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Winter 2012 /2013 • Volume 1 • Number 1

Coastal Medicine The Official Magazine of the Santa Cruz County Medical Society

FEATURES Member Benefits CME Tracking Discounted Insurance House of Delegates Representation

10 Private Practice Strategies: Retaining Independence 18 Health Reform: Dr. Len Nichols 24 ACA: Community Leaders Weigh In

Health Information Technology Resources

30 Not Sure About the Law? Contact The CMA Legal Information Line

Investment Planning Resources


Legal Services/On-Call Library

2 Marsh/Seabury & Smith Insurance

Legislative Advocacy/MICRA

5 Message from the SCCMS President and Editorial Chair

Physician’s Confidential Line Practice Management Resources and Education Publications Referral Services (Membership Directory/Website) Reimbursement Helpline

6 Excellence In Health Care Award Dinner Dr. Michael Alexander to be Honored 7 Staff Report 8 Welcome New Members 13 CES (Center for Economic Services) 14 Member Benefits 22 Education Series

23 CPR (CMA Practice Resources) 32 CruzMed Foundation

And more...see details, page 14

33 Santa Cruz County Medical Reserve Corps 34 DocBookMD Case Study 35 Sutter Maternity & Surgery Center 36 NORCAL Mutual Insurance Company


PRESIDENT Jeannine Rodems, MD PRESIDENT-ELECT Jack R. Watson, MD PAST-PRESIDENT Donaldo Hernandez, MD SECRETARY Christopher O’Grady, MD TREASURER Brian Brunelli, MD BOARD MEMBERS Nicholas Abidi, MD, John Christensen, MD, W. Richard Hencke, MD, Lisa Hernandez, MD, Jennie Jet, MD Gordon Lee, MD, Juan Rodriguez, MD, Susan Schaefer, MD, Kim Schulz, MD, Rosalind Shorenstein, MD MEDICAL SOCIETY STAFF EXECUTIVE DIRECTOR Donna J. Odryna OFFICE MRG / MEMBERSHIP & MRC COORD. Mary Champlin BOOKKEEPER Christie Hicks MRC VOLUNTEER COORD. Paula Satariano COMMITTEE / PROJECT CHAIRS & REPS FINANCE Brian Brunelli, MD HEALTH SCIENCES MENTORSHIP (UCSC) Jack Watson, MD LEGISLATIVE OUTREACH Tim Allari, MD, Jack Watson, MD MEMBERSHIP To be announced MRAC Tobias Yeh, MD MEDICAL RESERVE CORPS W. Richard Hencke, MD NOMINATING Jeannine Rodems, MD NORCAP COUNCIL Rosalind Shorenstein, MD PHYSICIAN WELL-BEING John Gillette, MD and Martina Nicholson, MD PRACTICE MGRS NETWORK Mary Champlin QA, CONDUCT & ETHICS Robert Jones, MD and Michele Van Ooy, MD CMA HOUSE OF DELEGATES REPRESENTATIVES Nicholas Abidi, MD, John Christensen, MD Jimmy Chung, MD, Larry DeGhetaldi, MD Hannah Farquharson, MD, W. Richard Hencke, MD Gordon Lee, MD, Jeannine Rodems, MD Rosalind Shorenstein, MD, Jack R. Watson, MD COMMUNITY ENGAGEMENT / PARTNERS CMA Paul R. Phinney, MD, President CRUZMED FOUNDATION Joydip Bhattacharya, DO, President EMERGENCY MANGEMENT COUNCIL David McNutt, MD, Rep. EMERGENCY MEDICAL CARE COMMISSION Terry Lapid, MD, Rep. HEALTH IMPROVEMENT PARTNERSHIP Donna Odryna, Board MEDICAL RESERVE CORPS Jeff Terpstra, Chairman


SANTA CRUZ COUNTY MEDICAL SOCIETY COASTAL MEDICINE MAGAZINE EDITOR To be announced EDITORIAL COMMITTEE Jeannine Rodems, MD Donaldo Hernandez, MD, Donna Odryna MANAGING EDITOR Donna Odryna CONTRIBUTING WRITERS Donaldo Hernandez, MD Jodi Hicks, Nicole Lezin, James Noonan, Dan M. Purnell, Elizabeth Zima

COASTAL MEDICINE MAGAZINE is produced by The Santa Cruz County Medical Society OPINIONS expressed by authors are their own and not necessarily those of Coastal Medicine Magazine or SCCMS. Coastal Medicine reserves the right to edit all contributions for clarity and length, and to reject any material submitted in whole or in part. Acceptance of advertising in Coastal Medicine in no way constitutes approval or endorsement by SCCMS of products or services advertised. Coastal Medicine and SCCMS reserve the right to reject any advertising. SUGGESTIONS, story ideas, or completed stories written by current Santa Cruz County Medical Society Members are welcome and will be reviewed by the Editorial Committee. DIRECT all inquiries, submissions, and advertising to:

Coastal Medicine Magazine 1975 Soquel Drive, Suite 215 Santa Cruz, CA 95065 831-479-7226 Fax: 831-479-7223 MEDICAL SOCIETY OFFICE HOURS: Monday through Thursday 8:30 AM to 4:30 PM

A Message from the President & Editorial Chair

We would like to extend greetings to you on this the inaugural edition of Jeannine Rodems, MD is President of the SCCMS. She is in Family Medicine at the Los Gatos Center of the Palo Alto Medical Foundation and sees patients from Santa Cruz and San Jose.

