Medical Board Faces Fund Crisis

A fierce fight over money between the California Medical Board, the agency that disciplines doctors, and the state’s powerful physicians lobby has some regulators fretting over the board’s financial future and, ultimately, its ability to protect the public from bad doctors.

The unusually rancorous dispute erupted recently after the California Medical Assn., the physicians’ professional group, shot down a proposal in the Legislature to increase by $90 the state’s biennial license fee for doctors. Dues are now $600 every two years.

The medical board contends that without the additional money from the higher fees, it will have to dig into its dwindling reserves and, over the long haul, may see its oversight of the state’s 105,000 physicians erode.

“Ultimately, the board could be placed in a position [in which] . . . resources dictate that only those violations most injurious to the public are enforced as the relative resources to prosecute all cases shrink,” the board’s executive director, Ron Joseph, wrote in a memo last month to board members.

The fight has broken out just as the state’s system for regulating lawyers has ground to a halt because of another political battle--between the State Bar and Gov. Pete Wilson. In that case, Wilson vetoed a bill that would have allowed the bar to collect fees from the state’s lawyers, meaning that most of the agency’s staff had to be laid off.

Though the medical board’s solvency is not immediately threatened and its dispute with the medical association conceivably could be resolved in the final days of this legislative session, some consumer advocates are alarmed.

“I see a tremendous indifference to the needs of consumers who must have a place to turn when a dangerous doctor or a dangerous lawyer is violating state statutes,” said Jamie Court, director of Consumers for Quality Care in Santa Monica. “Increasingly, the governor and the medical association have played punitive politics and not wanted there to be public oversight of either profession.”

A medical association official strongly disputed that characterization, saying that both the California Medical Assn. and the medical board want to protect the public. But Scott Syphax, associate director of the CMA, said the association is using this opportunity to bring some of its unresolved concerns to the board’s attention.

The overarching concern, he said, is a lack of financial accountability and efficiency in the branch of the state attorney general’s office that prosecutes disciplinary cases for the medical board. Syphax said the CMA also objects to the board’s tendency to “pile on” multiple disciplinary charges for single offenses by physicians, and to some “punitive sanctions” against doctors who seek help for substance abuse but haven’t harmed anyone.

*

“The fact that medical board members are angry [with the CMA] right now is unfortunate,” Syphax said. “But like every other member of the public, we want our government to hear our concerns and to be responsive. From past experience, the times of fiscal necessity are times when CMA is able to at last get the attention of the medical board. . . . Do we believe it is undue or inappropriate influence? No.”

Some board members disagree. It’s a “problem that a regulated body has such power. It’s the fox guarding the henhouse,” Phil Pace said at an Aug. 1 board meeting, according to a meeting transcript.

Some board members say many of the CMA’s concerns are beyond the board’s reach; they are controlled by state statutes. Others accused the CMA of manufacturing issues in an attempt to weaken the medical board.

“I’ve been on the board for 11 years and I’ve consistently seen dishonesty, disingenuousness and outright lying by the CMA,” said attorney Bruce Hasenkamp at the Aug. 1 meeting. “They support the lowest licensing standards of any state in the U.S. . . . They want to reduce, if not emasculate, the regulatory function of the [medical board]. It’s a war. We need to fight it and win it.”

In his recent memo to board members, Joseph suggested that the board might respond to the CMA’s move by supporting certain public policy changes that are anathema to the doctors organization, including an increase in the state’s $250,000 cap on malpractice damage awards for “pain and suffering” as well as public release of information about malpractice settlements.

Some critics of the pain and suffering cap, known by the acronym MICRA in legal circles, would welcome the medical board’s support, even if it is the result of a political feud.

“It [is] at least implicitly recognizing the importance of the tort system for deterring negligent conduct by physicians,” said Ken Sigelman, legislative co-chairman of Consumer Attorneys of California, an organization of plaintiffs attorneys. “The prospect for fair recoveries under the law is something that would be expected to improve the quality of physicians’ care. . . . [This] is something consumer attorneys have been arguing for for 22 years.”

But some medical board members do not want to hurl that political grenade.

Board President Tom Joas, a San Diego anesthesiologist who is also a CMA member, says that the pain and suffering cap should remain in place because it has worked to control medical costs in California. He is hoping for a peaceful resolution with the CMA.

“I would hope the California Medical Assn. would wake up and say, ‘Hey, these guys are right,’ ” Joas said.

In his view, the medical board has reinvented itself since the early 1990s, when it was the subject of a scorching investigation that found that it had an enormous backlog of cases, some of which were summarily thrown out or shredded.

“It’s a dedicated . . . more polished board, not packed with cronies. It’s filled with bright, proactive, forward-thinking people, not people donating a lot of money to [someone’s] campaign.”

But, Joas added, “we do not have the lobbying capability . . . that any trade organization has.”

The board first proposed a fee increase in 1995, but began negotiations in earnest during the past year, after Joseph tightened the agency’s financial operations. With an annual budget of about $30 million, the board has slightly decreased expenses for several years, Joseph said.

*

The proposal to increase fees was contained in a bill introduced by Sen. Richard Polanco (D-Los Angeles), but he removed the provision in June after a last-minute plea by the CMA.

The association’s last fee increase was in the 1993-94 fiscal year. Meanwhile, board members say, staff raises are overdue, investigators are overburdened with cases, and the Legislature has added to the board’s regulatory duties.

“We are not asking for much money and we are running out of money to do our job,” said Michael Sidley, another attorney on the board.