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EXQCU1IVQ Summery
Rising numbers of uninsured Americans, an increasingly price-driven
health care marketplace, and rapid growth in enrollment of Medicaid
beneficiaries in managed care plans may have critical implications for the
future viability of America's health care safety net that serves a large
portion of low-income and uninsured Americans. Of particular concern is
the future of "core" safety net providers, institutions and physicians with
a high level of demonstrated commitment to caring for uninsured and
underserved patients. A failure to support and maintain these core pro-
viders could cause the entire safety net to collapse.
Despite the nation's vast riches and enormous resources, certain popu-
lations (referred to as "vulnerable populations" throughout this report)
continue to fall outside the medical and economic mainstream and have
little or no access to stable health care coverage. These populations include
the 44 million Americans who are uninsured, low-income underinsured
individuals, Medicaid beneficiaries, and patients with special health care
needs who rely on safety net providers for their care. A large number of
individuals who make up these groups are of minority and immigrant
status and live in geographically or economically disadvantaged commu-
nities. The relationship between health insurance and access to health
care and medical outcomes has been well documented (American College
of Physicians-American Society of Internal Medicine, 2000; Davis and
Schoen, 1977~. Uninsured individuals are less likely to have a regular
source of care, are more likely to report delay seeking care, and are more
likely to report that they have not received needed care. Uninsured Ameri-
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2 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
cans may be up to three times more likely than privately insured indi-
viduals to experience adverse health outcomes and four times as likely as
insured patients to require both avoidable hospitalizations and emergency
hospital care (American College of Physicians-American Society of Inter-
nal Medicine, 2000~.
In the absence of universal comprehensive coverage, the health care
safety net has served as the default system for caring for many of the
nation's uninsured and vulnerable populations. Until the nation addresses
the underlying problems that make the health care safety net system
necessary, it is essential that national, state, and local policy makers pro-
tect and perhaps enhance the ability of these institutions and providers to
carry out their missions. In many communities these providers uniquely
offer care that addresses the clinical and social needs of vulnerable patients
who remain outside the economic and medical mainstream. Failure to
support these essential providers could have a devastating impact not
only on the populations who depend on them for care but also on other
providers that rely on the safety net to care for patients whom they are
unable or unwilling to serve.
To gain a better understanding of the potential impact of the current
transformations in health care delivery, financing, and public policies on
safety net providers, the U.S. Department of Health and Human Services'
Health Resources and Services Administration asked the Institute of Medi-
cine (IOM) to appoint a committee that would
examine the impact of Medicaid managed care and other changes in
health care coverage on the future integrity and viability of safety net
providers operating primarily in ambulatory and primary care settings.
A committee of 14 experts was selected to conduct the study. The
committee was carefully formulated to reflect a balance of expertise par-
ticularly relevant to its charge. The committee met five times between
December 1997 and February 1999, and its deliberations and fact-finding
activities included expert hearings and testimony, commissioned papers
and data analyses, structured interviews, and site visits. These activities
are described in greater detail in Chapter 1 of this report.
Although the committee understood that the study's sponsor was
particularly interested in the ambulatory and primary care providers that
fall under its funding authority, the committee and sponsor recognized
that an accurate assessment of the role and future viability of these pro-
viders would have to encompass other major inpatient and community-
based ambulatory care providers with demonstrated commitment to serv-
ing the poor and uninsured.
In carrying out its charge, the committee was asked to focus on the
current challenges facing historical providers of care to the poor and
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EXECUTIVE SUMMARY
3
uninsured in terms of their future financial viability and survival. In dis-
cussing its mandate, the committee was fully aware that this particular
focus and perspective necessarily would exclude a broader exploration of
alternative frameworks for providing the nation's poor and uninsured
access to health care. In an environment of choice and competition, cer-
tain subgroups of traditionally safety net-dependent patients may have
new and perhaps better care options. Some analysts argue that the future
viability of safety net providers should be of concern only to the extent
that these providers specifically and measurably improve access to quality
health care for individuals in need of their services. Additionally, although
traditional safety net providers serve a disproportionate number of poor
and uninsured patients, in the aggregate they provide only a portion of
the uncompensated care provided in most communities (Cunningham
and Tu, 1997; Lefkowitz and Todd, 1999~. This perspective could argue
for a more global assessment of safety net services and their relative ade-
quacy in a given community. Still others argue that policy and program
efforts directed to poor and uninsured populations primarily should be
targeted at broadening access to affordable insurance rather than subsi-
dizing a designated class of providers.