Coastal Medicine, the newest publication of the Santa Cruz County Medical Society, (SCCMS). The world of health care has seen unprecedented changes that will continue in the years to come. Phenomenal advances in technology, tectonic shifts in healthcare policy, questionable vagaries in reimbursement models as well as new and innovative modes of sharing information will permanently alter our profession. Medical Society Leadership, in order to better serve our members, patients, communities and profession, recognized the need to evolve with the times as well. It has always been our tradition that the best way to address change is through clear dissemination of information and proactive advocacy. We intend to do all we can to be a positive force to help steer the constructive advancement of the profession of medicine, while at the same time guarding against those changes that would erode the special relationship between doctors and their patients. We hope that this medium will provide a source for both communication and education, and promote the physician perspective amongst our central coast medical community members. We also recognize that we as a group we hold a significant and unique place in improving the aggregate health of our communities. Coastal Medicine serves to inform our membership and the public about things important to physicians and their patients, while building a forum for the exchange of knowledge and information that would lead to a healthier Santa Cruz County and Monterey Bay Region. So we hope you find this publication informative and interesting and we welcome your contributions. Coastal Medicine will continue to develop despite social and professional resistance. We will strive to be nimble in our response to the needs of our members, patients and region and fair in the assessment of the challenges that stand before us.

Don Hernandez, MD is Past-President of the SCCMS and Editorial Committee Chair

Thank you,

He is a Hospitalist with the Palo Alto Medical Foundation, is Board Certified in Internal Medicine and sees patients in the hospital.



Join us as we recognize Dr. Alexander for his many years of service in our community! Time: 6:00 Cocktail Hour • 7:00 pm Dinner & Program Where: The Hollins House at Pasatiempo Cost: Members - No Charge • Guests & NonNon-Members - $50

Now taking reservations, RSVP by March 28th


Staff Report We are pleased to tell you about SCCMS 7.0, our latest upgrade in a series of key strategies that began nearly a year ago when the Santa Cruz County Medical Society (SCCMS), Board of Governors adopted its 2012-2015 Strategic Plan. Beginning in May 2012 we embarked on a journey that has resulted in several organizational upgrades. 1.0 2.0 3.0 4.0 5.0 6.0 7.0

New Website ClearVantage AMS Health Care Leadership Forum CruzMed Foundation, Inc. Medical Reserve Corps Office Move Coastal Medicine Magazine

Physician members can now update their member profile via the SCCMS website and have their CMA profile updated at the same time. They may also renew their membership and support CALPAC, CruzMed and/or CMA Foundations from a single point of entry. What makes this possible is ClearVantage AMS, a robust Association Management System that works seamlessly behind the scenes to provide new enhancements such as the new physician finder and Buyers Guide on the new website. This past Fall we rolled out the First Annual Healthcare Leadership Forum with Dr. Len Nichols, the keynote (see page 18). We continue to work collaboratively with our partners to support what we think are valuable programs and services. The Board of Governors for the SCCMS directed the formation of a 501(c)(3) non-profit, CruzMed Foundation, Inc. (CMF), the philanthropic arm of the Society. Led by President Dr. Joydip Bhattacharya, CMF will accomplish its mission to improve and preserve the health and well-being and safety of our communities and region, through healthcare focused community

efforts such as Physicians of Tomorrow Scholarship Fund, the Medical Reserve Corps and other collaborative programs like the UCSC MESA Project and the 5-21-0 public education campaign. In the midst of these upgrades, SCCMS took on increased leadership efforts for the Medical Reserve Corps due to budget cuts and staffing changes within the County. In partnership with the County Health Services Agency and the American Red Cross, we are working to improve the public health, emergency response and resiliency of our county, (for details see Since we weren’t busy enough, you may have noticed that we moved our offices to a neighboring suite which will reduce overhead long term. And finally, Coastal Medicine, which has been a year-long endeavor. Publishing a magazine is not for the faint of heart and we will make improvements with each publication. We are pleased to have the opportunity to offer Coastal Medicine Magazine to our community as a resource and vehicle for the exchange of ideas and knowledge. In this first issue, you will notice there is minimal advertising. This was intentional as we wanted to focus on developing the foundation. In future issues we will include Classifieds, Practice Management, and “In The News” sections, and focused advertising. We hope you enjoy the publication and find it to be a useful resource.

Donna J. Odryna Executive Director

Mary Champlin Office Mgr. /Member & MRC Coord.

Christie Hicks Bookkeeper

Paula Satariano MRC Contractor












Health Reform: Where We’ve Been, Are and Are Going by Nicole Lezin Len Nichols, PhD, Director of the Center for Health Policy Research and Ethics at George Mason University in Virginia, describes himself as an ex-economist — but one who really is a preacher at heart. “I was kidnapped on the way to seminary and forced to go to economics grad school,” he joked to an audience of local health care providers and policy wonks in early October. A graduate economics program, he observed, was familiar and in many ways comfortable turf for a would-be seminarian, complete with a God to worship (the god of efficiency) and even a liturgy of math and econometrics to provide comfort in times of stress. Dr. Nichols was in town to launch a Health Care Leadership Forum series in a talk jointly sponsored by the Santa Cruz County Medical Society and the Health Improvement Partnership (HIP) of Santa Cruz County. His lecture took place a few short weeks before the Presidential election. No matter what the political outcome, he stressed, the linkages between health reform and the health of our economy will require significant shifts in how we approach and finance health care delivery in this country — and significant political compromises to make these shifts a reality.

