COMMENTARY : Don’t Fault Fountain Valley Hospital in Indigent Care Fiasco : Health: Physicians and medical administrators upheld their commitment to poor patients but were shortchanged by government.

Yet another hospital intends to stop treating Medi-Cal patients. And the problem of how to provide health care for the poor threatens to become a crisis in Orange County.

Are doctors and hospitals to blame for failing to accept their fair share of medical and social responsibility? Is it shameful that Fountain Valley Regional Hospital and Medical Center intends to back out of its Medi-Cal contract?

No. On the contrary, Fountain Valley Regional’s administrators and owners have valiantly upheld their commitment to poor patients for a far longer time than most other Orange County hospitals. And their physicians have for years endured snowballing negative financial effects on their practices.

No, the doctors and hospitals backing out of Medi-Cal today should not be chastised. They should be lauded for what they have managed to keep doing for so long!

What is the problem then, and what are the solutions?

Simply put, the government is failing miserably in its attempts to administer health care.

Medi-Cal is now in the spotlight, but indigent care, the trauma system and even Medicare are other examples of the government’s failure in the area of health care. To understand this, look at the economics of treating a Medi-Cal patient.

While it is true that hospitals, pharmacies and laboratories may get as much as 50 cents to 70 cents per dollar of valid Medi-Cal charges, physicians never seem to get more than 35 cents or 40 cents on the dollar. And for more expensive items such as surgery, physicians are getting something like 20 cents to 25 cents per dollar of valid charges.

If the government picks up 25 cents of the charge, someone else has to make up the other 75 cents. Who are they kidding? The idea that the state of California actually pays for the health care of Medi-Cal beneficiaries is a fraud on the people of California!

A recent Times poll showed that 65% of those interviewed favor government-provided health insurance, indicating that most people don’t even know how the system actually works. Certainly Medi-Cal patients themselves do not know how slowly and poorly the state pays its bills.

Doctors are not even allowed to furnish information copies of their charges to Medi-Cal patients. And if they bill the patient (or perhaps a wealthy close relative) for the unpaid balance, the doctor is guilty of “Medi-Cal fraud,� according to our friends in Sacramento.

On top of this injustice, the state always pays late, if at all, citing budget freezes or arbitrarily declaring that the services were unnecessary.

So who really pays?

The answer is that the doctor kicks in all of his margin, maybe 20 cents or 30 cents per dollar of charges. When the state eventually pays 25 cents, that leaves about 50 cents per dollar of Medi-Cal charges that have to be covered by the margin the doctor makes on his insured patients.

A little mathematics shows that the doctor’s income goes to zero when one-third of his practice is composed of Medi-Cal and indigent patients. Since private insurers are refusing to allow further fee increases, the doctor’s only choice is somehow to restrict the number of Medi-Cal patients.

The numbers are slightly better, but the same math applies to hospitals. Their income goes to zero when Medi-Cal and indigent patients account for 50% or 60% of their valid charges. Further, since large full-service hospitals such as Fountain Valley must constantly buy new equipment, they really need to limit Medi-Cal and indigents to less than 40% if they are to survive for very long.

So it should be very clear that Fountain Valley is not guilty of shirking its responsibility to poor patients. On the contrary, Fountain Valley Regional should really be considered one of the last sailors to abandon a sinking ship.

They held on to their trauma center valiantly for years until it threatened their budget for new equipment and quality patient services. They met their obligation to poor patients for a far longer time than most other Orange County hospitals did, requiring sacrifices by owners and physicians alike.

The Medi-Cal ship is sinking and Fountain Valley must get off. Sure, its leaving will make the situation much worse, but at some point, one must decide how to serve the greater good--by going down with the ship or by casting off at the last moment.

We should not ask doctors and hospitals to “finally accept their fair share of medical and social responsibility,� as was done in a recent Times editorial. Both have been doing much more than their fair share at Fountain Valley Regional.

Instead, we must focus on the real problems in health care. In the short term, we need a huge increase in Medi-Cal and indigent funding, as much as 40% or 50%. And in the longer term, there is no reason why 95% employment should not mean 95% medically insured.

Not to face these tough and expensive issues head on is tantamount to turning our backs on the poor and infirm of Orange County.