Doctors Deserve Medi-Cal Hike

In the last week, as legislators have fought over the state’s multibillion-dollar surplus and sought ways to finance a tax cut, one favored target has been Medi-Cal, the state’s health insurance program for the poor and disabled. Proponents of a $45-million increase in Medi-Cal payment rates say the existing program is far too stingy: It has frozen virtually all of its payment rates for doctors since 1985. Opponents say the freeze has been beneficial, resulting in per-patient spending costs 37% lower than in other states.

The opponents of the increase are right that a key to Medi-Cal’s success was its realization in the mid-1980s that it no longer needed to raise rates every year to entice doctors to treat Medi-Cal patients, because managed care was by then reducing the fees in private medicine.

But that approach cannot work forever. By the early 1990s, most Medi-Cal rates had fallen well below managed care rates, leading physicians and health plans to withhold treatment or drop out of the program altogether. Today, 80% of California pediatricians limit or refuse to accept new Medi-Cal patients, up from 70% seven years ago.

The $45 million had been earmarked to finance a small increase in Medi-Cal payments to primary care physicians. That is the right place to start, because these family doctors have taken an especially big hit. A physician who stitches up a superficial wound gets $64.50 in Texas, $49.84 in Washington state--and only $13.48 in California.

Rather than approving or even raising the modest $45-million increase, however, a conference committee recently cut it to $35 million and is now being pressured to trim more.

The ultimate solution is to encourage more employer-based health insurance. But the Legislature has only just begun to think about how to offer incentives to help employers do that.

Out there in the jungle of competition for the state’s surplus dollars, Medi-Cal doesn’t have a big voting constituency. Yet even in Sacramento, even in an election year, legislators sometimes do the right thing by way of public policy--and patching a widening hole in the health care safety net is exactly that.