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OCR for page 159
ThQ impact of ChungQ on
Vu~ncrnb~c Populations
At its first organizational meeting, the committee underscored the
importance of focusing its attention not only on assessing the future vi-
ability of safety net providers but also on how the major trends affecting
safety net providers may affect those vulnerable populations traditionally
dependent on these providers. In the committee's opinion, the future of
safety net providers will depend on whether vulnerable populations will
continue to believe that safety net providers can best serve their health
care needs under conditions of broader choice.
As has been outlined in other chapters of this report, vulnerable popu-
lations have been shown to have broader health care needs, comprise
individuals with a range of different cultural and socioeconomic back-
grounds, often use a set of providers different from the providers used by
the rest of the population, and have been shown to have more chronic
illnesses and comorbidities. The vast majority of Medicaid beneficiaries
cycle on and off insurance as their incomes and categorical eligibilities
change. The new and growing phenomenon of separating care for Medic-
aid enrollees from care for the uninsured population may seriously com-
promise the potential of managed care's primary objective: to improve
primary care and continuity of care. For these and other reasons the char-
acteristics of Medicaid managed care may be fundamentally different
from those of commercial managed care, given the varied and unique
159
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160 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
aspects of individual state Medicaid programs and the special character-
istics of the beneficiaries (Box 5.l).1
At this stage of restructuring of Medicaid managed care and health
system change, few reliable and consistent data are available to clearly
determine how vulnerable populations are faring in the new environ-
ment. Some excellent studies and surveys have been and continue to be
done in this area.2 Almost all the study findings, however, include cau-
tions and caveats given the continuing evolution of Medicaid managed
care and the many political, economic, and policy dynamics that affect
this market. In many parts of the United States the move to Medicaid
managed care still is in an early stage, and the full impact of a more
competitive, risk-based system has not yet come into play (Holahan et al.,
1998~. In addition, attempts to capture and assess the effects of current
changes on safety net clients highlight once again the wide variations
across the country in the structures and strengths of local safety net sys-
tems, the demand for their services, and the local cultures in which they
operate.
Another but related challenge is that in this turbulent market, evalu-
ations done 3 or 4 years ago may be dated and their findings overtaken by
new policies and politics. For example, in the early 1990s, such states as
Tennessee, Oregon, and Washington planned to use the savings produced
by Medicaid managed care to increase coverage for the uninsured popu-
lation (Lesser et al., 1997; Gold et al., 1995~. More recently, all these states
have had to reduce such efforts in face of mounting costs or a more con-
servative political climate (sizer et al., 1999; Marquis and Long, 1997~.
The state of Rhode Island took a slower and more cautious approach
toward the implementation of its Section 1115 waiver and has been able to
further expand its coverage of previously uninsured individuals (Hoag et
al., 1999~. A recent report on the evolution of TennCare illustrates a num-
ber of positive adjustments the program has made to address some of the
1The committee developed the information contained in Box 5.1 through a deliberative
process using the literature, expert hearings, and regional testimony. In each case, a list of
common factors was developed and field tested to establish content validity in consultation
with key informants from across the nation representing safety net providers, managed
care organizations, and state and local authorities.
2See The Urban Institute publications Assessing the New Federalism (Urban Institute, Wash-
ington, D.C.), which describes a multiyear project designed to analyze the Revolution of
responsibility for social programs from the federal government to the states. Also see Center
for Studying Health System Change publications (Center for Studying Health System
Change, Washington, D.C.) on how the health system is evolving in 60 communities across
the United States and the effects of those changes on people. See also the Henry J. Kaiser
Family Foundation and The Commonwealth Fund series Managed Care in Low-Income Popu-
lations: Lessonsirom Medicaid Managed Care in Five States.
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
16
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162 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
problems stemming from that state's very rapid implementation of the
TennCare program in 1994 (sizer et al., 1999~. In December 1999, however,
Blue Cross, which covers nearly half of TennCare's 1.3 million patients,
announced that it was pulling out of the program citing inadequate fund-
ing and unstable management of the program (Page, 2000~. In addition, in
fiscal year 2001, TennCare is projected to have a $382 million shortfall
(State Health Notes, 2000~. Given the evolving Medicaid managed care
market, assessments in this area appear to be particularly time-sensitive.
