County in a Race to Join Managed Health Care Era

Medicine: Doctors are sent to neighborhood clinics. But HMOs are poised to recruit most lucrative patients.

April 30, 1996 |JACK CHEEVERS | TIMES STAFF WRITER

Five months ago Dr. Ludlow Creary loaded his Range Rover with medical books, framed degrees and office supplies and headed for the new frontier in Los Angeles County health care.

Creary moved from his comfortable office at Martin Luther King Jr./Drew Medical Center to new quarters at a small, austere neighborhood clinic about five miles away in Imperial Heights. And Creary, a tidy, diminutive man of 65, wasn't alone.

He brought along most of the hospital's family medicine department, which he heads: five other doctors, a nutritionist, a psychologist, a health educator and 18 resident physicians.

"The future of medicine is going to be in this context," he said, glancing around a clinic office whose only adornment seems to be a wall calendar.

Creary and his colleagues are at the forefront of an ambitious drive to preserve the county's vast but financially wobbly public health system by expanding basic care at low-overhead neighborhood clinics, reducing the need for far costlier hospital care.

Plagued by chronic money shortages, the county is trying to catch up with private medical providers who have become far more cost conscious because of the managed care revolution. County officials hope to generate savings that will help keep their $2.3-billion-a-year system afloat as Washington and Sacramento cut health care funds for the poor.

Since the county medical network nearly collapsed during last year's budget crisis, a small exodus has taken place at county hospitals as physicians, nurses and clerks have been reassigned to outlying clinics.

Three dozen physicians from County-USC Medical Center in Boyle Heights--internists, pediatricians and surgeons--now work at three large clinics up to 10 miles away. They are assisted by 200 doctors in training from the hospital. At smaller Olive View-UCLA Medical Center in Sylmar, a handful of doctors and nurses were recently sent to clinics in Van Nuys and North Hollywood.

The physicians appear at clinics only a day or two a week in most cases. But county officials plan to shift more of their 800 full-time doctors to clinics and expand their hours there as part of the effort to reinvent the hospital-heavy system as a national exemplar of outpatient care.

"People are happy to go," said Dr. Bruce Chernof, assistant chief of ambulatory care at Olive View. "It makes it sound like we're sending them into the bush on a long journey. We're just asking them to take their good clinical skills to a different venue.

"This is about business not as usual. It's about moving forward as an organization. And I think people understand the importance of that."

County officials recently promised federal regulators that they will dramatically downsize the county's six hospitals, cutting about 900 of 2,600 beds over five years. The county also said it plans to boost its clinic capacity by 50%.

But county officials face a daunting series of stumbling blocks in their effort to propel the nation's second-biggest public health network into the managed care era.

For one, county health employees have little managed care experience at a time when private HMOs are poised to recruit the county's most lucrative patients--those insured under the state's Medi-Cal program.

For another, although federal officials signed off on a $364-million bailout package this week, the county faces a tough new round of negotiations with Washington over whether to raise Medicaid reimbursements for outpatient treatment--which county officials say is critical to the success of their reform plan.

It is also unclear how the switch to outpatient care fits in with county plans to turn most of its 39 neighborhood clinics over to private operators.

Six clinics were privatized last year, but county health chief Mark Finucane recently postponed plans to privatize an additional 22, saying he wants to "find some money" to pay private operators.

Research shows that care delivered by general practitioners and family physicians in community clinics saves money while improving medical access for the sick. One recent study indicated that basic medical care, also known as primary care, is particularly beneficial to the poor, resulting in improved eyesight, better control of high blood pressure, higher rates of childhood immunization and longer life expectancies.

Despite its extensive network of neighborhood clinics, the county for many years used them to deliver only limited care, such as vaccinations and treatment for sexually transmitted diseases.

People with other problems were referred to county hospitals or hospital-based specialty clinics, often beginning a tortuous journey that involved notoriously long waits and being bounced from office to office, often miles apart.

By adding doctors and nurses at community clinics, the county hopes to turn them into one-stop centers for primary care. Thus an infant could be immunized while his mother received a post-delivery checkup and his father got treatment for high blood pressure--all at the same time and location.

Before Creary's team arrived at the Imperial Heights clinic, it had one full-time physician, a pediatrician.

But Creary's doctors can help patients in a wide variety of ways, from prenatal exams to removing ingrown toenails to checking for uterine or rectal cancer.

Some patients are pleased with the new arrangement.

Ruby Bronson, who has diabetes, said that while she usually had to wait three hours for treatment at King, she is able to see a doctor at the Imperial Heights clinic in less than an hour.

"I like it over here better," said Bronson, 53, a nursing home worker. "Seems like it's run a little better. And it's not as crowded."

Olive View hospital sends a doctor and nurse to clinics in Van Nuys and North Hollywood each week to provide prenatal care to pregnant women.

Dr. Howard Judd, head of the hospital's obstetrics-gynecology department, said the setup brings medical services closer to patients, eliminating the need for long, time-consuming trips to Olive View, which the poor often must make by bus.

"Bullocks found out a long time ago it's wise to have one store in downtown Los Angeles," he said. "But the way you make your business grow is to put satellite stores all around Southern California. You go to where the people are, rather than make the people come to you."

Judd said the clinic physician sees women with normal pregnancies and also those thought to be at risk for problems like pregnancy-induced diabetes or high blood pressure.

Such "high-risk" women were formerly sent to the hospital, in part because all the doctors were there. But Judd said they can be cared for just as effectively in clinics, with little or no added risk.

County officials concede, however, that the system overall is ill-prepared to convert to primary care. For decades, it has been the health care equivalent of the old phone company, a bureaucratic monopoly with little incentive to improve service to its captive customers, the poor.

"L.A. County is way, way behind," said Dr. Patrick Dowling, chief of family medicine at Harbor-UCLA Medical Center in Torrance. "It's one of the reasons we're in such big trouble."

The county's sluggishness may come back to haunt it later this year when the state begins ordering more than 1 million county residents on Medi-Cal into managed care.

Private HMOs are organizing major recruitment drives to tap into this rich Medi-Cal "market," and many observers fear the county--which treats many Medi-Cal enrollees--may lose millions of dollars as HMOs lure away state-insured patients.

"The whole [county] system, from receptionists right up to specialists, needs to see itself more in terms of the patients and their satisfaction with the care," said Michael Cousineau, associate director of UCLA's Center for Health Policy Research.

Otherwise, he said, "I don't think patients will stay in the system."

Questions also remain about how the county will bankroll the conversion to primary care.

Although the federal government provided a one-year bailout, the county faces another round of negotiations over how to prevent its Medicaid reimbursements from plummeting after it slashes hospital bed capacity.

At stake is $823 million in future Medicaid money, and Finucane said it is unclear if Washington will go along with his plans.

Finucane and other county executives acknowledge that even a successful conversion to primary care is hardly a panacea for the county's health care woes.

With more than 2.6 million low-income residents without medical insurance, the county health system was drastically underfunded even before last year's budget cuts, they said.

But a strong emphasis on managed care is likely to help them stretch scarce tax dollars while improving access for the poor.

"We need to start racing flat-out in the managed care world and we haven't," Finucane said. "We've been loping, if that."