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Doctors Deserve Medi-Cal Hike

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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.

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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.

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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.

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