Deadly Irony: California’s New HMO Regulations Versus Single-Payer Health Care – Pacific Research Institute

Deadly Irony: California’s New HMO Regulations Versus Single-Payer Health Care

California has the unique distinction of being the only state that deploys two regulators of health plans: the Department of Managed Health Care (DMHC) as well as the Department of Insurance. Unsurprisingly, these departments busy themselves issuing ever-growing and more detailed regulations.

The DMHC has been developing these regulations since the legislature passed a law in 2002 to make access to medical care timelier and to dictate waiting times at Health Maintenance Organizations (HMOs). The new regulations will require that telephone calls be returned within 30 minutes, that health professionals be available 24/7, and that appointments with general practitioners take place within 10 days, or 15 days for specialists.

The new regulations are a result of years of negotiations between HMOs, the government, and self-styled “consumer advocates,” who lobby for laws and regulation friendly to trial lawyers. Indeed, Anthony Wright, executive director of Health Access California, the “statewide health care consumer advocacy coalition,” is actually listed on the DMHC’s press release as “sponsor of the original 2002 law.” (One might imagine the outrage if Pfizer or Eli Lilly were listed on a government press release as “sponsor” of a law concerning prescription drugs.)

“Californians are literally sick of having to wait weeks to see a doctor,” according to DMHC director Cindy Ehnes. It’s not clear, however, that waiting times for HMOs are really a big problem in California.

Last year, the recruiting firm Merritt Hawkins & Associates, which specializes in placing physicians, surveyed waiting times at 15 metropolitan areas nationwide. Although the waiting time for an appointment with a cardiologist was 22 days in San Diego, and 11 days in Los Angeles, this was close to the national average of 15 days reported in a national survey of 15 cities, conducted last year. For other specialists, California performs a little worse, but hardly disgracefully so.

The average wait for an OB/GYN in San Diego was 35 days versus 27.5 nationally. For family practice, the wait in Los Angeles averaged 59 days and 24 days in San Diego, versus a national average of 20.3 days. The worst city for getting an appointment with a family doctor was Boston, with an average wait of 63 days. Lest we forget, that’s the capital city of Massachusetts, where Mitt Romney legislated “universal” health care with a flourish of his gubernatorial pen in April 2006.

Lengthy waits for medical services, as doled out by government bureaucrats, are characteristic of so-called “universal” health care. In my home country of Canada, we don’t measure waiting times in days, but in months — more than four months, to be precise, according to The Fraser Institute’s 2009 annual survey of waiting lists for 12 specialties in each of Canada’s 10 provinces.

Only 11 percent of cardiologists in Los Angeles accepted Medicaid patients, and the highest accepting specialty was dermatologists: 58 percent. As John Goodman of the National Center for Policy Analysis has pointed out, other professional offices don’t have “waiting rooms,” but reception areas.

According to the California HealthCare Foundation, providers launched five lawsuits against the state, against roll-backs of Medi-Cal fees. According to research by Stephen Zuckerman of the Urban Institute, and colleagues, Medi-Cal’s fees for physicians grew only 2 percent in the years 2003 through 2008, while general inflation was 20 percent. And the Medi-Cal fees were only 56 percent of Medicare’s fees.

A 2001 study published by the California HealthCare Foundation concluded that only half of California’s physicians accepted Medi-Cal patients. A 2004 paper by Mathematica reported that 41 percent of adults on Medi-Cal delayed care because of cost or insurance problems, versus Californians with privately insurance, but with household income below 300 percent of the federal poverty level. A 2008 study by the Center for Studying Health System Change concluded that Medicaid payment rates nationwide were not only much lower than private rates, but state Medicaid programs also took longer to pay in every state.

DMHC boss Cindy Ehnes may be right that Californians are sick of waiting to see a doctor. Her department’s new rules may not fix the problem, but one thing is certain: Californians will be waiting a lot longer if the state and/or the feds impose government monopoly health care.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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