In summary

More than half the state’s health care budget will be spent on just 5 percent of its patients—and they’re not the sickest people. Officials are staging an intervention.

The state budget that kicked in last month devotes more than $100 billion to Medi-Cal, California’s health system for the poor. The bulk of that money will be spent on a tiny fraction of patients. And although they’re in need of help, they’re not the sickest people.

  • Just 10 percent of state-supported patients use up almost two thirds of the Medi-Cal budget;
  • Only 5 percent of patients account for more than half of Medi-Cal spending;
  • One percent of Medi-Cal’s current 13.2 million enrollees, or 132,000 people, will use up more than a quarter of the money.

Officials are trying to change this super-user pattern—identified in a 2015 report that still reflects state and even national trends—with an ambitious intervention.

Some super-users have life-threatening illnesses, such as children with rare cancers or people receiving major organ transplants. But most of them struggle with addiction or mental health problems and rack up high numbers of emergency-room visits and hospital admissions. So in late 2016, the state launched a five-year, $3 billion effort to identify and treat them, coordinate their care and direct them to recovery and prevention programs.

Through 25 pilot projects across California, with varying approaches from county to county, officials hope to reach more than 300,000 chronic users and save hundreds of millions of dollars. About a third of all Californians receive care through Medi-Cal, and the projects, funded with half state and half federal dollars, stem from a larger state move to reduce chronic conditions and save money.

Initial results from participating counties are expected to be released this fall.

Studying super-users is relatively new, and the private sector is also exploring ways to improve their care and cut costs. According to Nadereh Pourat, director of research at UCLA’s Center for Health Policy Research, no other state has this kind of project. But they will, she said, once savings can be realized and documented in California.

A single hospital stay can cost $10,000, Pourat said. “If you can avoid one hospital visit a week, you could reduce costs by 2 percent or 3 percent, and that’s significant savings.”

Melissa Tober-Beers runs the pilot program in Orange County. “This isn’t official, and it’s not cumulative,” she said, “but…at one hospital, they said they saved $2 million so far.” She pauses to let the number sink in. “And that’s just one hospital.”

Seven hospitals in Orange County are participating. The county works with the hospitals and dozens of clinics, health insurers, homeless shelters, advocacy groups and other organizations to identify super-users and get their physical, mental and substance-abuse problems under control.

At a recuperation facility run by the nonprofit Illumination Foundation—blocky and nondescript on the outside, tidy and homelike on the inside—about three dozen homeless residents are recovering from hospital procedures. About half of them are part of the pilot program, said Summer Thomason, who runs the center.

Summer Thomason runs a recuperation center in Orange County. Photo by David Gorn/CALmatters
Summer Thomason runs a recuperation center in Orange County. Photo by David Gorn/CALmatters

“We had one person here—we called him Million Dollar Murray. He was in the ER or hospital 142 times in one year” with psychotic episodes and various physical maladies, Thomason said.

Inappropriate use of the ER falls into two main categories, said Jacey Cooper, an assistant deputy director at the state Department of Health Care Services, which oversees Medi-Cal and the pilot programs. Some patients don’t need emergency care and use the ER like they’re visiting a friend. Some have a genuine emergency, often because they’ve delayed care of a problem or illness until it reached a crisis. At that point, it’s difficult to treat—and more expensive.

Many such patients are homeless, Cooper said. “They have no circle of support; they often have mental health issues or substance use problems.”

Cooper said some counties in the pilot program reach people as they’re released from jail, assigning them a care manager because they’re at high risk for homelessness, drug abuse and frequent use of the health system. And some place a health professional in the ER to find and coordinate care for high users. It can be easy to identify them there, because personnel may greet them by name, she said.

That was the case for Robin Miller, 41, a former Illumination Foundation resident who now lives in Riverside. “I was in the ER all the time,” Miller says.

She’s sitting in the dining area of her small apartment, her perky Australian terrier-mix dog in her lap. She’s been sober for nine months—and counting. But in 2015 and 2016, she went to the ER regularly for episodes of severe depression, and for nerve pain so bad she couldn’t walk, which she attributed to drinking. She went several times after falls, which she said were due to lost consciousness after drug use.

“And one time I went to the ER just because I didn’t want to sleep on the street,” she says, laughing now. “I don’t remember what I told them was wrong with me. But I just wanted a bed to sleep in.”

Treatment of her physical and psychological problems, along with help obtaining county and state services after she transferred to an Illumination Foundation center, have helped turn her life around. She used to teach at community colleges and hopes to get back to the classroom soon.

“When I first got out of the hospital, I could barely walk,” she said. “Now I take my medication, I see a therapist, I go to AA meetings….I’ve started writing again.

“I’m walking pretty well, and that’s going to get better. And I wake up every morning grateful to be alive. Food tastes better. Everything around me, it all feels new.”

This is the fourth article in a series on state efforts to foster healthy living as a way to reduce chronic illness.

We want to hear from you

Want to submit a guest commentary or reaction to an article we wrote? You can find our submission guidelines here. Please contact CalMatters with any commentary questions: