Doctor or Money Shortage in California?

An LA Times article titled “California doesn’t have enough doctors. To recruit them, the state is paying off medical school debt” describes a program where the State of California will pay off student debts using Proposition 56 tobacco tax revenue (1). California’s program is aimed at increasing the number of doctors who see Medi-Cal patients which has not kept pace with the rapid expansion of the state’s healthcare program for the poor, which now covers 1 in 3 residents in the state. The trends of decreasing doctors who accept Medi-Cal along with the increasing number of Medi-Cal patients led healthcare, education and business leaders to form the California Future Health Workforce Commission (CFHWC) in 2017 to study the state’s impending healthcare crisis (2). The CFHWC task force ultimately proposed a $3-billion plan over the next 10 years including $120 million for loan forgiveness incentives that’s meant to ensure physicians and dentists take on Medi-Cal patients. Another component of the program would allow nurse practitioners to practice independently from physicians.

The program is telling of both education and reimbursement in California. The CFHWC task force states that California is experiencing a shortage of doctors (3). This is not true. It is true that the graduation of doctors has not kept pace with the expanding California population. The national average of medical school students per 100,000 people is 30.3; California has 18.4 students per 100,000 (1,3). That’s the third-lowest rate among the 45 states that have at least one medical school. California has made relatively few investments in increasing enrollment at medical schools in the state. The only new public medical school to open in California in the last four decades is at UC Riverside and class size has only slightly expanded in the other schools (1,3). At the same time, more than one-third of the state’s doctors and nurse practitioners are reaching retirement age (1).

More than 60% of California’s students who attended medical school in 2017 left the state for their residency, according to the commission’s report. Most doctors settle near their residencies and California must expand the number of residency positions offered according to the CFHWC task force (1,3). They added that the state has historically underfunded those programs (1,3).

Despite these deficiencies, California does not have a shortage of doctors compared to other states (Table 1).

Table 1. Number of physicians per 100,000 population (Phys/10⁵ Pop) by state (2016 data, 4).

In 2016 California ranked nineteenth of the fifty states in numbers of physicians per 100,000 population (4). In addition, it ranked 22^nd in active primary care physicians (4).

What the CFHWC task force really means (and says intermittently) is that the number of doctors willing to accept Medi-Cal payment is low. The reason for this is pretty simple, Medi-Cal reimbursement is abysmally small. For a routine office call (CPT code 99213) Medi-Cal reimburses $24.00 (5). This office code is for about 15 minutes of patient contact and must include: 1. an expanded problem focused history, 2. an expanded problem focused examination, and 3. medical decision making of low complexity. This might be difficult to accomplish in 15 minutes. Documentation and billing would require at least 5 minutes more if the physician is a lightning fast typist. In contrast, Medicare pays $77.72 and Arizona Health Care Cost Containment System (AHCCCS) Administration (Arizona’s Medicaid) pays $51.42. Income generated from a busy practice seeing only Medi-Cal patients at $24.00 per office visit would mean $72/hour, about $500/day (7 hours/day), $2500 per week ($500/day X 5 days a week) or about $120,000/year (48 weeks). Although office overhead (payroll, rent, vendors, information technology, insurance, office equipment, etc.) varies widely, in 2002 the average general internist’s office overhead was about $250,000 (6). Expenses have not likely decreased in the last 16 years meaning that under the very best of circumstances, a physician seeing only Medi-Cal patients would lose $130,000/year serving California’s poor.

Medi-Cal has seemed to attempt to place the financial burden of caring for the poor on physicians and nurse practitioners rather than solving the problem of low reimbursement. Recent residency graduates who agree to have their debt relieved by California in exchange for seeing Medi-Cal patients may find their debt increasing under California’s proposal. Cuts could be made in other areas (hospital costs, drugs, etc.) but ultimately it seems that adequate reimbursement will be necessary to solve the impending “healthcare crisis”.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Gutierrez M. California doesn’t have enough doctors. To recruit them, the state is paying off medical school debt. LA Times. July 16, 2019. Available at: https://www.latimes.com/politics/la-pol-ca-california-doctor-shortage-medical-debt-20190716-story.html (accessed 7/19/19).
2. Gutierrez M. $3 billion is needed to address California’s doctor shortage, task force says. LA Times. February 5, 2019. Available at: https://www.latimes.com/politics/la-pol-ca-california-future-health-workforce-commission-doctor-shortage-20190205-story.html (accessed 7/19/19).
3. Mijic V. Meeting the demand for health: fact sheet on California’s looming workforce crisis. California Future Health Workforce Commission. February 4, 2019. Available at: https://futurehealthworkforce.org/2019/02/04/ca-looming-workforce-crisis/ (accessed 7/19/19).
4. American Association of Medical Colleges. 2017 State Physician Workforce Data Report. Available at: https://store.aamc.org/downloadable/download/sample/sample_id/30/ (accessed 7/19/19).
5. Department of Healthcare Services Medi-Cal. Medi-Cal rates as of 07/15/2019 (codes 94799 thru 99600). Available at: https://files.medi-cal.ca.gov/pubsdoco/rates/rates_information.asp?num=22&first=94799&last=99600 (accessed 7/19/19).
6. Weiss GG. Expense survey: what it costs to practice today. Med Econ. 2002 Dec 9;79(23):36-8, 41. [PubMed]

Cite as: Robbins RA. Doctor of money shortage in California? Southwest J Pulm Crit Care. 2019;19(1):15-7. doi: https://doi.org/10.13175/swjpcc050-19 PDF

Medi-Cal Blamed for Poor Care in Lawsuit

Several sources are reporting a lawsuit filed in California alleging poor care in the state’s Medicaid program, Medi-Cal (1). The suit alleges that Medi-Cal failed to pay doctors enough to provide proper care. The suit was filed by five Latino residents on behalf of California’s 13 million lower-income residents, more than half of them Latinos. The suit alleges that "…California has created a separate and unequal system of health care, one for the insurance program with the largest proportion of Latinos (Medi-Cal), and one for the other principal insurance plans, whose recipients are disproportionately white.”

