.

How New Health Plan Works

The OPTIMA Plan, targeted to go into effect in January, 1995, will replace Medi-Cal benefits and is expected to serve about 250,000 people in Orange County. The plan at a glance:

* Eligibility: Those who qualify for Medi-Cal would be eligible for OPTIMA.

* Managed care: As in a health maintenance organization, patients would be assigned a primary care physician, who would in turn refer them to specialists if necessary.

* Patient contribution: Would depend on ability to pay, as it does under Medi-Cal.

* Doctor fees: Under Medi-Cal, doctors are paid by the state after treating each patient. Under OPTIMA, primary care doctors would receive a flat monthly fee per patient seen, regardless of the number of patient visits. Fees have not yet been established.

* Funding: Medi-Cal is expected to give a board of directors more than $450 million to start with, about the same as Medi-Cal costs in 1991.

Households on Medi-Cal

The number of Orange County households eligible for Medi-Cal in the past five years has increased dramatically. 1989: 73,200 1990: 100,000 1991: 140,000 1992: 180,000 1993: 220,000 *

Who Are Medi-Cal Recipients?

Medi-Cal has gone from serving the aged, blind and disabled to primarily providing perinatal and postnatal care for women and infants.

Criteria for eligibility:

* Infants, toddlers and children under age 21

* Women with children living at home

* Single mothers

* Needy or indigent

* Aged, blind or disabled

* Anyone receiving Aid to Families With Dependent Children

Sources: Orange County Health Care Agency; Orange County Department of Financial Assistance.

Researched by KEVIN JOHNSON and APRIL JACKSON / Los Angeles Times