Although the committee sees some merit in all of these perspectives,
its charge was to assess the health care safety net system as it exists today
and to focus its deliberations on these major providers of care to poor and
uninsured populations. In addition, over the course of its deliberation the
committee read and heard convincing evidence that even within the con-
text of insurance reform segments of America's most disadvantaged popu-
lations will continue to rely on traditional safety net providers for their
health care services, not only because these may be the only providers
available and accessible, but also because many of these providers are
uniquely organized and oriented to the special needs of low-income and
uninsured populations.
Although no commonly accepted definition of the safety net exists,
for the purposes of this study, the IOM committee defines the "health care
safety net" as follows:
Those providers that organize and deliver a significant level of health
care and other related services to uninsured, Medicaid, and other vul-
nerable patients.
In most communities there is a subset of the safety net that the com-
mittee describes as "core safety net providers:"
These providers have two distinguishing characteristics: (1) either by
legal mandate or explicitly adopted mission they maintain an "open
door," offering access to services for patients regardless of their ability
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4
AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
to pay; and (2) a substantial share of their patient mix is uninsured,
Medicaid, and other vulnerable patients.
Core safety net providers typically include public hospital systems;
federal, state, and locally supported community health centers (CHCs) or
clinics (of which federally qualified health centers [FQHCs] are an impor-
tant subset); and local health departments. In most communities several
smaller special service providers (e.g., family planning clinics, school-
based health programs, and Ryan White AIDS programs) also are consid-
ered a part of the core safety net. In some communities teaching and
community hospitals, private physicians, and ambulatory care sites with
demonstrated commitment to serving the poor and uninsured fulfill the
role of core safety net providers.
The nation's health care safety net is not comprehensive, nor is it well
integrated (Baxter and Mechanic, 1997~. Rather, it is a patchwork of insti-
tutions, financing, and programs that vary dramatically across the country
as a result of a broad range of economic, political, and structural factors.
These factors include the strength and configuration of the local economy,
the numbers and concentration of poor and uninsured individuals, the
structure of the local tax base, the depth and breadth of a state's Medicaid
eligibility and benefits, and the community's historic commitment to care
for the uninsured and other vulnerable populations.
Although it is difficult to generalize about the overall state of the
nation's health care safety net given its local nature and attributes, in
carrying out its charge the committee was particularly concerned about
the state of the core safety net and its ability to continue to provide needed
access to this nation's most disadvantaged and underserved populations.
In many underserved inner-city and rural communities, core safety net
providers may be the only available source of primary health care ser-
vices for the vulnerable populations residing in these areas.
Rising numbers of uninsured patients, coupled with changes in Medic-
aid policies and cutbacks in public and other subsidies, are beginning to
place America's health care safety net in a state of serious jeopardy. The
loss of safety net providers could harm not only the uninsured and people
with low incomes but also the community at large. For example, in many
regions, large public teaching hospitals are often the only source of trauma
care, burn units, and other specialized services that are vital but that tend
to be unprofitable.
THE THREAT TO CORE SAFETY NET PROVIDERS
Core safety net providers serve a disproportionate share of low-
income and uninsured patients. In 1997, public hospitals provided 28
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EXECUTIVE SUMMARY
5
percent of their services to uninsured patients, and an additional 33 per-
cent were to Medicaid patients (National Association of Public Hospitals
and Health Systems, 1999~. Similarly, more than 40 percent of patients
who receive care from FQHCs are uninsured, whereas an additional 30 to
40 percent are Medicaid beneficiaries (Bureau of Primary Health Care,
1998).
