Orange County — by virtue of California’s early implementation of the nation’s expansive new healthcare reform law — will see its budget for providing health care to its indigent citizens jump from $86 million to $120 million in the coming year.

The influx of new money means the county Health Care Agency’s Medical Services Initiative (MSI) will be overhauled and by June will serve 15,000 to 20,000 more people than the 40,000 it does now, according to Ronald Norby, director of the MSI program.

All this is good news for patients who need care. But the revamped program, which will be called the Low Income Health Program, means added management responsibility and extensive monitoring, something Orange County has struggled to improve in recent years.

In the past, the MSI program has had problems with overuse of emergency rooms and with documentation requirements that community health advocates say resulted in care being denied to deserving patients.

The prevailing belief has been that undocumented immigrants, who are not eligible for MSI, were the primary culprits using emergency rooms unnecessarily.

But a study of the fiscal year ended June 2003 found that most patients met the MSI program’s criteria.

About 70 percent of the 800 patients were white, nearly two-thirds were men and the average age was 42. They were U.S. citizens, Orange County residents, 21 to 64 years old and indigent by the program’s definition.

These patients bounced among emergency rooms, seeking pain pills either for self-medication or abuse. Some health authorities believe the self-medication was largely to address untreated maladies, particularly involving mental disorders.

“It wasn’t illegal Mexicans using the program, as talk radio would have people believe,” said Michele Blair, now chief executive of the Orange County Medical Association. She was involved in the $100,000 study funded by the California Endowment in Los Angeles and the California Healthcare Foundation in Oakland.

Just 350 of those patients rang up an “astronomical” $17 million billed to the county, according to a 2004 study directed by a former UC Irvine physician, Dr. Gene Spiritus.

The county paid a discounted rate for those bills, but they demonstrated how quickly such funds can be drained. By state law, California counties are health providers of last resort and must serve these medical indigents.

At that time, county Health Care Agency officials said the MSI program cost about $48 million — $39 million from the state and $9 million from the county’s general fund.

By contrast, the estimate for the coming year shows the federal government paying $63 million, the state $41 million, and the county $16 million, according to Norby.

“It was the dark ages — you name the century,” said Nancy Rimshaw, an attorney with the Legal Aid Society of Orange County who works on consumer health cases.

Beginning around 2005, local and federal governments, health providers and consumer advocates joined, seeking to aggressively manage the publicly funded program. But the reform efforts created another set of problems.

Documentation Problems

In 2007, the Bush administration instituted a new requirement that patients in programs like MSI produce a birth certificate in order to receive care.

For those who have lost their jobs and homes, live in a car or a hideaway or have behavioral-health problems, proving citizenship can be difficult. A certified copy of a birth certificate can cost $40 and take weeks to arrive. Such a requirement can delay or prevent health care, say officials and patient advocates.

In July the MSI program stopped requiring a birth certificate for applications, officials say. Applicants are given up to a month to provide citizenship documentation, meanwhile receiving care for which they qualify.

In May, a county analysis showed at least 570 of 4,500 patients were denied services during a 15-month period due to a lack of citizenship or identification records. Consumer advocates say this practice can increase taxpayer costs when patients’ return with worsened ailments, which can lead to needless suffering and untimely death.

The MSI program even had to rely on a husband-and-wife team at Isaiah House, a home-based shelter in Santa Ana, to help obtain birth certificate documentation for the most difficult patients, who often are homeless or have behavioral problems.

“The special nightmare cases” were often sent his way, said Dwight Smith, Isaiah House director who secured donations for a $5,000 fund to pay for birth certificates. He said he repeatedly saw previously enrolled MSI patients required to again produce birth certificates, leading him to suspect it was “a denial of care scheme.”

A New Plan

To address the frequent patients, Orange County hired consultants to create a computer system allowing physicians at the region’s 26 hospital emergency rooms to check services already provided to MSI patients.

Called ER Connect, the system was fully operational by May 2007. In 2009, a county analysis showed how effective it could be, says Daniel Castillo, a medical manager hired in 2006 to administer MSI.

Emergency room use by the patients monitored by ER Connect was reduced by 52 percent, Castillo’s report asserted. There also was a substantial increase in patients being seen by primary care physicians, who serve as what MSI calls a “medical home.”

For the fiscal year ended June 2009, ER Connect saved $500,000, the study estimated.

Prior to such systems, “people had gotten savvy and were conning the system for pain medication,” says Isabel Becerra, director of the Coalition of Orange County Community Health Centers, whose facilities see many MSI patients.

“But there also were a lot of people who couldn’t get care and were self-diagnosing and self-medicating. Since, there has been a huge improvement in linking patients to services.”

Prior to his departure in May, Castillo said there wasn’t a follow-up study on ER Connect since 2009, citing a lack of funds.

In recent months, Blair of the medical association said many emergency rooms have stopped using ER Connect because doctors don’t like it or don’t have time. An example is Dr. David Chen, an emergency physician at Saddleback Memorial Medical Centers in Laguna Hills and San Clemente. Chen wrote in an email that he and his physician group never use ER Connect.

The medical home system also is crucial to good care and financial management, officials say. Early this year, the county received a grant from the Blue Shield of California Foundation in San Francisco to examine how the medical home concept was working as the MSI program evolves into the Low Income Program.

In September, an interim report by consultants reflected program successes with the 250 medical home primary care physicians, but it also raised questions about “recurrent issues” and “network concerns.”

The preliminary findings found limited policies and procedures, inconsistent medical records, insufficient patient-care documentation, and a lack of quality assurance records. There also were concerns about provider staffing and resources, along with the number of patients assigned per provider.

MSI officials say they are pleased with the system’s expanded physician network, with fewer emergency room visits compared with previous years and with increased reliance on the medical home program.

Last August, the Orange County Board of Supervisors approved in concept the federal pact for the Low Income Program.

As enrollment grows, county officials said, they must watch closely to ensure backlogs don’t affect patients. In the first half of this year, Castillo acknowledged, the MSI program was so successful at enrolling patients that county staff couldn’t keep up, producing waits as long as 90 days for application approvals.

While delighted by the new enrollment policy, Smith remains haunted by the case of an older man dying of cancer in 2008 while waiting for a Texas birth certificate. It arrived two weeks after he died.

Rex Dalton is a San Diego-based journalist who has worked for the San Diego Union-Tribune and the journal Nature. You can reach him directly at

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