Community Editorial: Hospitals Deserve a Seat on CalOptima Board

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Voice of OC has written several articles concerning changes that are under discussion at the Board of Supervisors regarding the make-up of the CalOptima Board of Directors.

These stories report that some are critical of medical provider participation on the CalOptima board, yet there is strong precedent across southern California and throughout the state for a balanced CalOptima board that includes hospital and physician representation.

Supervisor Janet Nguyen’s proposed ordinance to change the make-up of the board overseeing CalOptima will bring it more in line with the model used by the majority of government-sponsored health plans serving Southern California. L.A. Care Health Plan serving Los Angeles County, Gold Coast Health Plan serving Ventura County, and CenCal Health serving Santa Barbara County all provide designated seats for hospitals, doctors and community clinics serving Medi-Cal beneficiaries.

Only Cal-Optima and the Inland Empire Health Plan do not designate seats for these key participants who provide medical care at steep discounts from what the rest of us pay for our health care needs.

The tension that exists between health plans and medical caregivers can be healthy and serve the best interest of consumers, if leverage in the market place is balanced. It is not good for the consumer if either the health plan as purchaser or the medical caregiver as the supplier gains an upper hand in determining the price of the medical care provided in a region. Without exception, government-sponsored health plans have that advantage.

We only have to compare what they pay medical caregivers versus what private health plans pay to understand this. On average, Medicare pays hospitals 76 cents and Medi-Cal pays 67 cents for each dollar it costs private hospitals to provide medical care. On the other hand, commercial health plans providing coverage for employees and other privately insured individuals pay an average of $1.17 to hospitals for every dollar of care provided.

Engineered by our government, this imbalance is what is often referred to as “government cost shifting” or the “the hidden tax” our government doesn’t want you to know about.

However, cost shifting does not always work to resolve this imbalance. Many physicians, especially highly trained specialists, refuse to treat Medicare and Medi-Cal patients at government rates, and 17 hospitals in Los Angeles and Orange counties have closed their doors over the last decade citing the low payments received for treating government-sponsored patients.

In order to insure collaboration, transparency and accountability in the policies and practices of government-sponsored health plans, most county boards of supervisors have placed doctors, hospitals and community clinic caregivers on the governing boards of these local plans.

Currently, CalOptima’s governing board includes one physician seat and two other generic “provider” seats. By specifying that there always will be hospital and physician representatives serving on its governing board, as Supervisor Nguyen proposes, we lighten the heavy hand of a government agency by installing a much-needed check and balance system for CalOptima, and we ensure that government-sponsored patients continue to have access to high quality, affordable medical care.

Within the next two years, CalOptima’s enrollment will grow by 140,000 or more. CalOptima will serve approximately 27 percent of Orange County’s population. The interdependency between CalOptima, physicians, and hospitals that will be required to serve this population well can only be achieved through collaboration that comes from shared responsibility and checks and balances on market-place leverage.

— Julie Puentes, Regional Vice President, Hospital Association of Southern California

 

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