Over the years, Medicaid (and to a lesser extent Medicare) has become
the financial underpinning of the safety net. Historically, Medicaid has
provided the majority of insured patients for most safety net providers
and has subsidized a substantial portion of care for the uninsured through
such programs as disproportionate share hospital (DSH) payments and
cost-based reimbursement for FQHCs. State and local government grants
also represent an important but variable source of revenues for most safety
net providers.
A major cause for concern is the committee's finding that Medicaid as
well as other revenues and subsidies that in the past have helped support
care for uninsured and other vulnerable populations are becoming more
restricted at the same time that the demand on the safety net is rising. The
pressures on the safety net in many communities are the result of both
intended and unintended consequences of the new health care market-
place and recently adopted public policies. Although the full impact of
these dynamics is still unfolding, the committee has identified several
troubling trends.
· The number of uninsured people is growing.
More than 44 million people, or 18 percent of the total nonelderly
population, lack health care coverage, an increase of 11 million over the
past decade. New studies forecast that, absent major reform, the ranks of
the uninsured will continue to grow substantially over the foreseeable
future (Custer and Ketsche, 1999~. Rising insurance costs relative to fam-
ily income, the impact of welfare reform, and other factors have contrib-
uted to these trends. As a result, both public hospitals and CHCs are
seeing an increased number of uninsured patients.
· The direct and indirect subsidies that have helped finance un-
compensated care are eroding.
The Balanced Budget Act of 1997 (BBA) reduced some of the major
direct public subsidies that have helped finance health care for indigent
populations, including significant cuts in Medicaid DSH payments and
the phaseout over 5 years of cost-based reimbursement for FQHCs. The
recently passed Balanced Budget Refinement Act of 1999 places a 2-year
moratorium on the scheduled repeal and extends the phaseout from 2003
to 2005. The 1999 Act also calls for a study to determine how CHCs
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6 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
should be paid in subsequent years (National Association of Community
Health Centers, 1999~. The committee also read and heard evidence that
in a number of states, state and local funds are also being cut or frozen,
despite growing needs (Holahan et al., 1998; Norton and Lipson, 1998~.
With the decline and planned phaseout of federal subsidies, local rev-
enues become increasingly important to the future viability of safety net
providers.
In some communities a substantial proportion of care for the uninsured
is delivered by private physicians and institutions that do not fall within
the committee's definition of core safety net providers (Cunningham et
al., 1999; Mann et al., 1997~. Although these patients may represent only a
small part of these providers' total practice or business, in aggregate these
providers deliver a significant amount of charity care. Historically, these
providers have been able to cover most of their uncompensated care costs
by shifting the costs to other payers. Recent data indicate that physicians
who derive a major share of their practice revenues from managed care
are less willing or able to provide charity care (Bindman et al., 1998;
Cunningham et al., 1999~. This is placing even more pressure on an already
strained safety net system.
· The rapid growth of Medicaid managed care is having many
adverse effects.
A number of core safety net providers operating in mandatory Medic-
aid managed care environments are experiencing a decline in Medicaid
revenues because of a reduction in the absolute numbers of Medicaid
beneficiaries, the diversion of some Medicaid beneficiaries to other pro-
viders, and lower payments by Medicaid managed care plans (Lefkowitz
and Todd, 1999~. Competition for market share and downward pressure
on prices by private payers have made Medicaid patients relatively more
desirable to providers that in the past have not been willing to serve this
population, shifting some Medicaid patients away from traditional pro-
viders. The committee heard extensive evidence that these factors are
challenging the continuing ability of some safety net providers to balance
the need to maintain a financial margin and pursue their mission of pro-
viding care to the uninsured.
In the past, safety net providers have served two major groups of
poor patients: the uninsured and those on Medicaid. Over the years these
two groups have become inexorably linked both because of the transient
nature of Medicaid eligibility and because other providers could not or
would not serve them. Although they were not originally intended to
subsidize care for the uninsured, Medicaid revenues have helped core
safety net providers defray some of the overhead and infrastructure costs,
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EXECUTIVE SUMMARY
freeing limited grant funds and other revenues to be directed more to
supporting care for the uninsured.