Despite these reservations, the existing literature provides useful in-
sights into current trends and emerging themes as they relate to how
Medicaid beneficiaries and other vulnerable populations are faring in the
new health care environment. This chapter reflects on some of the leading
forces driving the current environment of change and summarizes what
is known to date regarding the effects of these changes on the major users
of the health care safety net.
ACCESS, QUALITY, AND SATISFACTION
Access and quality of care in the traditional Medicaid program have
never been optimal. The literature shows that Medicaid beneficiaries have
historically faced financial and other barriers to care from private practi-
tioners and have had to rely on emergency departments and publicly
funded institutions for their health care services (The Kaiser Commission
on the Future of Medicaid, 1995; The Medicaid Access Study Group, 1994~.
Many of managed care's principal features its potential to strengthen
preventive services and care coordination, better case management, and a
clearly identifiable health care provider with overall patient management
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
163
responsibilities are generally viewed as holding promise for improving
access to care for a historically underserved population. In addition, the
savings that may be achieved through the use of managed care could be
reinvested to improve and enhance delivery of primary care services.
Yet the very characteristics that give managed care its power also give
the system a potent reason to discriminate against patients who are con-
sidered costly, difficult, or in some way "undesirable" (Rosenbaum et al.,
1997~. Like other managed care plans paid on a risk or capitated basis,
Medicaid managed care provides financial incentives to limit beneficiary
use of covered services deemed to be unneeded or inappropriate. Further-
more, because Medicaid beneficiaries may have little or no ability to
choose among managed care organizations, they may be less able to
express dissatisfaction by disenrolling from plans that arbitrarily deny
access to needed covered services (Frederick Schneiders Research, 1996~.
Incentives to economize on care could pose special problems for
Medicaid beneficiaries, an economically disadvantaged group without
the financial resources to purchase care directly. Many Medicaid benefi-
ciaries reside in medically underserved areas and often have more com-
plex health needs than higher-income Americans (Darrell et al., 1995~. In
addition, many Medicaid beneficiaries present with a range of other chal-
lenges, including illiteracy, inadequate social support, poor nutrition, and
problems with transportation and communication, that many health plans
are unprepared to address (Landon et al., 1998~.
A 1995 review of the literature concluded that Medicaid managed
care enrollees receive care that is at least comparable in quality to that
received by their fee-for-service counterparts (The Kaiser Commission on
the Future of Medicaid, 1995~. More recent studies on how managed care
affects access and satisfaction show mixed results. Surveys on quality and
satisfaction in Medicaid managed care conducted by researchers and state
Medicaid offices in a number of states (e.g., Wisconsin, Oregon, Maryland,
and New York) demonstrate evidence that beneficiaries in those states are
more satisfied with their health plans than fee-for-service enrollees are
(CareData Reports, 1997; Oregon Department of Human Resources, 1997;
Piper and Bartels, 1995; Sisk et al., 1996; United Hospital Fund, 1998~. A
survey of New York City Medicaid beneficiaries found that those in
Medicaid managed care were more likely than their fee-for-service Medic-
aid counterparts to rate their medical care as excellent (13 versus 7 per-
cent) or very good (23 versus 18 percent) (Sisk et al., 1996~. A Rhode
Island Department of Human Services assessment of RIte Care, presented
at a May 1998 committee workshop, showed that the program had im-
proved prenatal care and infant health outcomes (Christine Ferguson,
workshop testimony, May 1998~. Another study from Wisconsin indicates
that the Medicaid health maintenance organizations in that state provide
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164 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
superior preventive care for children and have better immunization rates
(Piper and Bartels, 1995~.
However, findings from a Henry I. Kaiser Family Foundation survey
of low-income adults in five states (Florida, Minnesota, Oregon, Tennes-
see, and Texas) found that Medicaid managed care enrollees were more
likely than low-income, privately insured managed care enrollees to be
poorer, have health problems, and experience access problems (Lillie-
Blanton and Lyons, 1998~. The study demonstrated that compared with
the low-income, privately insured populations and Medicaid fee-for-
service populations, Medicaid managed care enrollees show some im-
proved access to a regular provider but are more likely to be dissatisfied
with their health plans or experience more difficulty obtaining care.
