Bill to Block License for Hospital Dies

Community Memorial Hospital has lost the first round in its effort to stop Ventura County Medical Center from getting a state license to create its own managed health-care program, a move the county says it needs to control health costs.

Community Memorial Hospital had asked Assemblyman David Knowles (R-Cameron Park) to carry legislation that would block the county’s license application, arguing it is unfair to use taxpayer dollars to set up a managed-care program that could one day compete for privately insured patients.

But Knowles, who heads the powerful Assembly Insurance Committee, agreed to drop his bill Tuesday after state Sen. Cathie Wright (R-Simi Valley) complained to him because she had not been consulted on a matter that affects her district.

“Score one for the underdog,” said Penny Bohannon, the county’s state lobbyist. “The end-run by Community Memorial Hospital did not work.”

Pierre Durand, director of the county’s Health Care Agency, said, “We were encouraged to see that reason prevailed.”

But the fight isn’t over.

Although he dropped the bill, Knowles told the insurance committee he plans to reintroduce the legislation in the next few weeks.

“This is not the end, it’s only the beginning for us to express our concerns over Ventura County’s actions to the state Assembly,” said Michael Bakst, director of Community Memorial Hospital.

Community Memorial’s attempt to block the county’s state license application is only the latest scuffle in an ongoing war with the neighboring Ventura-based county Medical Center.

The private, nonprofit hospital has been involved in a costly legal and political battle with the county hospital, which Community Memorial believes is trying to expand its operations to compete with private hospitals and now private health-insurance providers.

But Durand said the county hospital’s objective is not to attract private patients but to reign in health-care costs and to prepare for Medi-Cal managed care, a fast-growing trend at the state and national level.

With a managed-care license from the state, Durand said the county would be able to keep a lid on health-care costs for the 2,700 county employees now enrolled in its health plan.

He said the license would mean the hospital could put a cap on the money paid to contract physicians by establishing a reimbursement plan based on the number of patients seen or some other criteria. Under the current system, the county’s insurance program pays doctors a fee for every service provided to a patient.

“Right now we can’t control costs,” Durand said. “With the license we would be able to reduce reimbursement. This would be a savings to the taxpayers.”

But Community Memorial officials said the county is also seeking to expand its health-insurance coverage to employees beyond the county’s payroll, even though Durand and county officials say this is not the case.

In the application for its managed-care license, the county states it “would like to offer enrollment in the Ventura County Health Care Plan” to several doctors and their employees working on contract at seven satellite county clinics scattered around the region.

“They’re positioning themselves to enter the private market,” Bakst said. “The proof is in the application. It proves that I’m not out in the wilderness crying wolf. . . . Next week it’s the employees in the clinics, and the week after that the people at the Broadway.”

Durand said the county’s license application presents only “some possible scenarios” and does not necessarily mean that the county will provide health coverage to contract workers.

“I have no authority to expand into the private sector,” Durand said. “We couldn’t do that. That is a policy decision. And the policy is made by the Board of Supervisors.”

Supervisor Frank Schillo said he has no problem with providing insurance coverage for the clinic workers because they are an integral part of the county’s health-care system.

But he said the county would not market its managed-care program to private employers or the general public.

“There is no intention on the board’s part to do that,” he said. “I’m willing to sign an agreement saying this.”

Durand and Schillo said the primary reason the county is seeking a license to create a health-management organization is to be able to participate in a Medi-Cal managed-care program. They said federal and state officials are pushing hard to administer Medi-Cal in an HMO-type system to reduce the costs of government-subsidized health insurance for the poor.

Currently, 12 counties in the state participate in such a program.

Schillo said Community Memorial’s actions are an attempt to put the county hospital out of business by driving up its medical costs.

“We have to keep the cost of health-care services to taxpayers in mind, they don’t,” he said. “It’s like crippling your own child to say we can’t be involved in [managed care].”