Under the traditional Medicaid program, beneficiaries were respon-
sible for finding a willing provider to care for them. In many communi-
ties, Medicaid-participating providers were few and far between and
safety net providers were the only source of care for the poor. Today,
many states are offering Medicaid beneficiaries the opportunity to enroll
in private managed care plans with the promise of more choice of providers
and facilities. Enhanced choice of quality providers is desirable as a matter
of equity and can create incentives for all providers to improve their
performance. At the same time, however, the shift of Medicaid patients
away from safety net providers combined with the growing number of
uninsured people may have the effect of destabilizing an already fragile
safety net.
The categorical and episodic nature of Medicaid eligibility means that
individuals tend to cycle on and off insurance, often with long spells of no
insurance. Under the traditional Medicaid program, low-income indi-
viduals and families who lost Medicaid coverage would continue to see
safety net providers without much interruption. Private managed care
organizations have no legal responsibility or mission to continue to sup-
port the care of patients when they become uninsured. The committee is
concerned that these new trends not only undermine the financial viability
of core safety net providers but also impair the continuity of care for these
patients.
Although managed care has been shown to improve access to pri-
mary care in some communities, Medicaid managed care appears to have
major differences from commercial managed care. Compared with pri-
vately insured persons, Medicaid beneficiaries tend to be far more vulner-
able, their needs more diverse, and their experience with and capacity for
exercising choice more limited. They may also lack the resources to go
"out of plan" if they are dissatisfied with their care. In addition, non-
medical services of special importance to vulnerable populations (e.g.,
enabling services such as translation services, transportation to clinic
visits, and the provision of child care services, and outreach) may not be
part of a managed care contract or amenable to a managed care infra-
structure. Procedures that facilitate ease of beneficiary enrollment and the
exercise of choice, together with adequate oversight of plan performance,
take on special importance for this population. Unfortunately, many of
these efforts are in a fledgling stage and vary widely from state to state.
During the course of its deliberations, the committee was struck by
the complexity and variations of local safety net systems, their various
dynamics and financial circumstances, and the lack of sufficient and com-
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8 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
parable data that can be used to reach with confidence empirical conclu-
sions in certain areas in this period of ongoing evolution. These observa-
tions were reinforced by a number of articles, evaluations, and research
papers that highlighted the promise and problems of Medicaid managed
care in a more competitive, performance-based environment. In most
cases, these studies concluded that the promise has not yet been fully
realized and that the problems, although worrisome, have not yet reached
. . .
crisis proportions.
In summary, the committee finds that core safety net providers in
most communities are experiencing the adverse effects of many forces.
The safety net has historically functioned in a precarious environment,
surviving through many shifts in the economy, in policy, and in funding.
Today, however, the convergence of new and powerful dynamics the
growth of mandated Medicaid managed care, the retrenchment or elimi-
nation of key direct and indirect subsidies that help finance charity care,
and the growth in the number of uninsured Americans is beginning to
place unprecedented strain on the health care safety net in parts of the
country. These dynamics and their potential impact on access to care for
the nation's uninsured and most disadvantaged populations call for more
concerted public policy attention and concrete action. In light of these
considerations, the committee offers the following findings and recom-
mendations (described in greater detail in Chapter 7 of this report):
MAJOR FINDINGS
Finding 1. The shift to Medicaid managed care can have adverse
effects on core safety net providers and the uninsured and other
vulnerable populations who rely on them for care. These dynam-
ics demand greater attention and scrutiny by policy leaders and
administrative agencies at the federal, state, and local levels.
Finding 2. Managed care principles offer significant potential for
improved health care for Medicaid patients, but implementation
problems can undermine this potential.
Finding 3. The financial viability of core safety net providers is
even more at risk today than in the past because of the combined
effects of three major dynamics: (1) the rising number of un-
insured individuals; (2) the full impact of mandated Medicaid
managed care in a more competitive health care marketplace; and
(3) the erosion and uncertainty of major direct and indirect subsi-
dies that have helped support safety net functions.
