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Ailing Health Care System Faces Multiple Challenges

Ailing Health Care System Faces Multiple Challenges

Fiscal Troubles, Staffing Needs at Heart of Problem

BY MARION WEBB

Staff Writer

The symptoms caused by the Sept. 11 terrorist attacks have added an extra layer of pain to San Diego’s chronically ill health care industry, local experts agree.

And that spells bigger problems ahead for 2002.

The majority of health care respondents to the 12th Annual San Diego Business Journal/Deloitte & Touche Economic Outlook Survey predict worse times ahead in San Diego.

Asked to compare prospects for this year with 2001, 50 percent out of 10 respondents said the local health sector would be “worse.” Four respondents said it would be “about the same,” and only one person said it would be “better.”

“The Sept. 11 (attacks) have exposed how inadequately funded the public health infrastructure is,” said Dr. Rodger Lum, director of the San Diego County Health and Human Services Agency.

The U.S. House of Representatives last month approved a bill earmarking $2.9 billion to better prepare the nation for a potential bioterrorist attack.

In San Diego, the county Board of Supervisors recently allocated $8.75 million from the county’s share of a nationwide tobacco lawsuit settlement to do the same.

The bulk of that, some $3 million, will be used to upgrade the county’s emergency computer system, while $1.5 million will go toward anti-bioterrorism training and to buy detection equipment, with $1 million mitigating acute problems at the county’s trauma and emergency care systems.

In addition, $250,000 will fund the purchase of life-saving automated cardiac defibrillators, and $3 million will remain in reserve for unanticipated emergency needs.

On Jan. 15, supervisors plan to vote on allocating the remaining $6 million.

Local health care leaders are united in projecting that anti-bioterrorism efforts will rank among the top 2002 health issues.

Steven Escoboza, president and CEO of the Healthcare Association of San Diego and Imperial Counties, isn’t the only one saying that more money is needed to get anti-bioterrorism efforts under way.

Dr. James Dunford, director for emergency medical services for the city of San Diego, has been educating the public on a wide range of bioterrorist-related issues, from local security efforts to anthrax and Cipro, since Sept. 11.

The UCSD emergency room doctor applauds local hospitals on their efforts, which he said remain problematic given the many uncertainties they are faced with.

For one, no one can predict the weapon or agent of choice a bioterrorist may use.

This raises the difficult question of how much money hospitals should spend for an event that may or may not occur.

“Do you prepare for five, 50 or 5,000 casualties?” Dunford said.

Local health care providers, law enforcement, firefighters, and the city of San Diego have joined forces to fight the effects of terrorism.

The costly anti-bioterrorism campaign has led to a significant drain on funds originally set for other health initiatives.

Hemorrhaging Health Care System

Today, 60 percent of California’s hospitals, trauma and emergency units are operating in the red, Escoboza said.

Longstanding problems include inadequate reimbursements from government agencies and health plans, and overextended, underfunded, understaffed emergency rooms, he said.

The county’s emergency care system, weakened by fiscal troubles and faced with a critical shortage of nurses and specialists, lost $21.6 million in 2000, according to a report by the California Medical Association.

Gov. Gray Davis’ proposal to cut $30 million this year to beef up California’s trauma care system is likely to take away some $4.7 million in anticipated funding for San Diego.

Escoboza, however, hopes a legislative initiative to boost emergency care by raising the California sales tax will come to fruition this year.

Under the proposal, headed by the Public Safety Coalition, the state sales tax would be increased by one-quarter cent.

The projected $1 billion raised annually would provide relief for hospitals, fire departments and law enforcement. Escoboza predicted some $200 million would go toward emergency care units statewide.

Lum said he is also worried about the state of the industry.

Crisis Impacts Poor, Elderly

The huge state budget deficit for 2002 calls for major cutbacks in health care spending, squashing hopes for higher reimbursement rates from government agencies, such as the federal health program Medicare for the 39 million elderly and disabled and the state run health program Medi-Cal for the poor.

This is bad, because “Medicare and Medicaid are the bread and butter for hospital provision of care,” Escoboza said.

Exacerbating the problem for hospitals and doctor groups are the recent steps taken by managed care organizations.

Many health plans have made drastic cutbacks on drug coverage, services, and programs or withdrawn entirely from unprofitable markets.

HMOs said they had no alternatives given insufficient government payments and rising medical costs.

In 2002, employer-sponsored health coverage will see double-digit annual premium rate hikes.

Health Net, which covers 148,000 San Diegans, said it would raise premiums 19 to 25 percent.

Kaiser Permanente, which has 510,000 local members, will raise premiums by 11.6 percent.

As a result, fewer employers will be able to offer health benefits to their employees and more employees will drop coverage, because they won’t be able to afford to pay the higher premiums, experts said.

This could worsen San Diego’s already severe uninsured problem.

The elderly and disabled are also likely to be worse off this year, because managed Medicare is in crisis.

This year, for the first time, Medicare HMOs will charge enrollees a copayment for hospitalization. That is in addition to higher copayments for doctor visits and drugs.

Health plans say with medical costs running up to 20 percent higher than what they receive from the federal government, they need to transfer costs to members.

Two HMOs, Aetna Inc. and Blue Shield of California, decided they can’t be competitive and thus, dropped their Medicare programs in San Diego.

That leaves the elderly with a choice of Secure Horizons, Kaiser Permanente, Health Net, and Blue Cross of California , at least for now.

Many medical groups are also in bad shape. They decry that the capped payments from health plans aren’t sufficient to cover costs.

Among the most recent casualties were the Mercy Physicians Medical Group and Scripps Physicians. But the California Medical Association warns more medical groups will go out of business this year.

Mary Lewis, vice president for the Alliance Healthcare Foundation, which provides grants to local communities to improve health care for the underserved, also raised concerns.

Since Sept. 11, the foundation has been flooded with proposals to fund anti-bioterrorism activities in San Diego, she said.

The Alliance has a limited budget of $4 million to provide grants through the fiscal year ending July 2002, she said.

The money comes from a $100 million endowment. But their investments have been hurt by the economic downturn and the recession made matters worse for everyone, she said.

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