The Economic Backdrop for Health Reform “Our health system doesn’t operate in isolation,” Dr. Nichols said, pointing out the system’s connections to our economy and to our values as a society. Between 2000 and 2010, the cost of premiums for health care coverage has outpaced median family income growth, putting coverage out of reach for more individuals and families. At the same time, the share of Gross Domestic Product (GDP) that the federal government alone spends on Medicare and Medicaid is projected


to increase from 3% to 9% by 2035, tripling the share of GDP that is spent on healthcare over the next two decades. “I’ll tell you a secret,” Dr. Nichols said. “We can’t afford that.” Quoting figures from the Congressional Budget Office (CBO), Dr. Nichols presented a chart that he described as “The most important numbers in the health reform debate.” Why? The scale on the right of the chart, he explained, shows the projected debt held by the public, as a share of GDP. That’s what we owe each other, and the Chinese. The projections show that as soon as next year, if significant changes do not occur, we will begin a steady upward glide. On the left side of the scale — depicted by the line over the bar chart — is the amount we spend on interest on our national debt, as a percentage of GDP. This, Dr. Nichols explained, climbs to 3% of GDP and hovers there. “Most non-economists,” Dr. Nichols acknowledged, “don’t get too excited about percentages of GDP.” But we should, he added: even at 1% of GDP, the amounts involved would be enough to cover all of the uninsured. These payments “buy zero useful services,” he pointed out. And they persist because we can’t come up with a bipartisan agreement on balancing the budget.

Highlights from the 2012 Health Care Leadership Forum Len Nichols, PhD, Keynote Speaker In past crises, this was not the case. During and after World War II, Dr. Nichols said, the debt-to-GDP ratio almost tripled, but there was a consensus that we were facing an existential threat and simply had to borrow in order to build battleships and conduct the war — yet we still kept third-grade classrooms open and maintained other domestic investments. Gradually, those debts were paid off — and the pattern was repeated (though not quite as dramatically) several times, with bipartisan consensus each time to borrow when necessary and then pay off accumulated debts. This pattern held even during the OPEC “hiccup” when oil prices quadrupled. The jumps, Dr. Nichols explained, began under President Reagan in the early 1980s, dipped when reluctant agreement to balance the budget was reached between President Clinton and House Speaker Newt Gingrich in the 1990s, and accelerated significantly with President George W. Bush’s war spending and prescription drug benefit. The recession of 2008 caused another spike, and the fiscal stimulus borrowing added another 25%. “The sin is not in borrowing to do what we have to do,” Dr. Nichols said, summarizing the lessons of these historical trends. “The sin is in not having agreement to bring fiscal stress back under control — and there’s no way to do that unless you get health care costs under control.” (This observation drew a hearty “Amen!” from a member of the audience, and a smile to the preacher-turned-economist’s face.)

Although cost containment is imperative, Dr. Nichols said, the health care delivery system would not tolerate drastic cost containment on its own or as a first step. Indeed, he observed, 75% of hospitals already lose money on Medicare. Expanding coverage first is the way we make it possible for hospitals and health care systems to transform themselves. Dr. Nichols estimates that we have between 10 to 15 years to get our fiscal house in order. That’s the time frame in which he believes the Chinese — holders of much of our debt — will have transitioned to a more consumption-oriented economy. “When they’ve reached a point where they don’t need us,” Dr. Nichols warned his audience, “our interest rates will go up fast.” In case anyone had missed his point, he added, “We’ve got to do this.”


The Health Reform Debate Drawing chuckles from his Monterey Bay audience, Dr. Nichols observed that most of the people who support single-payer health care systems live near water. “That’s because they know they can get away fast if they have to,” he joked. More seriously, he pointed out the many voices and points of view on both sides of the health care debate — and how difficult it has become to have a rational discussion about the issues involved. In part, he observed, the heat and acrimony related to health care reform in general and the Affordable Care Act in particular stems from legitimate philosophical differences about the role of government and markets. Where different points of view have gone awry, he believes, is in the exploitation of these differences for fundraising purposes, appealing to each side’s base, and by fomenting politically useful fear (for example, of so-called death panels deciding elderly patients’ fates). Indeed, he pointed out, “Obamacare was a Republican idea before it became socialism.” Many of its key features, regulations for insurance companies, exchanges, the individual mandate, were endorsed by 18 Republican senators as recently as 1993. To Dr. Nichols, health reform is a signal that business as usual is over, because we can’t afford it. Two particularly obsolete features of the current health care business model are risk selection and fee-for-service incentives. “Don’t blame insurers for risk selection,” Dr. Nichols said, because they were delivering what we thought we wanted: keeping premiums as low as possible for the healthy. Unfortunately, that model required keeping the sick out, which makes the system function poorly for those who become ill and reach lifetime caps, cannot obtain insurance because of a pre-existing condition, or don’t have insurance in the first place when they do get sick. Fee-for-service incentives may have been a good idea a century ago, Dr. Nichols wryly observed, “when a doctor was as likely to hurt you as help you.” Instead of encouraging tests and a volume of procedures, Dr. Nichols said, we should be paying to get people healthy and keep them that way. The Affordable Care Act focuses on changing both aspects of the business model by changing and aligning incentives. Eventually, Dr. Nichols predicts, this will move


beyond incentive payments to doctors and hospitals to changing incentives for patients as well — such as charging higher premiums for smokers. Although health care reform offers potential, its critics, Dr. Nichols said, have legitimate points that are not always acknowledged. The theory that changing incentives will contain costs is not proven. Over time, the law will add to state fiscal burdens by increasing their share of spending to provide expanded Medicaid coverage. And it’s unclear what the spending trajectory is really going to be, with the ultimate risk borne by taxpayers. These are all potential obstacles, Dr. Nichols said, but the core problem is that our politics are broken.