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EXECUTIVE SUMMARY
Finding 4. The patchwork organization and the patchwork fund-
ing of the safety net vary widely from community to community,
and the availability of care for the uninsured and other vulner-
able populations increasingly depends on where they live.
Finding 5. The committee found that most safety net providers
have thus far been able to adapt to the changing environment.
Even for these providers, however, the stresses of these changes
have made it increasingly difficult for them to maintain their mis-
sions while protecting their financial margins. In addition, the
full consequences of changing market forces, increases in the
number of uninsured, and reduced levels of reimbursement have
not yet been felt by these providers in some communities. The
committee further observed that the current capacity for monitor-
ing the status of safety net providers is inadequate for providing
timely and systematic evidence about the effects of these forces.
RECOMMENDATIONS
Recommendation 1. Federal and state policy makers should
explicitly take into account and address the full impact (both
intended and unintended) of changes in Medicaid policies on
the viability of safety net providers and the populations they
serve.
9
In making this recommendation, the committee believes that the fol-
lowing issues need heightened public policy attention:
· failure to take into consideration the impact on safety net providers
of changes in Medicaid policy could have a significant negative effect on
the ability of these providers to continue their mission to serve the un-
insured population, particularly those who move back and forth between
being eligible for Medicaid and being uninsured;
· the adequacy and fairness of Medicaid managed care rates;
· the erosion of the Medicaid patient base and the financial stability
of core safety net providers that must continue to care for the uninsured
population;
· the declining ability or willingness of non-core safety net providers
to provide care for the uninsured population; and
· the current instability of the Medicaid managed care market includ-
ing the rapid entry and exit of plans and the impact of this churning of
program beneficiaries.
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AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
Recommendation 2. All federal programs and policies targeted
to support the safety net and the populations it serves should
be reviewed for their effectiveness in meeting the needs of the
uninsured.
Major new forces have altered the financing and delivery of health
care services, including the move to managed care by both private and
public payers, the separation of care for Medicaid patients from care for
uninsured individuals, the erosion and retrenchment of direct and indi-
rect subsidies that have helped provide care for those without coverage,
and the increasing concentration of care for the uninsured population
among fewer providers. These dynamics call for a careful review of pro-
grams and policies that were designed to improve access to care for vul-
nerable populations and support the providers that serve them to make
sure that that these programs are still effectively targeted to meet their
original objectives. The committee believes that such an analysis is espe-
cially important given the growing number of uninsured Americans and
the declining ability to meet their health care needs. Federal health care
programs that provide direct or indirect support for safety net providers
and for services for vulnerable populations should be reviewed and modi-
fied to ensure that any funding allocation formula specifies explicit crite-
ria for the delivery of services to the uninsured population as a basis for
support. Eligibility for Medicaid and Medicare DSH funds should also be
reexamined to include a greater focus on the level and share of services
for the uninsured. Although the committee believes strongly that no funds
should be diverted from the core safety net, any funds that become avail-
able as a result of this reexamination should be distributed in a manner
that ensures that providers of both ambulatory and inpatient care are
eligible to receive support.
Recommendation 3. The committee recommends that concerted
efforts be directed to improving this nation's capacity and abil-
ity to monitor the changing structure, capacity, and financial
stability of the safety net to meet the health care needs of the
uninsured and other vulnerable populations.
The committee believes that the fragility of local safety nets has the
potential to become a national crisis, and therefore, it calls for stronger
federal tracking, direction, and targeted direct support. At this time, no
single entity in the federal government has the responsibility for monitor-
ing and tracking the status of America's health care safety net and its
ability to meet the needs of those who rely on its services. Various agen-
cies have responsibility for programs and policies that affect one part of
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EXECUTIVE SUMMARY
11
the safety net delivery system (e.g., the Health Resources and Services
Administration, the Centers for Disease Control and Prevention, the Sub-
stance Abuse and Mental Health Services Administration, the Health Care
Financing Administration, the Head Start program, the Indian Health
Service, and the Departments of Veterans Affairs, Defense, Agriculture,
and Housing and Urban Development), but no comprehensive, coordi-
nated tracking and reporting capability exists. Although it acknowledges
the appropriate roles and responsibilities of the various agencies and the
benefits of state and local innovations, the committee believes that such a
tracking capability could promote public accountability, as well as a more
coordinated approach to data collection, technical assistance, and the
application and dissemination of best practices.
