Something's Got to Give

Governor Brown's administration "has been moving at full speed" to implement California's participation in the Medicaid (Medi-Cal) expansion that is part of the Patient Protection and Affordable Care Act, aka "Obamacare." The Supreme Court ruled that a state could stand pat in the current Medicaid program without having to expand it under Obamacare, and there is much agonizing among the governors about which way their states should go. In our overwhelmingly social democratic state, there was never any hesitation about California's participation.

Whether or not one supports Obamacare, practical considerations suggest that Medi-Cal is headed for a train wreck. Under the existing program Medi-Cal's low reimbursement rates have resulted in doctors refusing to take new Medi-Cal patients, and long waiting times occur frequently. A few doctor's tales, per the Mercury News:

When Dr. Jerold Kaplan made a home visit last year to a man with a foot wound, he billed Medi-Cal -- the state's health care program for the poor and disabled -- what he thought was a modest $90.

His payment: $8.96.

The Berkeley wound surgeon received a bit more for his home visit to a quadriplegic last year: $13.44. [snip]

Medi-Cal pays [Los Gatos ear, nose, and throat Dr. William] Lewis $15 to $20 for an office visit, compared with the $50 he gets from Medicare and $60 to $70 from a private insurer. The Medi-Cal rates are so low, Lewis said, he doesn't bother billing for it because it's not worth the hassle. He just eats the cost.

Lewis typically declines to see new Medi-Cal patients unless it is a follow-up visit with someone he treated in a hospital emergency room.

"You cannot run a practice seeing Medi-Cal patients," he said. "You can't pay your employees and pay for your overhead and keep your doors open."

One patient's story:

When San Mateo mom Macrina Mota's daughter injured her foot playing soccer last year, the two spent 13 hours in an emergency room to treat a sprained foot.

"They're just overbooked; they're overloaded," Mota said.

Medi-Cal already covers 7.7 million Californians, and an estimated 1.5 million are projected to be added under Obamacare. Reimbursement rates are being cut, doctors are leaving the system, and over a million patients are being added. In economic terms demand is up, supply is down, and the normal mechanism for increasing supply, i.e., price, is being kept low by government fiat.

It's not going to be pretty.