Rural California Health Care System in ‘Dire’ Straits
Rural California faces a number of "pressing" health care issues -- including "serious shortages" of medical professionals, low government reimbursement rates, hospital closures and HMO pullouts -- leaving about 17% of the state's residents in a "very dire situation," the California Journal reports. Problems with the state's health care system are "magnified and intensified" in rural areas because of "remote locations, scattered populations and meager resources." Rural residents "tend to be older, poorer and often sicker" than people in the rest of the state and have "higher unemployment, lower incomes and less health care coverage." Studies also highlight a "big disparity" between urban and rural residents' health status, Stephen Lewis, executive director of the California State Rural Health Association, said. "The lower education levels, the sicker condition of many residents and the higher acuity of care needed by these populations collide head on with lack of services in rural areas," he said, adding, "So the big result is that the general health of rural residents is significantly lower than that of the urban population, and there is evidence that the gap is widening." In addition, many of California's rural hospitals face "closures and bankruptcies," with six facilities closing in the last four years and "many more" left "teetering on the edge of insolvency."
Health care experts attribute many of the rural hospitals' financial problems on the 1997 Balanced Budget Act, which "imposed" $60 billion in cuts on Medicare reimbursement rates over five years. "It threw many hospitals into a tailspin," Raymond Hino, CEO of Tehachapi Hospital in Kern County, said. In addition, the cuts had "other devastating effects," including the managed care exodus from rural areas. The pullout left many rural residents without an HMO, and according to Families USA, about 78% of rural seniors have "no access" to a Medicare+Choice plan, which often includes a prescription drug benefit not offered by traditional Medicare coverage. "HMOs are virtually non-existent for California residents living in rural areas," Sen. Jackie Speier (D-Hillsborough) said. While many states require managed care companies to provide equal coverage in urban and rural areas, Speier said, "In California, we allow HMOs to cherry-pick. It's redlining in a way. We don't allow it in banking or the financial industry, yet we tolerate it when it comes to health care." Bobby Pena, a spokesperson for the California Association of Health Plans, said that low Medicare reimbursement rates, a "limited pool" of members, "difficulty" recruiting providers and a lack of competition among hospitals and medical groups "kept many HMOs from being profitable or even feasible" in rural areas.
Meanwhile, the California Journal reports that "comprehensive legislative fixes are hard to come by." One rural health advocate said, "[W]e have a pretty rural state. But politically, you'd never know it," adding, "Just think about the votes. You can get all the rural votes in the state and still lose by a landslide. So who are you going to pay attention to?" State Sen. Wes Chesbro (D-Arcata) cited a "lack of knowledge and ... interest" among government officials as the "primary obstacle" to addressing rural health issues. Speier added, "I do think a legislative fix is difficult in some respects. It's unlikely to use a stick in California to get the results you want. Incentives may provide better results." State lawmakers have focused on "bite-sized solutions" -- such as increasing allocations for public assistance programs and requiring managed care companies to "speed up" payments to providers -- and have expanded state programs such as Healthy Families and the Song-Brown Physician Training Act, which trains and recruits physicians in medically underserved regions. During the past year, state lawmakers also have boosted funding for the state's network of rural clinics and other "safety net" providers and "secured long overdue increases" in the Medi-Cal physician reimbursement rate. Still, the California Journal reports that "much work remains to ward off a bleaker situation" (Rodriguez, California Journal, April 2001).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.