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California's State of Emergency

Elyas Bakhtiari, for HealthLeaders Media, January 29, 2009

In many ways California is nothing like the rest of the nation. Its massive economy, changing demographics, and unique healthcare environment make it difficult to draw comparisons if you're, say, a physician practicing in rural Missouri.

So when the rest of the country reads about California emergency room doctors filing a class-action lawsuit against the state over low reimbursements and a failing safety net, it is tempting to dismiss it as an isolated problem. After all, California ranks last in emergency departments per capita, according to a report card from the American College of Emergency Physicians, and has one of the worst emergency care networks in the United States.

But the underlying challenges that prompted the lawsuit are not unique to the state by any means, and it may be better to think of California as a bellwether than an anomaly.

The problem boils down to reimbursement. California has some of the lowest Medicaid reimbursement rates in the nation, and in 2007 alone emergency physicians subsidized more than $100 million in services to Medi-Cal patients because of payment disparities.

Last year, physician groups stopped a proposed 10% reduction in reimbursement levels (sound familiar?), but state officials have proposed another $1.1 billion in Medi-Cal cuts as an attempt to balance the budget.

The consequence of years of financial struggles has been the closure of more than 55 emergency rooms during the last 10 years. And as specialists increasingly opt out of call coverage assignments, and patients continue to use the emergency room for nonemergency treatment, those that remain open are backed up and overworked.

These problems may be magnified in California, but they are familiar to emergency physicians everywhere. And they will only get worse.

"The state's record high unemployment rates, reduced rates of insured patients, and the challenges of the overall economy are only exacerbating this situation," said Steve Maron, MD, president of Valley Emergency Physicians Medical Group, one of the practices represented in the suit, in a Business Wire article. "With access to primary care shrinking, Medi-Cal patients increasingly must turn to emergency departments for care, further straining the system."

So in a desperate attempt to find a solution, the state's physicians have turned to a lawsuit. It's difficult to see how this will accomplish anything, other than prodding California to shift some funds around to fuel a broken system. Perhaps its real value is simply as an indicator of the severity of the problem.

In the short term, Medi-Cal needs funding, and the lawsuit can't correct for a budget shortfall. There may be a glimmer of hope in the federal stimulus package, which promises $87 billion to help states share Medicaid costs, currently making its way through Congress.

But as my colleague Philip Betbeze points out, that is nothing more than a Band-Aid on a gaping wound. What emergency physicians in California—and across the country—really need is a fully-funded physician reimbursement system, a primary care network that keeps patients out of EDs, and a solution to the growing number of uninsured patients.

Those are elusive goals in normal times, and all the more difficult in a recession. So in the meantime, we're left with Band-Aids and lawsuits, neither of which addresses the real problems.


Elyas Bakhtiari is a managing editor with HealthLeaders Media. He can be reached at ebakhtiari@healthleadersmedia.com.
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