A report on 21 focus groups that included low-income Medicaid ben-
eficiaries in five states found that Medicaid beneficiaries' reactions to
managed care depend in great part on their prior experience with seeking
health care (i.e., whether they were satisfied with their previous Medicaid
services) (Frederick Schneiders Research, 1996~. The experiences of Medic-
aid beneficiaries in managed care varied widely from state to state, by
economic status, by region within a state, and by other factors. Even in
states where beneficiaries had positive experiences, there were problems
if the switch to managed care was abrupt and poorly understood by the
beneficiaries.
The most frequently cited advantage that Medicaid beneficiaries ex-
perience in managed care is improved availability of primary care, but
the consistency of this trend across geographic areas and the sustainability
of this trend are open to question (Felt-Lisk et al., 1997a). Improved access
to primary care is closely associated with local market dynamics, rate
adequacy, contractual requirements, and adequate tracking and oversight
mechanisms.
Better access to primary care providers does not remove all access
problems. Problems related to making an appointment, obtaining spe-
cialty care, and receiving care after hours have been cited as potential
impediments to improved access. The issue of availability of care versus
actual accessibility and acceptability of care needs to be clarified and
better understood for the more complex and traditionally underserved
Medicaid population (Billings et al., 1998; Darnell et al., 1995~.
Several efforts have been initiated nationally to provide tools and
performance indicators for Medicaid. These include
· the Health Care Financing Administration's Quality Assurance
Reform Initiative;
· a Medicaid version of the Health Plan Employer Data and Infor-
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
165
mation Set, currently the tool most commonly used to assess health plan
performance;
· the Quality Improvement System for Managed Care, designed for
managed care plans that participate in Medicaid; and
· the Consumer Assessment of Health Plans (CAHP), a performance
measurement instrument based on consumer reports; although the core
CAHP model was designed for a general population, optional supple-
mentary modules were also designed for Medicaid enrollees.
All of these quality assurance mechanisms are evolving, and as yet,
little is known about the degree to which they will be effectively imple-
mented or standardized across health plans or how they will affect the
quality of care provided by each plan (Landon et al., 1998~. John Holahan
and colleagues looked at the status of Medicaid managed care quality
monitoring requirements as they are being developed and implemented
in the 13 states that are part of the Assessing the New Federalism project
(Holahan et al., 1998~. The survey found that to date there is no clear
evidence of the extent to which these standards are being enforced. An
early review of the impact of Section 1115 waiver programs in five states
reported that none of the states had sufficient data to routinely monitor
either baseline care patterns or changes in access (Gold et al., 1996~.
The transitional nature of Medicaid eligibility makes quality mea-
surement techniques more problematic. One of the major issues still to be
resolved in this area is determination of the appropriate balance between
federal quality assurance requirements and the flexibility of the states in
designing and implementing their own programs and standards in this
area.
As with other aspects of health care oversight and management, the
quality oversight and management capacities of the states vary enor-
mously. The Medicaid programs of some states are inadequately staffed
to assume many of the new contracting and management functions required
as Medicaid is transformed to a value-based purchaser. In implementing
mandated Medicaid managed care, some states failed to recognize the
importance of adequate preparation and resources for effective transition
(Gold and Aizer, 2000; Gold et al., 1996~. In part to compensate for uncer-
tainties and gaps in knowledge, the federal government and states are
imposing what many believe is an excessive and perhaps unproductive
layer of oversight and regulatory requirements (Maura Bluestone, Bronx
Health Plan, interview, December 1998; Hurley and McCue,1998~. Never-
theless, given past and more recent Medicaid marketing scandals and
quality abuses, there is considerable merit in developing stringent regula-
tions to safeguard Medicaid beneficiaries. With experience, states may be
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166 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
able to find a more streamlined, effective infrastructure for monitoring
and oversight.
NONFINANCIAL BARRIERS TO ACCESS TO HEALTH CARE
Whereas most Americans do not require outside assistance to access
and negotiate the medical system, vulnerable populations are likely to
experience nonfinancial barriers that may be impediments in their search
for care. These include lack of transportation and a shortage of providers
in rural and inner-city areas, language and culture, and prior experiences
with the medical system. Research shows that ensuring access for vulner-
able populations requires consideration of both financial and nonfinan-
cial barriers (Darrell et al., 1995; MDS Associates, Inc., 1994~.