No Easy Answers, But Significant Opportunities Dr. Nichols sees four ways to pull off a shift from the unsustainable cost trajectory we’re currently on. The first is to create a much healthier population, “eat more broccoli, do more sit-ups.” That’s possible and even necessary, Dr. Nichols said, but is not going to happen any time soon. The next two options are to lower the use of services — and their prices. Finally, we can improve quality. Most attention so far has focused on use — or, more accurately, inappropriate use of services in the form of unnecessary services, inefficient delivery, and missed opportunities for prevention. Excessive administrative costs are another target; most hospitals spend 20 cents on each dollar just to navigate the various insurance claims systems in order to get paid. In Dr. Nichols’ view, “We’re spending 20 to 30% more than we have to just so Aetna and Cigna and United Healthcare can compete to get a 1% advantage over their competitors. It’s stupid!” In the next 10 years, we have to reduce spending in the health care system by 30%. Some can come from reductions in home health, nursing homes, drugs and devices, and laboratory services. However, Dr. Nichols said, most will have to come out of hospital spending. “There’s no other way,” he concluded. A number of innovative approaches and models are being unleashed, but there are no magic bullets or panaceas.

Promising innovations include Accountable Care Organizations (ACOs), the shift towards medical homes, bundled payments, and various models for integrating care more productively. Dr. Nichols predicts that a hybrid combination of fee-for-service, with some payment-per-member-per-month (PMPM) feature to pay for those not covered, and shared savings if quality targets are met will become more common. President Obama had not been re-elected at the time Dr. Nichols gave his talk, but he noted that regardless of which party controlled the White House and Congress, the pressure to cut health care spending would be intense. Despite his earlier pessimism about how broken our political discourse has become, Dr. Nichols noted that the upcoming “fiscal cliff” (which will impose automatic spending cuts likely to plunge the country into another recession) had already led to bipartisan conversations behind closed doors, conversations between people who are “not your normal bedfellows,” Dr. Nichols said. “They know we’ve got to do this and come up with a plan, regardless of who wins, to get to the other side.” Dr. Nichols sees local communities — communities like Santa Cruz County — as the most promising options for resolving the types of differences that have made constructive problemsolving so difficult at the federal level. Communities where we live and work, he said, are “the only places where everyone can put down the politics and try to be honest and inclusive with each other.” At a local level, through partnerships like those build by the Santa Cruz County Medical Society and HIP, different players can come to the table and share data and strategies, recognizing (and acting upon) their mutual selfinterest.

The Lessons of History In addition to being an ex-economist and almost-preacher, Dr. Nichols is a history buff. As an economist, he said, he first viewed the recession in 2008 and President Obama’s first election as a time comparable to the Great Depression. He immersed himself in books about the Roosevelt administration, Dr. Nichols said, only to realize (four books later) that he had been wrong. “The time most like our own,” he concluded, “was the Civil War.”

through the Shenandoah Valley and conduct a protracted guerilla war against the Union forces. With 25,000 loyal men who would have followed him anywhere, to the death, Lee knew it was possible, but that it would take another several years — and that it would take too great a toll on his men and his country. He did not want to win that way; riding alone in his dress grays, he surrendered. His act finally stopped the war. Reaching another century back into our nation’s history, Dr. Nichols talked about the Constitutional Convention of 1787 — the four-month long convening of the Founding Fathers that ultimately led to the U.S. Constitution, based on an initial draft by James Madison. Throughout this period, there were contentious debates but not a single leak or contraband copy of the emerging document. In the end, 39 of the 55 delegates signed, although none could be described as completely satisfied. “They knew they would have to compromise to make it work,” Dr. Nichols said. “They listened to their opponents and took their good ideas. It’s been done before and can be done again. We just have to agree to do it.”


Start by contacting SCCMS at (831) 479-7226 or at

In April 1865, when General Lee left the city of Richmond with General Grant in pursuit, he was being urged by Jefferson Davis, the President of the Confederacy, to escape



The Affordable Care Act: Leaders Weigh In! By Daniel M. Purnell, Policy / Marketing Intern at the SCCMS

The whole country listened as Chief Justice John Roberts delivered one of the most historic US Supreme Court rulings in the last 50 years: the Patient Protection and Affordable Care Act (ACA) stands! And now as the Obama administration moves forward, for many American, an arguable more important question remains: “How will the law affect me and my family? Or, how will ObamaCare change health care in my community?” We went to some of the most important and influential leaders in health care in our county and invited them to share their views on this important subject.

Alan McKay is Executive Director at the Central California Alliance for Health (CCAH). It’s a publicly operated non-profit, regional health plan currently serving residents in the counties of Santa Cruz, Monterey and Merced. CCAH handles Medi-Cal claims and manages Healthy Kids, Healthy Families, Alliance Care IHSS, Alliance Care AIM and Medi-Cruz Advantage. AM: I think healthcare reform has started already with protections and insurance access i.e. 26-year olds with access to their parents’ coverage. There was an aggressive approach to expanding coverage


