Next health care headache: Shortage of doctors ( Here in CA and across the country) on….

The Supreme Court’s validation of President Barack Obama’s landmark health law sets off a scramble up and down California to find enough primary care doctors and other professionals to serve an estimated 3million newly insured patients by 2014.

California already rates below average in the number of doctors per capita.

But the state – rural and inland counties in particular – will face additional headwinds as health reform slashes the ranks of its 7 million uninsured.

California has an unusually large number of doctors heading into retirement years. It expects a much higher-than-average rise in the health-intensive 65-and-older population. And it has one of the lowest reimbursement rates in the country for Medi-Cal, the state’s primary program offering health coverage for the poor.

Especially for communities already struggling with doctor shortages, the court’s somewhat unexpected endorsement of the Affordable Care Act suddenly presents a steep challenge.

“The Affordable Care Act will add hundreds of thousands of people to the rolls of the insured. That’s good,” said Dr. G. Richard Olds, founding dean of the UC Riverside School of Medicine. “But where are the primary care physicians going to come from to serve that population?”

According to a 2009 study by the California HealthCare Foundation, only 16 of 58 California counties had sufficient primary care doctors as measured against standards set by the American Medical
Association. The Association of American Medical Colleges has warned the nation could reach a shortfall of nearly 100,000 doctors by 2020.

Many of California’s most acute shortages are in the Inland Empire and the San Joaquin Valley, where communities struggle to attract and retain doctors. They also have some of California’s highest uninsured rates – exceeding 30 percent of residents in some counties, according to a 2009 UCLA study.

That could mean the same counties already fighting doctor shortages could see big increases in the insured starting in 2014.

Asked if local providers in San Luis Obispo County were numerous enough to accommodate the new patients created by health reform, county health officer Dr. Penny Borenstein had a definitive answer: “No. Simply.”

“We may have the possibility of adding 10,000, 15,000, 25,000 people into the health care system who have not used it very much,” she said.

Lee Kemper, executive director of the County Medical Services Program, a consortium of 34 rural counties that are implementing the Medi-Cal expansion together, said a mixture of innovation and increased funding was key to meeting the demands of health reform – now a mere 18 months away.

“We’re going to have to get creative,” Kemper said on Friday. “Strike teams” of medical specialists from urban areas could be brought into rural hospitals and clinics on a set schedule, he said. And tele-health systems could be strengthened to allow far-away specialists to consult, and even treat patients, with an online connection.

Kemper added that Medi-Cal reimbursement rates for doctors in rural areas must be increased so practitioners have incentive to set up shop in the far corners of the state. Statewide, barely more than half of primary care doctors are willing to see new Medi-Cal patients.

James Hay, a family physician in Encinitas and president of the California Medical Association, is among those who decline Medi-Cal patients.

“In my office, we figure it probably costs us $50 to $55 to see any patient on average,” he said. “If Medi-Cal pays us $23 to see a medical patient for a routine office visit I would be spending $32 per visit to see that patient.”

In California, Hay said, that’s why much of Medi-Cal primary care is done in federally qualified clinics, which are paid a higher amount for patient care because they also have to cover certain tests and other costs.

Can those community clinics handle the new wave of Medi-Cal patients?

“Absolutely not,” Hay said. “I think there will be a huge access problem.”

The Affordable Care Act does provide some help on this front, sending $700 million to California so that Medi-Cal reimbursement rates rise to the level of Medicare payments for two years. But the health industry worries that the underlying problem won’t go away, and that both state and federal politicians will be tempted to cut Medicaid reimbursements even more.

Senate Health Committee chairman Ed Hernandez, D-West Covina, plans to make the health care workforce, which he said is inadequate, one of his top priorities. “What good is it in 2014,” when millions of uninsured Californians will gain coverage “when they don’t have access to providers?” he asked.

One of his key but controversial proposals will be legislation to expand scope-of-practice definitions for some health care providers such as nurse practitioners and physician assistants.

Janet Coffman, assistant professor of health policy at UC San Francisco, said California lags many states in this area because most residents live in urban areas where doctor shortages aren’t as much of a problem. Because of the Affordable Care Act, she said, “I would say scope of practice is on the radar screen.”

Hernandez, who said he is holding committee hearings on workforce issues, will also try to boost the number of medical students in the state and bring medical residency programs to underserved areas.

