As we endeavor to move beyond the massive health care system strains caused by the COVID-19 pandemic, a historic 30-year public-private partnership — known as CalOptima Health — faces its own challenges. Topping the list: Ensuring the stability of Orange County’s safety net, composed of privately owned clinics, community clinics, hospitals, and physicians, to guarantee that the most vulnerable populations can access the health care they rightfully deserve.
As founders who were there from its inception, the creation of the publicly funded health insurance plan stemmed from the fact that the county lacks a county hospital and does not manage any primary care or specialty care clinics. In an open, dynamic and unprecedented collaboration, county supervisors partnered with the provider community to build an organized system of care for low-income and underserved residents in the Medi-Cal program.
Once established, CalOptima succeeded in large part by maintaining that partnership, relying on continuous voluntary leadership from physicians, clinics and hospitals.
We should know – we were there from Day 1.
A subset of providers bears the burden of caring for low-income residents, so it is an ongoing challenge to ensure those providers can absorb the impacts of Medi-Cal, which is chronically underfunded. (The program underpays Orange County hospitals alone well over $500 million annually and typically doesn’t cover the cost of care for physicians.)
The pandemic ripped open a wide wound across that safety net, testing the health care community in unprecedented ways well beyond the billions in losses. It inflicted or worsened inflation, supply chain disruptions and, crucially, nursing and other workforce shortages, all from which providers have yet to recover.
As a result, the need has never been greater for CalOptima to reinvigorate its core partnership with the private health care community. For its part, CalOptima has provided temporary COVID-related rate increases. However, the pandemic period saw a striking erosion of any active collaboration, partnership or planning with the physicians and hospitals integral to managing care for almost one million Medi-Cal residents.
This decaying relationship recently prompted the medical and hospital associations to take an unusual step. They formally requested the CalOptima Board of Directors to appoint a special ad hoc committee to sit down, roll up sleeves and restart a concerted planning process to identify new initiatives and investments to preserve access to care within our local safety net.
A recent state audit underscored the urgent need to return to such a proven and foundational joint planning framework. It showed that CalOptima’s surplus had swelled to $1.2 billion — twice the amount considered prudent. The audit also recommended that CalOptima implement an annual planning process to identify needed investments to stabilize the safety net and guarantee the provision of high-quality patient care. In response to external pressure, however, CalOptima instead appears to be spending down its surplus at an alarming rate, including on real estate transactions and social service training programs. The failure to allocate these funds as intended is not only evident to the health care community and its beneficiaries but is also likely to displease federal authorities.
Yes, some of this is about paying more to physicians and hospitals treating Medi-Cal patients and prioritizing those who shoulder that burden. But it also includes partnering with those same providers to design and implement systemic, meaningful and impactful ways to eliminate barriers to care faced by Medi-Cal patients and the providers caring for them.
As founding stewards of CalOptima, we deeply understand the agency’s paramount mission of prioritizing measures that will stabilize and sustain the local health care safety net and preserve access to quality care. Clearly, CalOptima should immediately reestablish its longstanding practice of including providers at the policy-making table. Also, the process must be transparent and public when deciding how the significant CalOptima surplus should be reinvested over time.
Put another way: First, do no harm. Then, always remember that CalOptima’s impact on our local safety net impacts the care available for all Orange County residents and visitors — 24/7/365.
Dr. Peter G. Anderson, a CalOptima Board of Directors founding member, has over 41 years as an emergency medicine specialist. His education includes degrees from the University of Wisconsin at Madison and postgraduate training at Los Angeles County USC Hospital.
Mary Dewane is the founding CEO of CalOptima who served from 1993 to 2003. She was responsible for leading the design and development of the managed care program to ultimately serve the Medicaid population. Dewane holds a bachelor’s degree in political science and communications from the University of Wisconsin.
John Cochran, CalOptima Board of Directors founding member, led LAC-DHS, overseeing five hospitals. His career spans health care leadership roles, public policy, and health care issues. He holds a bachelor’s in political science from the University of Oregon, a master’s in governmental affairs, and completed Harvard’s health systems management program.
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