starting in January 2012 with a low-income health plan called Medi-Cruz Advantage. This is enabled under a federal agreement with CA and other states to begin coverage for low-income individuals who will be eligible for Medi-Cal in 2014. The goal is to enroll 2,000 adults with no children (the target population of the Medicaid expansion in 2014), in a health plan that will provide preventive care, chronic disease management and acute care needs. I think it’s a useful bridge to Medicaid coverage in 2014. The big event in 2013 is the federal offer to increase the Medicaid reimbursement to primary care physicians (PCP), up to Medicare levels. Since California is one of the lowest paying states in the nation for Medicaid, this will mean a significant increase to PCPs. Federally Qualified Health Centers (FQHC) and rural health centers are not eligible for this increase. There are already cost-based reimbursed. But PCPs in Santa Cruz County (SCC) who serve Medi-Cal patients, will see significant increases in their payments for at least 2 years. In 2014, there will be two prongs of federal health care reform: First is the Medicaid expansion, but as a voluntary choice. States thought that the requirement that states accept the Medicaid expansion was out of federal jurisdiction. Now states will have that option. The expansion is funded for 3 years at 100% federal

funding, tapering down to 90% by 2020. I think some states are reconsidering their intial hesitations to Medicade. For SCC, we estimate 5,600 residents will now be eligible for Medi-Cal based on phone surveys done by UCLA, then another 3,000 not yet enrolled. Emphasizing outreach and enrollment, an estimated 8,600 new MediCal recipients in SCC will be added to the 35,700 current population. It’s a significant increase in the number of people that will have medical coverage. Following the implementation of the Health Benefits Exchange (HBE), we estimate 11,000 will now be insured through the HBE. The income level for the HBE eligible is jut above Medi-Cal eligibility, 138-400 percent of the federal poverty level. Families of four earning $29,000-$88,000 will qualify, 60% of which will qualify for federal subsidies of the insurance costs. There will be more than 20,000 newly eligible patients due to federal healthcare reform in 2014. This expansion will be a great opportunity for the community. We need to communicate the value of health insurance coverage, both for the Medicaid-eligible and for those using the HBE. Our culture needs to value improved health and resolve health disparities. This can be accomplished by increasing the awareness of this expansion. In 2014 we should see more people with coverage but there are 21,000 undocumented Santa Cruz County residents who are not covered through reform — 8.2% of the population, compared to the California average of 7.8%. One question is does the community want to construct a system of care for this group. In summary, we have the low-income health plan, the rebasing of the Medicaid payment for primary care, and the increase of coverage in 2014. I think it opens several important issues.

are a real asset to us in the area of coverage expansion. With Silicon Valley in close proximity, we must utilize computer technology to streamline healthcare process, both for the provider and the member. Federal incentives for Electronic Health Records (EHR), adoption is already available and practices are coming on board. I think EHR is an important tool in the increased focus on cost management and quality. Adoption of EHR is already in use in medical organizations but is absent in the private practice environment, as it is seen as a larger commitment. The next issue is prioritizing cost management. Reform is going to occur in stages: coverage then the management of costs is the subject of dialogue both nationally and locally. Value purchasing, not just purchasing feefor-service, but looking at measurable outcomes and rewarding providers who can deliver them. The Accountable Care Organization (ACO) is very progressive. Our community could see physicians and hospitals working together effectively in ACOs. This is all dependent on getting good data reports on cost and quality. The Alliance is very committed to that resource and making it available to local doctors and hospitals. Our community has to improve our ability to work with the “medically needy” patients that drive so much of the cost. Advancements in comprehensive care management programs are going to evolve and the Alliance is certainly on that path right now. DMP: The “medically needy” people you mentioned, are many utilizing Medicare? AM: Medicare is a place where we see a lot of very high utilization. In our Medi-Cal population, we find 8% of our members account for 75% of our cost. There’s a significant correlation between mental health and substance abuse issues. We need to drive healthcare in the direction of meeting those needs and recognize that sometimes social and psychological issues surrounding

DMP: Can you give me a summary of the issues? The first issue is provider capacity. With 20,000 newly insured, that’s a lot of money entering the local health economy, because those people will now be covered with insurance premiums. The question is, ”are we organized in a way that can actually provide access to care?” We’ll need an efficient healthcare workforce. The county is working on the Patient Centered Medical Home model, one that leverages the care team and makes the best use of PCP resources.

Alan McKay serves the Board President for the Santa Cruz County Health Improvement Partnership

We have a strong and growing safety net in our county. FQHCs have strong roots in the community and


access and compliance go beyond our usual model of patient compliance. In our county, there will be an increased interest and awareness of non-medical determinants of health, including diet and nutrition, exercise, smoking, housing, education and environmental safety. We already understand these are things that affect health status. Our next step should be towards community development and mobilization. So that’s my final thought on the changes coming with health care reform on the horizon. It starts with coverage. Hopefully we’ll get that squared away and move onto looking at cost and come to an understanding that we can only address costs and quality to a certain degree through medical delivery. We have to move out into the community and discover the foundation of problems. DMP: That makes sense. A great way to address costs is make sure that people don’t need to go to the doctor, or perhaps not as often. AM: That would be the best way for a win both on the cost side and on quality of life. And as health professionals, that is our mission.

Audra Earle was unable to meet with us, she sent the following statement: If all aspects of the ACA are implemented, individuals in our community who are currently uninsured will have more access to care beginning in 2014. The ability to visit doctors, utilize hospital services, and obtain preventive healthcare services will have a dramatic impact in their overall well-being. We anticipate that our hospital and the physicians in our community will be providing essential health services for more patients as coverage expands.

In addition, expanded coverage will reduce the burden of uncompensated care on our hospital. We provide medically necessary emergency care for anyone who needs it, regardless of whether they have insurance or the ability to pay for services. Reducing uncompensated care will help ensure that we can continue to provide essential healthcare services for Santa Cruz County. Watsonville Community Hospital will do our part to improve the healthcare system by providing highquality care and the best possible experience for our patients. We will continue to strengthen the services we provide and look to develop more resources to support the evolving healthcare needs of our population.

