Clinton Health Plan Mixed Bag for County : Insurance: Proposal would pay for treatment of 2.7 million people who lack coverage. But officials are concerned about the end of subsidies to urban hospitals.

For Los Angeles County, with a health system in crisis and one of the heaviest concentrations of low-income, medically needy people in the nation, President Clinton’s health plan promises mixed blessings.

It would provide health insurance to most of the estimated 2.7 million county residents who lack coverage. The plan would pump a stream of money to patients whose care has contributed heavily to a financial crisis that has public and private hospitals on the critical list.

But it would also end the federal disbursement of millions of dollars to urban hospitals that receive a disproportionate share of these non-paying patients. That money allowed the county to keep public health centers open this year during a budget crisis and provided badly needed money to nonprofit hospitals for support of financially shaky trauma centers.

Another drawback for Los Angeles County is that the Clinton proposal would not include illegal immigrants in its plan to guarantee health insurance to all Americans, although if undocumented immigrants are employed, the plan would require their employers to cover them in company-sponsored plans.

In another major change, the plan would end the federal Medicaid program, called Medi-Cal in California, as it is known today. Most of the county’s 1.5 million Medi-Cal patients would lose their ability to choose their doctors under the fee-for-service system and would be shifted into managed care plans. Only disabled Medi-Cal patients would remain under the fee-for-service system, and then only temporarily.

This troubles some health care workers because even though many believe that managed care plans have much to offer low-income people, these plans have a bad track record in California. In the past, health maintenance organizations have fought mandatory controls that would have required them to take Medi-Cal patients on the grounds that state and federal reimbursements fell far short of covering the cost of such patients.

At this point, local health experts are cautious in their assessments of the Clinton plan, which is said to be undergoing revision.

The general reaction to the plan is that it is strong on philosophy and guiding principles, but short on the hard numbers that local health officials want to see. Dr. Jonathan B. Weisbuch, medical director of the county Department of Health Services, said the county has enough medical resources to make the Clinton plan work, but it would not be easy. “We are in for a hell of a journey,” he said.

State and local health administrators have in some cases been working for years to get the type of plan Clinton is proposing.

California last year embarked on a project to shift all Medi-Cal patients into a managed care system, and counties are setting up local health alliances that will be able to fit into the revamped health system proposed by Clinton. The Clinton plan envisions a system of regional and corporate alliances of consumers and employers that would purchase care from collectives of doctors, hospitals and insurance companies.

The problem is that as in many parts of the United States, the county’s health care system is divided starkly between the haves, who with extensive insurance coverage get the pick of top hospitals and physicians, and the have-nots, who either have no insurance or rely on public insurance programs such as Medi-Cal. This group, which the Clinton plan seeks to help, faces long lines in emergency rooms, months-long delays in getting appointments with specialists, spotty care, bureaucratic red tape and a host of other problems in order to get medical care many Americans take for granted.

Robert C. Gates, director of the Los Angeles County Health Department, said he believes one of the fundamental premises of the Clinton plan--that managed care programs can result in better and more inclusive care to needy Americans--is on target. But, like other local health administrators, he said he was concerned that the plan will not extend its universal coverage to undocumented residents.

Estimates on the number of undocumented immigrants in the county range from 250,000 to 700,000. Even though a copy of the Clinton plan being circulated in the county envisions that federal funds will finance the care of the undocumented immigrants using emergency rooms, Gates is worried.

“You cannot just ignore undocumenteds. There has to be some recognition, some funding for undocumented aliens. Without it, the rest of the plan is not going to work in this county,” Gates said.

He said he was also concerned that the Clinton plan anticipates phasing out reimbursements to urban hospitals for the care of the indigent. The county received $450 million in such payments this year, and they were credited with allowing the county to keep open all its hospitals and regional health centers.

In a recent study, the Hospital Council of Southern California identified the treatment of the uninsured as a key reason that half of Southern California’s hospitals lost money in 1992. Providing care to uninsured and indigent patients cost hospitals $577 million in 1992, the study said.

The initial reaction of the hospital council to Clinton’s plan was highly favorable.

“We are in complete agreement with about three-quarters of the Clinton plan,” said David Langness, a spokesman for the hospital council. “This is what we have been working for for many years.”

Langness said hospital administrators are not worried about losing the federal reimbursements for indigent care because everyone will be covered under the new plan, except illegal immigrants.

He said hospital beds, now half full, can be expected to fill up. “There are 30 million people in this state, and 6 million of them don’t have health insurance. Those people under this plan will get the basic benefit package and be able to have health care.”

He echoed the comments of a Clinton Administration official who participated in the drafting of the health plan.

“Counties and the state now spend a lot of money taking care of people who don’t have insurance. That money will be freed up because a lot of people not covered now will be covered in the future,” said the official, who requested that he not be identified.

Fern Seizer, executive director of the Venice Family Clinic, said there is much to like in the Clinton plan but she is worried about the exclusion of undocumented county residents.

Her clinic, which treats only indigent and low-income patients, meets its budget with a combination of government money, private contributions and volunteer labor. Open six days and four nights a week, the clinic sees 175 clients a day, and on average turns away 50 people a day.

“If the new system really encompasses everybody, we’ll be here as we are now, except the people who use us won’t be charity care: They will be entitled to it and the money will follow them,” Seizer said.

Joseph A. Kelly, head of the managed care program for the state Department of Health Services, said “the size of Los Angeles County is the problem,” referring to its population and geography.

Kelly said 4.2 million of the county’s 9-million population fit into the medically needy category, and forming managed care health alliances to serve them will be a monumental task.

Aside from sheer numbers, federal and state health planners will have to overcome problems that have plagued public managed care systems for years.

Legal aid lawyers and health advocates for the poor have complained that Medi-Cal patients enrolled in managed care plans on a trial basis faced substandard treatment, loss of choice and strong-arm tactics by health care networks.

The Clinton plan, like the state plan, will contain incentives for doctors, hospitals and other health care providers to reduce costs. But attorney Michele Melden, who works for the National Health Law Program in Los Angeles, said the experience so far has been that “incentives against overproviding can lead to underproviding.”

Health experts say that most success with managed care programs has been with private patients enrolled by employers. Few large managed care plans have experience dealing with large numbers of low-income and indigent patients.

Michael R. Cousineau, an authority on homeless health care with the UCLA School of Public Health, said that in any given year about 200,000 people apply for homeless benefits and that on any given day, 30,000 to 50,000 homeless people are on the street.

“You can’t just give them an insurance card and assume they are going to have their health needs met. These managed care plans require a fairly well-informed consumer. You have to have the wherewithal to maneuver through these systems, to be an advocate for yourself. I think the homeless will be at a disadvantage moving into these systems. They will need help,” he said.

The Clinton plan envisions the problems of the homeless, as well as those who face cultural and language barriers. So far, it is uncertain how much money will be provided to meet these needs.

Time and again, knowledgeable sources said that what sounds so simple when it is outlined in the Clinton plan is difficult to work out.

The plan talks about giving each American a special health identification number and creating a national network that will allow the tracking of patients through the system.

In Los Angeles County, public health officials would settle for one that allows them to keep up with the 4.5-million patient visits each year in county hospitals and community health centers.

“It would be an incredibly difficult thing for us to build a manageable information system to keep track of doctors, patients, money that is being spent, hospital days, X-rays and so on,” said county medical director Weisbuch. “You really have to have that kind of system in place for a managed care program, and we don’t have that today.”