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HOME > ABOUT > PRESS > IS OUR HEALTH CARE IN CRISIS?
Article published - June 12, 2008
Credit: PT REYES LIGHT
Is our heath care in crisis?
By Jacoba Charles
Looming cuts in insurance payments could jeopardize health care service providers in West Marin who are already struggling to stay afloat. The two largest setbacks are proposed reductions in payments and coverage provided through Medi-Cal and Medicare, which will be voted on later this summer.
“This is a serious problem for us and for the community,” said Amy Schliftman of West Marin Physical Therapy in Point Reyes Station. “There’s going to be real chaos if this goes through.”
Simultaneously, the increasing cost of driving and an aging population make neighborhood services more desirable than ever. Deliveries of supplies now include gas surcharges of up to $50.
As these things accumulate, local health care providers say their income is actually declining. Another local provider, Molly Bourne, was driven out of the area earlier this year by increasingly untenable finances. Zsuzsanna Biran, who owns the West Marin Pharmacy in Point Reyes Station, says she has not made enough money to pay herself in over a year.
“I am not going out of business,” Biran said with some defiance. “But this is a hardship, definitely. The cost is going up, but the returns are going down.”
Medi-Cal and the budget
A raft of reductions to health care services have been proposed by Governor Schwarzenegger as solutions for California’s current budget crisis are now up for approval by the California State Legislature.
The California Department of Health Services has already secured a $1 billion loan that will be used to pay providers while the legislature debates the proposal.
“We made a very painful and difficult decision to reduce programs that we are allowed to,” said Norman Williams, deputy director of the California Department of Health Care Services. “California generally has one of the most comprehensive benefit packages in the entire country, but in light of the budget deficit some of those are being rolled back.”
The proposed cuts include a 10 percent cut in payments to most providers; a 10 percent cut to state grants, such as the one that helps sustain the Coastal Health Alliance; a reduction in the people who are eligible for Medi-Cal coverage; decreasing optional benefits; and a reduction of coverage for both undocumented immigrants and documented immigrants who have arrived within the last five years.
Among the optional benefits that will be eliminated under the proposal are chiropractic care, acupuncture, audiology, optometry, podiatry, speech therapy and physical therapy.
Documented immigrants will receive the limited benefits that undocumented immigrants now receive, which are basic emergency services and prenatal care, but not full-scope Medi-Cal, said Williams.
The Coastal Health Alliance will escape the 10 percent reduction in payments that are going to affect the West Marin Pharmacy and other local, privately owned medical businesses.
“Pharmacy margins are very, very small already,” said Biran, who fills prescriptions for several thousand people from Stinson Beach to Marshall, as well as for vacationers. “When we fill a prescription under an insurance contract, we don’t get to set the price.”
Roughly one third of her business comes from Medi-Cal patients, Biran said. Already, there are many prescriptions for which she is only paid $1.05 for the medicine, yet she calculates that filling one prescription
has an actual cost of $18, including overhead.
“It’s kind of an insult,” Biran said. “I went to school for five years. I make sure there are no drug interactions. I offer counsel. And a latte costs more than that.”
Medicare caps and cuts
Rehabilitation services may also face substantial cuts through reductions in Medicare insurance coverage.
Congress will hold a critical vote by the end of the month deciding whether or not to limit the number of sessions for physical, occupational and speech therapies that Medicare would pay for.
Rather than creating a law, the upcoming vote would repeal a unilateral cap that was authorized by Congress in 1997 but has been postponed for over a decade.
If the proposed Medicare Access to Rehabilitation Services Act fails, the strict limits might finally be enforced later this summer. Patients could face delayed care, reduced treatment, reduced choice of provider and increased out-of-pocket costs.
Right now, a more flexible limit is in place that allows reasonable exceptions for certain complicated conditions and diagnoses such as joint replacements, rotator cuff repairs, Parkinson’s disease and multiple sclerosis.
Those exceptions would be repealed, imposing a strict $1,810 per year—or roughly 13 session—limit to care, even for patients in need of long-term treatment.
Schliftman says that Medicare covers roughly half her clients, and many of them have already come in for 13 visits this year.
“If the proposed caps were in place, almost 30 percent of my Medicare clients would have to stop seeing me, or pay out of pocket—and we’re only in June,” she said.
Simultaneously, providers are going to be paid 10.7 percent less for their services by the insurance.
“Not only will fewer visits be allowed, there will be less money per visit,” Schliftman said.
Hassles and solutions
Other recent financial hits for local health services include reductions to the amount of visitors patients are allowed for Workers’ Comp benefits, as well as new limits to how many visits can be billed to private insurance companies such as Blue Shield and Blue Cross, and how much they will pay.
“I like to spend 45 minutes with a patient,” Schliftman said. “Blue Shield will pay $33 for a 15-minute period that I charge $45 for, but now they will only pay $26 for the second 15 minutes, $13 for the third, and they won’t cover anything beyond that.”
Then there is time. Because requirements are constantly changing, simply staying on top of the regulations eats up a huge portion of health care providers’ workday.
Every year, more paperwork is required, payments are lower and insurance companies try harder to wiggle out of paying providers, Schliftman said.
“It’s an ethical dilemma for medical providers,” said Suzanne Speh of Inverness, who has become a local health care advocate. “They are here to serve people, and they want to heal regardless of people’s ability to pay, so they have to contract with insurance providers.”
Once they are under contract, she continued, the service providers have no input and are subject to the rules imposed by the insurance companies.
“Only in this business do they decide what we get paid,” Biran said.
As a result of the slow, ongoing squeeze from so many different directions, Biran and Schliftman are transforming into activists as well as health service providers.
“We as a community need to figure out a way to keep these services here,” said Schliftman. “It’s all about sustainability.”
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