The state budget includes $107 billion in state and federal funding for Medi-Cal this year, but the spending is not enough to restore reimbursement cuts made during the Great Recession of 2008. A proposal in the U.S. Senate to repeal the Affordable Health Care law (ACA, Obamacare) could drastically reduce funding for Medicare and the individuals who can access it.

Thomas Saenz, an attorney with the Mexican American Legal Defense and Educational Fund who filed the lawsuit, said he believes it is the first time the civil rights approach has been tried in California. According to Saenz this legal approach is possible because California is one of the few states to specifically prohibit discriminatory effects in state programs.

Other states in the Southwest also have disproportionately large Hispanic populations in their Medicaid programs (Table 1).

Table 1. Percent Caucasian and Hispanic total population/Medicare population by State (2,3).

Reimbursement does appear disproportionately low in California which ranked 48th in the nation in 2015 in how much it paid hospitals, doctors and other healthcare providers for treating Medi-Cal patients, according to the Kaiser Family Foundation (4). In the Southwest the state with the highest reimbursement was Nevada (5-10). California reimbursement averaged only 47% of Nevada reimbursement for the procedures listed (Table 2).

Table 2. Medicare reimbursement for common procedures by state (4-9).

The reason for the wide differences in reimbursement rates is unclear but is likely historical dating back to cost containment programs from the 1980’s and 90’s (11). The differences do not appear to be explained by differing costs of living. None of the procedure reimbursements correlated with the cost of living in the largest city in each state (Phoenix, Los Angeles, Denver, Albuquerque, Honolulu, and Las Vegas, p>0.1, all comparisons).

The chances of the lawsuit’s success are unclear since there is no precedent. However, it seems likely that if the suit is successful, more suits will be filed since California Medi-Cal’s situation of disproportionately providing care to minorities is not unique.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Thompson D. Latino plaintiffs sue California alleging poor health care. Associated Press. July 12, 2017. Available at: http://abcnews.go.com/Health/wireStory/latino-plaintiffs-sue-california-alleging-poor-health-care-48592841 (accessed 7/13/17).
2. Kaiser Family Foundation. Population distribution by race/ethnicity. 2015. Available at: http://www.kff.org/other/state-indicator/distribution-by-raceethnicity/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (accessed 7/13/17).
3. Kaiser Family Foundation. Distribution of the nonelderly with Medicaid by race/ethnicity. 2015. Available at: http://www.kff.org/medicaid/state-indicator/distribution-by-raceethnicity-4/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (accessed 7/13/17).
4. Dickson V. Low Medi-Cal payments could weaken expanded coverage for undocumented children. Modern Healthcare. June 17, 2015. Available at: http://www.modernhealthcare.com/article/20150617/NEWS/150619908 (accessed 7/13/17).
5. California Department of Health Care Services Medi-Cal. Medi-Cal Rates. June 15, 2017. Available at: https://files.medi-cal.ca.gov/pubsdoco/rates/rateshome.asp (accessed 7/13/17).
6. Arizona Health Cost Containment System. Physician fee schedules. 2017. Available at: https://www.azahcccs.gov/PlansProviders/RatesAndBilling/FFS/Physicianrates/ (accessed 7/13/17).
7. Colorado Department of Health Care Policy and Financing. Provider rates & fee schedule. June 2017. Available at: https://www.colorado.gov/pacific/hcpf/provider-rates-fee-schedule (accessed 7/13/17).
8. Quest Hawai’i. Medicaid fee schedule. 2013. Available at: http://www.med-quest.us/ (accessed 7/13/17).
9. Nevada Division of Health Care Financing and Policy. Fee schedules. Available at: http://dhcfp.nv.gov/Resources/Rates/FeeSchedules/ (accessed 7/13/17).
10. New Mexico Human Services Department. New Mexico Medicaid fee for service CPT code fee schedule. 2017. Available at: http://www.hsd.state.nm.us/uploads/FileLinks/e7cfb008157f422597cccdc11d2034f0/7.17_CPT_Codes__2_.pdf (accessed 7/13/17).
11. Tatar M, Paradise J, Grafield R. Medi-Cal managed care: an overview and key issues. Kaiser Family Foundation. Mar 02, 2016. Available at: http://www.kff.org/report-section/medi-cal-managed-care-an-overview-and-key-issues-issue-brief/ (accessed 7/13/17).

Cite as: Robbins RA. Medi-Cal blamed for poor care in lawsuit. Southwest J Pulm Crit Care. 2017;15(1):42-4. doi: https://doi.org/10.13175/swjpcc091-17 PDF