Taking the Corporate Middleman Out of Health Care

Thank you for your overview describing the corporatization of Medi-Cal (“A Medi-Cal Matter, July 21). In this latest corporate welfare program, it should be noted that most Medi-Cal HMOs act as middlemen, providing no direct patient care. They often take 20% or more off the top for profit and administration--with commensurate reductions in funds available for patient care.

Outrageous CEO salaries and blatant fraud and abuse in Medicaid HMOs have been well documented in other states. Medi-Cal HMOs are expected to deliver patient care at about $100 per patient enrolled per month, with the actual treating physician often receiving about $10 per patient per month. The physician is not guaranteed to break even financially, gambling that services provided to enrollees will cost less than the monthly stipend. How many private businesses would sign such a contract? In sharp contrast, the federal government pays Medicare HMOs over $600/patient/month--clearly a vast profit margin.

From traditional fee-for-service medicine, we are now approaching fee-for-non-service, with an emphasis on stockholder health, not patient health. Accountability can be imposed only when CEOs, stockholders and government officials are required to enroll in the health plans they promote. Justice in health care will prevail only when citizens have equal access to basic health care--without a corporate middleman.

Dr. NADINE SIDRICK

Physicians for a National Healthplan

San Diego

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We would like to commend the Los Angeles Times for educating the public about the aggressive marketing tactics of HMOs seeking to enroll the Medi-Cal population into managed-care plans. The state initiative to transfer Medi-Cal recipients into HMOs impacts the health care of millions in Los Angeles County.

Not mentioned explicitly in the article is the threat that Medi-Cal managed care poses to the very future of traditional health-care safety net providers in Los Angeles County, including community and free clinics, local community hospitals and the county Department of Health Services. Not only do these traditional safety net providers have a long history of providing care to the Medi-Cal and uninsured populations, they have relied on revenues tied to the Medi-Cal program to cover much of the cost of providing care to the uninsured. There are no guarantees that HMOs awarded Medi-Cal contracts will maintain a relationship with these traditional providers or that the safety net providers, faced with a decrease in Medi-Cal revenues, will even be able to keep their doors open.

Also not mentioned in the article is how mandatory enrollment in an HMO affects the patient. The Medi-Cal population includes people whose lives are disrupted by poverty, homelessness, substance abuse and mental illness. Many Medi-Cal recipients have established relationships with providers who are familiar with the economic and social issues that they face and have developed innovative programs to address them, including outreach, transportation, case management and child care. It remains to be seen whether HMOs are really willing to make a long-term commitment to this population, let alone incorporate these types of programs into their benefit packages.

Los Angeles County cannot afford any additional erosion to the already fragile safety net. The state and HMOs with Medi-Cal contracts must ensure that high-quality comprehensive care continues to be available to all vulnerable populations The future of 1.8 million Medi-Cal recipients and 2.6 million uninsured in Los Angeles County depends on it. So does the health and well-being of all county residents.

MARK FINUCANE

Director of Health Services County of Los Angeles

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When a health plan that serves Medi-Cal members fails to do its job, that plan pays a price; this fact was somehow absent from “A Medi-Cal Matter.”

In the last 2 1/2 years, the California Department of Health Services has punished health plans on 15 separate occasions. Three plans ended up paying a total of more than $1.5 million because they didn’t follow the rules. Others were forced to stop marketing, stop advertising and stop enrolling beneficiaries--which also adds up to fines because it costs the health plans money. And four more received the “death penalty”--their contracts were terminated or not renewed.

The article describes how one executive director of a health-care clinic had to “shoo away” a marketing representative of a health plan, but fails to mention that the representative could not have even entered the clinic without its permission. Door-to-door marketing to Medi-Cal members is illegal, thus ending any abuses that may have come with it.

The department’s oversight of the health plans serving Medi-Cal involves continuous, day-to-day monitoring, which includes inspections and audits of the contractor, subcontractor, provider facilities, management systems and procedures, and books and records.

Although the article describes various misdeeds by health plans that have since been corrected, it failed to mention that if Medi-Cal members have a complaint about a health plan, they can tell us about it by calling (800) 430-4263. We want to know.

JOHN RODRIGUEZ

Deputy Director

Medical Care Services Department of Health Services

State of California