Larry DeGhetaldi, MD is a board certified family practice physician. In addition to his role with PAMF and Sutter, he is a member of the California Medical Association (CMA), Board of Trustees, Large Group Forum Representative. We spoke with Dr. DeGhetaldi at his Santa Cruz office. Donna Odryna, Executive Director of the SCC Medical Society joined the discussion. LD: The biggest change is the Medi-Cal expansion. That’s the guts of health care reform, and how it differs from what Romney did in Massachusetts. I sit on the board of the CCAH (a.k.a. The Alliance), and their current mindset is shifting. How many people are going into Medi-Cal? Ten, fifteen, twenty thousand? It’s unclear. The first thoughts are: do we have the capacity for the Medicaid expansion? Who are the people that are going to be coming to Medicaid? What are their health care needs? Where are they going to go for care? Do we have adequate primary care capacity for them? Capacity is the primary focus of The Alliance. The other side of the equation is: do we have the specialty capacity to manage these patients? It’s a very difficult question for The Alliance, and in planning for Medicaid in general.

Audra Earle, CEO of Watsonville Community Hospital


DO: Do we have the specialty capacity now in the County? LD: I believe we have the right number of specialists, but an undersupply of PCPs. On the Medi-Cal side, the only way the reimbursement world works is the more care you deliver to the Medi-Cal population through the safety clinics the better. But except for

ing physician practices for the last decade. Dr. DeGhetaldi is President of Santa Cruz Palo Alto Medical Foundation (PAMF) and Sutter Maternity and Surgery Center of Santa Cruz.

Obstetricians (OBs), in Salud Para la Gente (Salud), maybe psychiatrists and part time orthopedists at the Emeline facility, we lack specialists inside the FQHC medical system. We don’t have a finance model to adequately support the delivery of specialty care in this county for Medi-Cal patients. So I worry about specialty access. Among the three counties in The Alliance, we have an unusually high attribution of Medi-Cal patients into private PCPs — about 50%, in comparison to the 10% and 5% in Monterey and Merced, respectively. Maybe its because The Alliance is older here. This is nice, but it’s not in the best interest of the county, since the revenue that a private PCP gets is so much less than what an FQHC gets. DMP: Among the people I’ve spoken to so far, I hear there are a lot of private practice doctors, and networks of private practice doctors that are concerned about the extent to which they’ll be able to stay private and independent as reform goes forward. But you’re saying that there are limitations on the current system of private practices in the county? LD: That’s actually a separate issue. The question for you is do you think that healthcare reform is accelerating consolidation of practices in this county. DO: We think it’s moving in that direction. We’re hearing that physicians, particularly small practice doctors, are concerned about keeping their practice open. So there’s a lot of conversation about consolidation. I don’t know if that’s happening at the rate the conversation is happening. LD: Except for physician anxiety, how healthcare reform, independent of the other stuff going on in healthcare trending, would accelerate that in SCC, except for ACA’s, of which we have Blue Shield, PMG and Dominican, but that’s just a restructuring of an existing thing. It may simply be the timing of health reform, coming together with the economy and how it’s been affect-

DMP: Yes. another concern is whether private practice doctors are going to be able to participate in the health insurances exchanges to the same degree that networks and big groups are. LD: Right, so the second big impact of the ACA is obviously the 2014 exchanges and how that will roll out. How many Santa Cruzan’s are eligible, and who and what will they look like? And the devil’s in the details. So the exchange board now has to ponder: if they limit the network in Santa Cruz to 10% of the physicians they can probably get a better contract rate, but they have to balance that with getting the price down to sell it well, and with broader access. I don’t think anybody has any idea what it’s going to look like. DO: Do you have a sense of what “affordable” will look like in the Health Benefit Exchange (HBE)? LD: There will be subsidies on a sliding scale, for tose between 133%and 400% of poverty. I don’t know exactly but for people that are low-income it’s going to be much cheaper. What would be affordable for a 26 year old with no health issues may be very different than a 64 year old with multiple health issues, and so the question is whether there will be enough in that whole spectrum of population to spread the risk. That’s a big worry. Have you heard of the 3:1 ratio? Today, what the 64 year old with diabetes and coronary artery disease spends actuarially on insurance is 11 to 15 times more expensive. If they went out and bought a solo plan, with pre-existing conditions not excluded, it’s about 15 times more expensive than a young person’s health insurance. The ACA mandates that the actuarial band is 3:1. So we’re going to have to get a lot of 26 year olds will to buy in, and still bring in those few 64 year olds. DO: That’s hard because many 26 year-olds aren’t thinking about health insurance. DMP: And that was part of the rational behind the individual mandate. LD: Yes, Assuming the mandate will have enough teeth; will they get enough people in year one? There will be movement of those folks in MediCal. They are calling this movement “churning”. Not churning in a bad way, but through the different commercial exchanges and Medi-Cal. And it’s


important for the patients – and I’ve testified before the HBE on this – that you don’t create barriers to continuity of care. This is really important because it’s so expensive, wasteful and dangerous to change providers. They behave more like a small employer purchasing a health plan on the market. Health plans have successfully kept proprietary the total cost of care. This way they can tell the purchaser you’ve got a 10 percent increase, and they can tell the provider you’ve got a 5 percent increase. We’re starting to chip away at that because of the medical loss ratio and public reporting. The purchasers are starting to talk to the providers, and they’re starting to put the screws on the transparency lock, because everybody wants a system where we’re transparent on the total cost of care, (price and consumption).