Even before the health law was passed in 2010, the shortage of primary care physicians in California catalyzed a far-flung campaign – by educators, doctors, government leaders – to train new doctors in the state and encourage them to practice in under-served regions, including the Inland Empire.

That drive led to plans for all-new medical schools at UC Riverside and UC Merced, with an emphasis on primary care. Plans called for eventually enrolling 400 students at each school, both of them aiming to coax graduates to stay in the region.

But the state budget crisis has delayed both projects. This fall, 11 students, all ethnic minority students from the Central Valley area, will be enrolled in a UC Merced program with ties to UC Davis and UCSF-Fresno. Pending accreditation approval, UC Riverside hopes to open in 2013 with an initial class of 50.

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California health insurers (Aetna-Anthem-Bl Shield) propose raising rates for small firms – worth reading…

Some California health insurers are proposing to raise small-business rates more than 10% next month, drawing scrutiny from state regulators. Aetna inc., which drew the ire of state insurance officials for a rate hike earlier this year, wants to increase premiums 10% on average, and as high as 24% for some employers.

Anthem Blue Cross the state’s largest for-profit insurer and a unit of WellPoint Inc., has proposed boosting rates 13%. Blue Shield of California is looking to charge some small employers up to 6% more.

Byron Tucker, a spokesman for the state Department of Insurance, said the agency is having discussions with the three companies about whether the proposed rate hikes are too high. Separately, the California Department of Managed Health Care said it is reviewing other proposed rate increases going into effect in July or August. But no matter what their decision is, neither agency has the power to deny increases. They can only urge the companies to cut rates and publicly criticize them if they don’t.

In April, insurance department officials objected to other small-business rate hikes as high as 21% by Aetna and called them “excessive.” But Aetna went ahead with the higher charges.

Aetna spokeswoman Anjie Coplin said its rates “are based on actuarially sound data and a reasonable projection of future cost.” The company also noted that some of its small-business customers will see a decrease in rates starting July 1.

Overall, about 3 million Californians get their health insurance through small businesses with fewer than 50 workers. But rising premiums and the recession have taken a toll. The percentage of California employers offering coverage has declined from 73% in 2009 to 63% last year, according to the California Healthcare Foundation.

California Insurance Commissioner Dave Jones is pushing for an initiative on the November ballot that would give him the authority to reject excessive rate increases for policies sold to individuals and small businesses. Insurers say the measure would give an elected official too much power and wouldn’t address the underlying costs driving up premiums.

In filings to regulators, insurers said the proposed increases are justified based on escalating medical expenses, in particular higher charges for hospital care and prescription drugs. They also cited slightly higher costs for new government-mandated benefits related to maternity and autism care.

Kaiser Permanente, the state’s largest nonprofit health plan, has proposed raising rates as much as 9% for certain small businesses. Joe Smith, vice president of small business for Kaiser, said his company isn’t immune to the industrywide pressures driving up medical costs, even with its coordinated approach of running its own hospitals and network of physicians.

“We still feel the same pressure on utilization, the aging population and new medical technology, which can drive increases in costs,” Smith said. “No small employers are happy. The market is still very tough.”

Tulsa Rib Company, a barbecue restaurant in Orange, has offered health benefits to its employees since 1983. But owners Steve and Liz Parker say they aren’t sure they can afford to do so much longer.

Liz Parker said she switched from Health Net Inc. to Kaiser Permanente in 2010 after her company’s premiums shot up more than 30% annually. She and her workers have been satisfied with Kaiser’s medical care, she said, but the insurer is raising her premiums 8% in August. That comes on top of higher costs for food and gasoline in their restaurant and catering business.

“We continue to be squeezed and squeezed and we can’t pass along all those costs to our customers,” she said.

The Parkers and some other small-business owners are hopeful a new online marketplace for health benefits set to launch in January 2014 will help them secure lower rates. Two years ago, the restaurant stopped paying all of the premiums for workers’ family members and boosted annual deductibles for individuals to $2,000 to reduce its costs.

“I hope the exchange will put my 50 people on a level playing field with companies that have 5,000 people,” Liz Parker said.

The California Health Benefit Exchange is designed to negotiate the best rates with insurers and to help consumers and small businesses purchase health plans using federal subsidies and tax credits.

Enrollment is set to begin in October 2013. The exchange board is scheduled to discuss its small-business program Tuesday in Sacramento.

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