Health

Saturday, Mar 16 2013 10:30 PM

LOIS HENRY: If it looks like a rat, smells like a rat ... it's a RAT!

By LOIS HENRY, Californian columnist lhenry@bakersfield.com

Something happened last week that made me question the very laws of physics.

I agreed with Kern County Supervisor Zack Scrivner.

Scrivner was the only supervisor to clearly lay out the problems associated with Managed Care Systems' administration of the county's main employee health care plan. He was also the only one to try and get past the mess and move the county forward.

I haven't agreed with Scrivner often -- well, ever. But I gotta give credit when it's due and in this case, Scrivner showed both brains and guts.

If you haven't been following the MCS drama, I'll try and give you a quick catch-up.

MCS was awarded the administrator contract back in 2009.

That means MCS tracks and pays claims, manages how services are used and negotiates rates with doctors, specialty providers such as radiologists and hospitals.

Here's the problem: MCS is owned by GEMCare, which is partly owned by a group of local doctors. GEMCare, in turn, is 50-percent owned by Dignity Health. Dignity owns or controls both Mercy hospitals and Bakersfield Memorial Hospital.

All of which means MCS is in a position to negotiate rates with itself and steer patients to its own doctors, among other things.

It's a clear conflict of interest.

That's not just me saying that.

The county's health care consultant, the Segal Group, considered one of the best health care consultants in the state, practically shouted it at last Tuesday's Board of Supervisors meeting.

Tom Morrison, with Segal, called the MCS contract "unprecedented," saying no other public clients Segal works with in the state or nation allow such an intertwined relationship between their health plan administrator and the providers the administrator is supposed to manage.

In fact, many public employee plans expressly prohibit such relationships, Morrison said, adding that there have even been recent cases that resulted in prosecutions.

Common sense says MCS has a conflict, the county's consultant says it has a conflict and a report done by Segal last year showed how that conflict has apparently played out.

Looking at just 18 months between Jan. 1, 2010, to June 30, 2011, Segal found the use of Dignity hospitals increased markedly.

The report also showed that Dignity/GEMCare got the lion's share of both in- and out-patient dollars from the county plan, 59 percent and 67 percent, respectively.

Supervisors know all this stuff. None of it is new. (In fact, they'd known about the Segal report for months, as they discussed in secret. It took as court order to get it made public. Sheesh.)

Yet at last Tuesday's meeting, when the County Administrator's Office recommended supervisors break up the services into different contracts and award them to separate companies, two supervisors in particular balked.

Mike Maggard and David Couch fussed and fretted that the MCS conflict was purely perception and the other companies recommended by the CAO were equally conflicted.

Couch pointed out that the county had taken over negotiating rates with hospitals from MCS. So, no conflict, no problemo.

No. Big problemo. If you have to take over services from your administrator, there's obviously something wrong with your administrator.

Besides that, I don't want county personnel who have no expertise in the complex world of hospital rate negotiation doing that kind of work. That could be a huge liability.

Then Maggard launched a completely cynical attempt to say Clinix, a company that proposes to do utilization management under contract to Foundation for Medical Care, which has ties to San Joaquin Community Hospital, is conflicted.

Deputy CAO Susan Wells tried to explain that there's a difference between a company working under contract, in which terms and payments are all exactly spelled out, and an ownership relationship where a company has a monetary interest in the providers it manages.

Maggard wouldn't hear it.

"With all due respect to Mrs. Wells," he said, with an obvious hint of righteous anger, "The issue isn't about ownership. It's perception. And a very, very thorough job has been done to exacerbate the perception that MCS has a conflict. It's not fair to minimize a conflict for someone else, whether or not they have an ownership interest."

Uh. Dude. It's not perception that MCS is owned by Dignity. That's a real actual fact. And it's a real actual fact that ownership creates a conflict of interest because the MCS/Dignity bottom line is directly affected by how MCS manages health care access for county patients.

Conversely, a contract tells Clinix it gets paid X amount of dollars per X number of patients. No matter which hospitals or doctors county patients visit, Clinix still gets X dollars for X patients. Clinix has no monetary incentive to influence where patients go.

Ergo, no conflict.

It was flat-out painful to watch two smart guys like Maggard and Couch making such ludicrous arguments in favor of MCS. (I gotta wonder what their views would be without political pressure, not to mention campaign donations, from GEMCare and affiliates. Hmmm?)

Meanwhile, Supervisors Mick Gleason and Leticia Perez got bogged down in questions over what is a conflict of interest, what isn't and whether MCS employees could be assumed by a new contractor.

They were drowning in piffle.

Scrivner was the only one who cut it down to the quick.

He had the guts to say out loud that, yes, MCS has a conflict and, no, the county shouldn't be a party to that.

And if there was any heartburn, real or imagined, over the Clinix/Foundation relationship, he said, the county should simply contract directly with Clinix.

Fine. Done.

Not done. His attempted solution went nowhere and eventually got morphed into a motion to bring all this nonsenses back on April 16.

This is simple. Or it should be. Scrivner has it right this time.

Get rid of the conflict and move forward.

Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays. Comment at http://www.bakersfield.com, call her at 395-7373 or e-mail lhenry@bakersfield.com

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