A number of organizational settings could be considered for the place-
ment of an enhanced safety net tracking and monitoring activity, includ-
ing an existing agency, department, or program, or a newly established
entity. Although the committee elected not to come to a final decision on
where such an entity could be placed, it did discuss and identify the major
organizational attributes that would be needed to enable a safety net
oversight entity to successfully carry out its mission. The committee
strongly believes that such an entity should be independent; organized as
an ongoing activity with dedicated staff; nonpartisan in its membership;
and include a range of expertise required to carry out its charge. Such an
oversight body would affect a number of state and local entities and
would cut across several federal agencies. In identifying these attributes
the committee viewed with favor an organization like the Medical Pay-
ment Advisory Commission (MedPAC) with its mandate to report directly
to Congress. Alternatively, the oversight body could reside in the execu-
tive branch at a Departmental level. As an example of the executive branch
model, the committee was impressed with the work and impact of the
President's Advisory Commission on Consumer Protection and Quality
in the Health Care Industry. However, the Quality Commission had a
limited term, consistent with its mandate to produce recommendations
for action and implementation by other parts of the federal government
and the private sector. The committee's proposed tracking and monitor-
ing activity would require an ongoing term of operation, since its major
function would be to assess, monitor, and report on the status of America's
health care safety net over time. The committee in its deliberations referred
to the monitoring and oversight entity as the Safety Net Organizations
and Patient Advisory Commission (SNOPAC).
To carry out its mission, the committee recommends that the initial
activities of a safety net oversight entity include the following:
· monitor the major safety net funding programs (e.g., Medicaid, the
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12 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
State Children's Health Insurance Program [SCHIP], Title V, FQHCs, and
the various government DSH payment plans) to document and analyze
the effects of changes in these programs on the safety net and the health of
vulnerable populations;
· track the impact of the BBA of 1997 and other forces on the capacity
of other key providers in the safety net system to continue their sunnort-
ive roles in the core safety net system;
--r r
· monitor existing data sets to assess the status of the safety net and
health outcomes for vulnerable populations;
· wherever possible, link and integrate the existing data systems to
enhance their current ability and to track changes in the status of the
safety net and health outcomes for vulnerable populations;
· support the development of new data systems where existing data
are insufficient or inadequate;
· establish an early-warning system to identify impending failures
of safety net systems and providers;
· provide accurate and timely information to federal, state, and local
policy makers on the factors that led to the failures and the projected
consequences of such failures;
· help monitor the transition of the population receiving Supple-
mental Security Income into Medicaid managed care including careful
review of the degree to which safety net-based health plans have the
capacity (e.g., case management and management information system
infrastructure) to provide quality managed care services to this popula-
tion and the degree to which these plans may be overburdened by adverse
selection; and
· identify and disseminate best practices for more effective applica-
tion of the lessons that have been learned.
Recommendation 4. Given the growing number of uninsured
people, the adverse effects of Medicaid managed care on safety
net provider revenues, and the absence of concerted public poli-
cies directed at increasing the rate of insurance coverage, the
committee believes that a new targeted federal initiative should
be established to help support core safety net providers that
care for a disproportionate number of uninsured and other vul-
nerable people.
Funding would be in the form of competitive three-year grants. Grants
will vary in size, based on the scope of the project. Sources of financing
could include funds available from the federal budget surplus and unspent
funds from SCHIP and other insurance expansion programs. Although
the committee projects such a new initiative may require a minimum of
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EXECUTIVE SUMMARY
13
$2.5 billion ranging over five years, the specific size and scope of this
program should be determined by the administration and the U.S. Con-
gress and should be modified based on an assessment of the parameters
of the problem by the safety net oversight entity. These assessments
should be an ongoing responsibility of the safety net oversight entity.