DO: EHRs, are not making that happen? LD: There is the interoperability in meaningful use, (in health care refers to any provider who makes use of EHR technology). We still have silos of care and we still have a system that only talks locally with the county. DMP: Is there a way to keep the competitive model in health care and push it to one aspect of healthcare so that everybody who is involved in the patient’s care are all on the same team, or do you believe that the entire system should become a more cooperative system? LD: This county might be able to do that because we have a demonstrated history of cooperation. I’ll be honest, Kaiser may be

So how does a solo practice physician survive in a world where you have to manage the total cost of care? One of the things we ask our patients on our patient satisfaction surveys that we take very seriously is, “to what extent do you fell that there’s coordination of care among various providers?” We know that wen you go to see Dr. A and then a week later see Dr. B but Dr. B has no idea what Dr. A did, the patient immediately loses confidence. DO: Do you think the new health reform models will improve that? LD: Only if the reimbursement models drive coordination.


a black hole for some patients. Once a patient interacts with the Kaiser system, they disappear. One of the big fears about sharing patients and collaborating is: “you and your system will steal my patient.” That gets in the way of collaboration. DO: A related question, how can we all work together to address workforce challenges, today and in the future? I’m sure you’ve seen the data, but a large number of the physicians in our county will be retiring in the next 15 years, much greater than the number of physicians moving into the county. Do you have a sense of how we might get everybody at the table to look at how we can expand the workforce in the County? LD: We seem to be doing ok on the specialty side. In some areas, maybe, we’re not. For instance, in the intensivist group at Dominican, the average

age is around 62. And you do have to factor in other things: a growing number of the young women physicians are not working full-time; retiring doctors tend to be much more productive, so we almost need two new PCPs for every 68 year old retiring doctor. We are confident in our ability to recruit at PAMF. I am 56. Only five of our 170 doctors are more senior than me. Our average age is around 43. So is your question “can we retain solo practices?” DO: In part, yes, I think that is another concern. But there’s another question. LD: Part of our concern is the cost of facilities. The average doctor that we bring in is about 1 million dollars in capital, just on the ambulatory side, not on the hospital side. That’s a rate limiter. We’re not recruiting PCPs now because we have no space; but we are adding space. Healthcare reform seems to overlap the market changes that are moving doctors to large groups. And CMA is seeing that too. The future of organized medicine has to recognize that they need to find a way to be relevant to the 40-year-old doctor in a group practice model. DMP: But at the same time, for many people, there is something nicer and more personable about a small intimate clinic. Are we losing that? LD: I was at Kaiser with my Mom and it doesn’t feel very intimate. Geisinger Health Plan and one other large system in Wisconsin focused on adopting a virtual group practice network. We actually do that at PAMF. We have 19 sites and some are as small as three doctors. But there’s value in the group culture that can get lost if you allow doctors to come into a group practice and stay unattached. You have to balance the economies of scale that you get with the right size practice building. What’s the right number of docs that balances the intimacy that patient’s want with the efficiency that healthcare delivery needs? It may be different between primary care and the specialty side. For specialists you really need them together. And for primary care, you can get down to a size of 8 to 10 and still provide that balance. DO: Earlier you said physician’s need to lead. This is what Dr. Len Nichols spoke about at our leader-

ship forum this past fall. How do we do that in this county? LD: A group has to be large enough so that you can invest in current and future physician leaders. Kaiser invests in their physicians, moves them along so they can have succession in leadership. They quickly get to where they can have the same kind of conversation, with the hospital administrator or the health plan, as a healthcare MBA. You also need to have systems where physician leadership is encouraged, rewarded, valued and utilized. In Monterey County hospitals dominate the landscape in such a way that physicians deliberately or not have been delegated to a subordinate position. DMP: An issue that’s been touched on in other interviews is the 8.2% of our resident who are undocumented. What will happen to them in 2014 and beyond? Separate the undocumented children from adults, to preserve “Healthy Kids” as the best program for undocumented children. They’re going to need to find a home in the safety net. Who does the specialty care for undocumented individuals? It is the same problem with Medi-Cal. They have a place in our hospitals because the hospitals still need to provide charity care. We may see hospitals fighting for undocumented patients as charity care starts to decline in order to preserve their non-profit status. DMP: I’ve been ending these interviews by asking people to imagine it’s two or five years down the road, many of the ACA provisions have been implemented, what do you hope to see in health care in Santa Cruz County? LD: I think from our side, it is any vehicle we can get to better access, manage and own the total cost of care and know how to provide for a diverse population with a range of health care needs. To be honest, I think we are going to see a gradual transition out of solo practice. DO: Any other final comments? LD: Only that I appreciate the Medical Society looking into this important issue.


