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Garthwaite has a few salves in his medicine bag to improve the bottom line without further meddling with care. The first addresses what’s called the patient mix. The government pays hospitals a set rate for services for the disabled through Medicaid (known locally as Medi-Cal) and for the elderly through Medicare. The federal payouts for seniors can be as much as 50 percent higher than for those on Medicaid, and Garthwaite hopes to raise cash for the county by making the over-65 crowd a bigger part of the patient population. Right now just 4 percent of the county’s patients are on Medicare.
However, the morning session at Harbor-UCLA brought an unwelcome revelation. One of Garthwaite’s strategies is to “capture” coveted Medicare dollars available to care for senior citizens. But that morning he learned that only 6 percent of the population in the area served by Long Beach Hospital is age 65 and over. “That stopped me in my tracks,” Garthwaite said later. “It was a real ‘ah-ha’ moment. It was like, ‘Whoa.’ It almost defied my imagination. If those numbers are reflective of the county as a whole, it’s going to be real challenging.”
Another strategy is to persuade the feds to abandon their formula that pays big bucks for patients who wind up in the hospital but next to nothing for prevention and outpatient care. For example, the county receives nearly $6,000 per admission from the federal Medicare program for elderly patients with heart failure. All medications needed during the hospital stay are covered. But the reimbursement rate for a comprehensive outpatient visit that could treat and prevent heart failure is less than $200, and for the vast majority of the county’s Medicare patients, prescription drugs taken outside of a hospital stay are not covered at all.
The problem is that in the short-term, outpatient care is not cheaper because clients who are persuaded to see the doctor in an outpatient setting then become more likely to see the doctor more often, studies have shown. Indeed, when the county first began emphasizing outpatient clinics over hospital care back in 1995, many people erroneously believed that this tactic would save the county so much money it would solve the budget crisis. Though some money was saved, much of those savings went into covering the increase in costs as people got used to seeing their doctors on a regular basis.
In the long run, clinic-based care does cut costs because those whose health is being monitored are less likely to develop costly conditions down the road. In the meantime, though (and it could be a long meantime), the county has to come up with the money to pay for it. “It’s like climbing a mountain,” Garthwaite said. “Right now we’re on our way up the mountain, and it looks impossible. But if we can get up to the top, we’ll be doing okay.”
Garthwaite’s favorite example of the VA improvements is one he says has saved thousands of lives. Studies have shown that after a heart attack, patients should immediately take either aspirin, a beta-blocker or an ACE inhibitor. Even with that information in hand, the best-performing hospitals manage to provide the appropriate medication only about 70 percent of the time, according to an article published in the September 13, 2000, issue of the Journal of the American Medical Association. At VA hospitals, according to the article, the rate is 94 percent. “I can’t tell you whose lives I’ve saved,” Garthwaite said. “But I know that because of the way the VA did business at the end of the last seven or eight years versus the beginning, at minimum 5,000 people are alive who wouldn’t have been.”
What will the verdict be at the end of Garthwaite’s tenure in L.A. County? Will he be able to point to the remaking of the health-care system and say he saved lives? Or will critics continue to charge that reductions in services are killing patients? In response to an e-mail asking whether he anticipates losing his job as his old boss did at the VA, Garthwaite was circumspect. “Will try to keep it data-driven rather than personal, but will accumulate baggage for making decisions (or for not making decisions),” he wrote. “For me, no way to make everyone happy.”
Christine Pelisek contributed to this story.