Hospital Pushes Bill to Block HMO License for County

Community Memorial Hospital has taken its ongoing war with Ventura County Medical Center to Sacramento, pushing legislation aimed at blocking the county hospital from getting a license that would let it set up its own HMO.

The county has applied for a special state license to create a cost-saving health maintenance plan for county employees as well as contract workers. The license would also enable the county to establish a managed-care program for Medi-Cal patients in the future, officials said.

But Community Memorial representatives fear that the county hospital is planning to use the program to compete for privately insured patients. The private, nonprofit hospital has spent more than $100,000 lobbying in Sacramento for legislation that would limit the county’s ability to expand its health care operations, records show.

Today, a state Assembly committee will hold a hearing on a bill that would prohibit the county from obtaining a license to offer a managed-care program.

Community Memorial officials said they oppose the county using taxpayer dollars to create a managed-care program, which could then be offered to the general public.

“They’re creating a private health care plan,” said Michael Bakst, executive director of Community Memorial in Ventura. “This is far beyond the role of government.”

County hospital officials rejected the notion they are trying to compete for private patients. Instead, they said the HMO program would allow them to control the cost of health care services for employees enrolled in the county’s current health plan.

Community Memorial’s actions, Supervisor Frank Schillo said, appear to be an attempt to drive up medical costs so high that the county would not be able to provide a competitive health care plan for its own employees.

“It’s just a heinous way to make it more difficult for us to operate a hospital,” he said. “It’s just a nasty, nasty thing for them to be doing.”

With the state license, the county hospital would be able to put a cap on the amount of money paid to contract doctors by establishing a flat monthly fee based on the number of patients seen or some other criteria, said Dr. Samuel Edwards, county hospital administrator. Otherwise, those costs will likely increase, he said.

In the county’s license application, officials state that they are also seeking to offer managed care to employees who work in seven satellite clinics scattered throughout the region. These employees work for private physicians who contract with the county to provide health care services to the poor and uninsured.

“If we could, we’d like to” provide health care for these employees, Edwards said.

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But Bakst said the tax-supported county program would compete directly for private patients if it were to follow through with such a plan. He also voiced concerns that the county is positioning itself to eventually offer managed-care services to the public.

“We don’t see the role of government to compete with private insurance companies,” he said. “That to us is really dangerous. The county has never been involved in managed care.”

Edwards said that while the state license would enable the county to offer managed care to private employers or individuals, it has no intention of doing so.

“If you get a driver’s license that means you can drive a taxicab,” he said. “But that doesn’t mean you’re going to.”

In any case, he said, a decision to expand into the private sector would not be up to hospital officials but to the Board of Supervisors, who have repeatedly said that the county has no plans to do so.

Edwards said the primary reason for applying for the state license is not to provide health insurance for contract workers. The real motivation, he said, is that the Department of Health Services has advised counties across the state to get ready to switch to a managed-care Medi-Cal system--something many congressional leaders favor.

A dozen counties in the state already are participating in such a managed-care system as part of a pilot project aimed at reducing the cost of government-subsidized health insurance for the poor, he said.

“Managed Medi-Cal is coming,” he said. “And if it happens, it’s going to happen very quickly.”

For the county to participate in a managed Medi-Cal program, he said, it must have a state license. Once an application is filed, it could take a year or more to get a license and that is why the county is doing so now,” he said.

Meanwhile, the state Assembly Insurance Committee has scheduled a hearing this morning in Sacramento on the Community Memorial-backed legislation.

Assemblyman David Knowles (R-Cameron Park), who chairs the committee, has agreed to introduce the legislation on behalf of Community Memorial. The bill would only affect Ventura County and not the other counties already participating in managed-care programs.

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Edwards, of the county hospital, and Pierre Durand, director of the county’s Health Care Agency, will travel to Sacramento this morning to attend the hearing.

The managed-care proposal is not the first time Community Memorial has taken on the county hospital.

Community Memorial lost a lawsuit last year aimed in part at stopping the county from constructing a new $51-million outpatient wing at the medical center, located two blocks away from the private, nonprofit hospital.

But Community Memorial was successful in qualifying a countywide referendum on the project that will appear on the March 26 ballot.