The following principles should govern the distribution of these
funds:
· Because the committee recognizes the challenges of delivering co-
ordinated, seamless care for the poor uninsured and other vulnerable
individuals at a time when the number of such people is increasing, the
new initiative should concentrate on both the infrastructure for such care
and subsidies of the care itself. Multiple models could be funded under
this initiative, mirroring the multiple models of safety net arrangements
in the various states and local communities. For example, in some areas a
large safety net hospital could take the lead and join with other providers,
including community-based clinics. A state or local government could
stimulate cooperative efforts in other areas, participating with its own
service-delivery capacity. In still others, coalitions of ambulatory care pro-
viders, such as CHCs allied with local private physicians, could form and
undertake the initiative.
· Funds could be used for infrastructure improvements (e.g., for
equipment, rehabilitation of unattractive and inefficient buildings, and
management information systems) or to help defray costs or support items
and activities such as legal and other costs related to establishment of the
network (in ways to avoid charges of antitrust and fraud and abuse),
improvements in quality of care (e.g., patient tracking systems, re-
engineering, and programs targeted to high-risk patients), and, where
needed, the health care itself.
· Funds would be available to communities that demonstrate the
potential capacity to deliver comprehensive services, to track patients and
their outcomes as they move through the system, and to provide appro-
priate outreach and marketing efforts to reach patients with special needs.
The allocations would specifically reward initiatives with demonstrated
commitment and capacity to improve access and health outcomes for
poor uninsured individuals in the community. Continuation of funding
would be based upon ongoing satisfactory performance and accountability.
· Eligibility for funding would include a maintenance of effort
requirement with documentation that the new funding would supple-
ment and not replace state or local funding already directed to this effort.
During the time the committee was completing its study, the U.S.
Department of Health and Human Services (DHHS), as part of its FY 2000
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14 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
budget request, proposed a five year initiative designed to increase the
capacity and effectiveness of the nation's health care safety net providers.
To begin this effort, $25 million in the form of grant funding was appro-
priated under the FY 2000 Appropriations Act. The committee believes
this new national program, the Community Access Program, which will
provide funding for approximately 20 communities in the coming year,
represents a good first step.
Recommendation 5. The committee recommends that technical
assistance programs and policies targeted to improving the
operations and competitive position of safety net providers be
enhanced and better coordinated.
Several federal agencies including the Health Resources and Services
Administration, the Health Care Financing Administration, the Substance
Abuse and Mental Health Services Administration, and the Centers for
Disease Control and Prevention currently provide technical assistance to
some safety net providers, but these funds are usually targeted exclu-
sively to the programs and organizations funded by the respective agen-
cies. The committee strongly believes that technical assistance funds
should promote capacity building and the management and operating
capabilities of all core safety net providers seeking to compete in a man-
aged care environment. Technical assistance programs should promote
rather than deter the development of partnerships and collaborations that
can contribute to these objectives.
The committee believes the following areas require specific attention:
· management of service delivery and implementation of changes,
including improvements in management information systems, appoint-
ment scheduling systems, patient telephone access, efforts to streamline
operations, and reengineering of services so that they are more respon-
sive to patients;
· development of new business skills such as negotiating managed
care contracts and developing marketing techniques to maintain and
expand the patient base of safety net providers;
· development and collection of reliable data on which to calibrate
rates and assign appropriate risks to develop appropriate reimbursement
systems; and
· nonmedical factors that affect utilization and health outcomes of
low-income and other vulnerable patients using the health care delivery
system (e.g., care-seeking behavior, cultural competence, and public
health interventions).
OCR for page 15
EXECUTIVE SUMMARY
15
CONCLUSIONS
The committee concludes that the safety net system is a distinct deliv-
ery system, however imperfect, that addresses the needs of the nation's
most vulnerable populations. In the absence of universal insurance cover-
age and while the new market paradigms are unfolding, it seems likely
that the nation will continue to rely on safety net providers to care for its
most vulnerable and disadvantaged populations.
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Representative terms from entire chapter:
net providers
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