When a patient’s family member asked Jose A. Arevalo, MD, to intervene at the skilled nursing facility where his patient was living, he wasn’t quite sure what the patient’s rights were under the law.


updated annually by CMA attorneys and available free to members at the CMA website, It contains information on current laws, regulations and court decisions related to medical practice. A common question on the Legal Line is: “How long do I have to keep a patient’s medical record?” CMA staff can e-mail or direct a member to a CMA ON-CALL document that discusses statutory record retention requirements, recommended retention periods, options for record manage-

members to the right resource or do more in-depth research.” Pellón, who is set to begin a Masters in Public Health at the University of California Berkeley this fall, adds that although CMA cannot give individual legal advice to members, “we try to research and provide enough information as possible to help members with their legal questions.” This includes pulling in CMA attorneys with knowledge in a specific issue area to help locate the relevant law. When Dr. Arévalo asked about the legal rights of his patient at a skilled

“We were recently updated that one member was able to get back over $20,000 from the settlement fund after accessing and using our advocacy resources.” ment, as well as record destruction requirements. See CMA ON-CALL document #1160, “Retention of Medical Records.” Some Legal Line inquiries, however, are more complex. “Many of these questions are not straightforward,” said Samantha Pellón, CMA’s health law information specialist who has staffed the Legal Information Line for the past four and a half years. “I will often ask a lot of questions to get enough information about a certain situation so I can refer

nursing facility, CMA legal counsel Alicia Wagnon got involved. Wagnon, who previously worked as a litigator in private practice defending doctors in medical malpractice and employment law, called her contacts at the California Association of Health Facilities (CAHF). Wagnon was able to get a clear answer from CAHF quickly and pass on useful guidelines to Dr. Arévalo. “Associations are always looking for trends (in their area of specialty), so they were happy to provide information.” She said networking with other health associations in the state allows the associations to track issues that may affect their members.

A Community Partnership of


Leaders in Medicine, related Health Professionals & Community Committed to Improving the Health, Well-Being and Safety of our Communities and Region.

Supporting the advancement of medicine, healthcare-focused community-wide efforts, medical education & public health programs. For more information call 831-479-7226 Go to: CruzMedFoundation.aspx


With the ease of e-commerce and patients’ desires to save money, the Legal Information Line has received numerous questions about the use of foreign internet pharmacies. When a county medical society contacted the Legal Information Line on behalf of a member physician about a patient who wanted to buy prescription medicine from an online pharmacy in Canada, CMA legal counsel Lisa Matsubara not only provided the physician with a CMA ONCALL document discussing the risks of obtaining drugs from a foreign country (CMA ON-CALL document #0511, “Drug Prescribing: Drugs from Other Countries”), but she also researched several websites for Canadian pharmacies. “On behalf of the patient, the Canadian online pharmacy faxed the physician a prescription form and asked that the physician fill it out and return the prescription form to the pharmacy,” Matsubara said. "The physician wanted information on the legality of prescribing and importing drugs from a Canadian pharmacy.” Matsubara, who has staffed the Legal Information Line for over two years, reviewed the websites and found policies and disclaimers that conflicted with federal and state laws.

Although she was unable to give individual legal advice, Matsubara provided the county medical society with pertinent information on the applicable laws, as well as guidance from the Food and Drug Administration and the California Board of Pharmacy about the potential liability risks associated with the importation of drugs from foreign countries.

CMA HELPS MEMBERS RECOUP THOUSANDS OF DOLLARS IN CLASS ACTION LAWSUIT Inquiries to the Legal Information Line also inform CMA attorneys about the need for certain advocacy resources. In 2000, the American Medical Association along with other health care provider and patient groups, filed a class action lawsuit against UnitedHealth Group, alleging that United conspired to defraud consumers by manipulating out-ofnetwork reimbursement rates and shortchanging physicians and patients by hundreds of millions of dollars over 15 years. “We had a lot of questions from our membership about filing a claim for reimbursement after the settlement,” Pellón said. To help physicians understand the settlement and what they need to do to claim their share, CMA’s Director of Litigation, attorney Long Do, created a settlement guide for CMA members. The guide discussed key provisions of the settlement and provided information on how to qualify and submit claims to the settlement fund. In addition, the CMA legal center put together a resource page with links to settlement forms, the settlement claims administrator website, and AMA resources. See United/Ingenix Settlement Guide.

members of the public to rate and review physicians, we were receiving phone calls from physicians asking about what their options were with regard to negative online reviews of their practice,” said Matsubara. In response, Matsubara authored a CMA ON-CALL document addressing member concerns and providing information on identifying online reviews, responding to negative online comments and possible legal remedies for physicians who find themselves the subject of such reviews. See CMA ONCALL document #0822, “Online Consumer Review and Rating Sites.”

WE ARE HERE TO HELP By listening to member inquiries, asking questions, doing research and contacting outside resources, including other health organizations and government agencies, the Legal Information Line staff works hard to address members’ questions. Whether the questions are simple or complex, “We always try to find the right information to best address our members’ questions,” Pellón said. “Do they need to talk to their professional liability carrier or a state agency? We try to direct them to the right resource if we cannot address a question.” Pellón adds that if a member needs specific legal advice, “we also maintain contact information for physician-friendly attorneys” in various physician-related legal issue areas.

Pellón says that the settlement guide, resource page and staff assistance helped CMA member physicians recoup thousands of dollars. “We were recently updated that one member was able to get back over $20,000 from the settlement fund after accessing and using our advocacy resources.”

HOW TO RESPOND TO NEGATIVE ONLINE REVIEWS Another issue that is the subject of numerous calls to the Legal Information Line is how to handle negative comments on consumer review and rating websites. Such websites are a concern for physicians because inappropriate negative comments can damage a physician’s reputation and affect his or her practice. “With more and more websites inviting patients and other

Medical and Public Health Professionals improving the public health, emergency response and community resiliency.

Join the Santa Cruz County Medical Reserve Corps and be an active member, Call 831-479-7226 Go to



Inside Back Cover


Coastal Medicine The Official Magazine of the Santa Cruz County Medical Society

1975 Soquel Drive, Suite 215 Santa Cruz, CA 95065

Coastal Medicine Magazine  

Winter 2012 / 2013 Volume 1, Number 1

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