Emily Jo Cureton, The Triplicate

Nationwide, health care reform is happening. Statewide, health care reform is happening. And in Del Norte County, health care reform is happening.

On Tuesday the county's director of Health and Human Services Gary Blatnick updated the county Board of Supervisors on what's happening to Medi-Cal, a state insurance plan for low-income families, elderly and disabled people - about a third of Del Norte's population.

Part of Gov. Jerry Brown's plan to carve billions of dollars out of the state budget involves fully transforming Medi-Cal from a fee-for-service model to a managed care model.

It's complicated, Blatnick warned the supervisors, but it could affect the type of health services available to all area residents.

Medi-Cal managed care is nothing new in California, but it is new for Del Norte, where most providers currently bill the state directly for each service a patient receives.

Under the managed care model, a third party would negotiate rates and administer a lump sumto pay providers forserving a given population of patients.

Proponents say this leads to better health outcomes, emphasizing preventive care over costly treatments, as well as a coordinated approach between multiple providers all seeing one patient.

Critics say it encourages thrift and corner-cutting when lives are at stake.

Either way, it's happening. Beginning in July 2013, the state has proposed to expand Medi-Cal managed care to 28 rural counties, Del Norte among them.

Local leaders are hoping to have more of a say in how this happens. Last month the supervisors backed a proposal to group Del Norte with seven other demographically and geographically comparable counties, which would have collectively chosen a managed care organization, to be overseen by people living in the communities affected.

The request was denied by the state and as it stands, Del Norte's Medi-Cal population could be lumped in with that of 18 other counties. The contract for managing the care of this much bigger patient pool would be put out to competitive bid, a move Blatnick said would likely be "advantageous for private insurance companies," and not so much for rural patients or providers.

"We cannot overstate the critical importance of matching the right managed care plan with the region to preserve the fragile health provider base we have developed," he wrote in a letter to the state.

That base consists of one hospital, two clinics that provide the majority of outpatient Medi-Cal services here and a handful of independent primary care doctors and specialists.

"In small communities there may be only one specialist trying to survive economically. If they are presented with one reimbursement rate set by large urban areas, they simply may not be able to survive in independent practice," Blatnick told the Triplicate.

"Due to declining Medi-Cal reimbursements, I started to limit the number of Medi-Cal patients I see," said Dr. Greg Duncan, one of two orthopedists practicing in the area.

He estimated that 65 percent of the patients he sees are state-insured.

Like all health care charges, the going rates in a fee-for-service Medi-Cal model, like the one Duncan operates within, are not based on actual costs. In fact they are often lower than costs and are determined by legislators. In the case of privately insured patients, reimbursement rates are often higher than costs, the result of confidential, competitive contracts with private insurance companies.

Under proposed state budget cuts, primary care doctors could get paid $11 for an office visit with a Medi-Cal patient.

"We don't want it to be worse," Blatnick said. "We believe that it will be worse if instead of the state of California setting the fee structure, which is what it does now, an insurance carrier sets the fee structure for all the communities. They have incentive to make the fees be as low as possible."

Reach Emily Jo Cureton at ecureton@triplicate.com.