Overcoming these impediments has often been accomplished through
the use of enabling services such as translation, transportation, outreach,
and case management services. There is preliminary evidence that the
move to capitated managed care, with its budget constraints, may affect
the continued availability of outreach and other important enabling ser-
vices (Felt-Lisk et al., 1997b; Hoag et al., l999~. In a more price-competitive
environment, these kinds of services are more difficult to justify in the
absence of hard evidence of their effectiveness and cost-effectiveness (Felt-
Lisk et al., 1997b; MDS Associates, 1994~. Comprehensive information on
enabling services is limited, and almost no information exists on how and
to what degree these services are being provided within managed care
organizations (MDS Associates, 1994; R. Kotelchuck, New York regional
meeting testimony, lanuary 1999~. An effort is under way to develop a
mechanism for collecting and monitoring data on the utilization and costs
of enabling and supportive services delivered by community-based health
care providers (American Express Tax and Business Services, 1999~. By
developing a standardized system for the tracking of enabling services,
community-based health care providers may be better able to establish
their value and negotiate reimbursement for these services from payers
including managed care organizations.
IMPROVING THE SCOPE AND CONTENT OF
BENEFICIARY CHOICE
The issue of plan and provider choice continues to be one of the major
lightning rods in the ongoing national debate over the perceived virtues
and vices of managed care. The concept of choice appears to be particu-
larly important to Americans not only in the selection of their health plan
and provider but as a larger societal value. Studies and surveys on the
issue of provider choice consistently indicate that people without a choice
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
167
at enrollment are substantially less satisfied with their plans and man-
aged care in general than people with choices (Fraser et al., 1998; Frederick
Schneiders Research, 1996; Gawande et al., 1998~. People without choice
have disproportionately lower incomes and work for small employers
(Fraser et al., 1998~.
The Balanced Budget Act (BBA) of 1997 allows states to limit most
Medicaid beneficiaries to a choice between two managed care organiza-
tions in urban areas and to a single plan in rural areas (Rosenbaum and
Darnell, 1997~. In neither cases does it require managed care organiza-
tions to give beneficiaries a choice among primary care physicians. Nor
does the BBA of 1997 require that managed care organizations contract
with physicians, hospitals, or clinics that have traditionally served low-
income families and with whom Medicaid beneficiaries may have estab-
lished a relationship. Nevertheless, a number of states have developed
incentives for plans to include traditional safety net providers.
For the majority of Medicaid beneficiaries, who are accustomed to the
fee-for-service system, learning how to navigate the managed care system
and choosing a plan can be a perplexing process (Molnar et al., 1996; U.S.
General Accounting Office, 1996~. Investing in resources that can be used
to educate beneficiaries and to counsel beneficiaries while they are choos-
ing a plan is essential. A number of studies have looked at state education
and enrollment policies and have concluded that no single consistent
strategy that outlines the optimal way to inform and protect Medicaid
beneficiaries as states transition to managed care can be defined (Horvath
and Kaye, 1996; Mollica et al., 1996; U.S. General Accounting Office, 1996~.
Nevertheless, current studies and surveys help to inform beneficiaries
about many of the critical issues related to education and enrollment. The
key lessons that have been learned from these assessments are summa-
rized in Box 5.2.
Many safety net providers believe that current marketing restrictions
negatively affect their enrollments and detract from patients' ability to
make informed choices (Kalkines, Arky, Zall and Bernstein, LLP, 1998~. A
study of New York City Medicaid managed care enrollees found that
individuals enrolled at provider sites were far more likely than other plan
members to understand plan procedures and to express satisfaction with
their care (Molnar et al., 1996~.
Even states with more comprehensive and sophisticated enrollment
systems find that some beneficiaries are hard to reach or do not make a
choice and are therefore automatically enrolled in a plan or assigned a
primary care provider. Conventional wisdom has held that the voluntary
versus the automatic enrollment rate is the best available indicator for
measuring the effectiveness of a state's education and enrollment strate-
gies (Maloy et al., 1998~.
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168 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
169
The U.S. General Accounting Office studied four states (Minnesota,
Missouri, Ohio, and Washington) viewed as having effective enrollment
programs (U.S. General Accounting Office, 1996~. Although these "best-
practice" states attempted to reach voluntary selection rates of 80 percent
or higher, in their actual experiences the rates have ranged from 59 to 88
percent (U.S. General Accounting Office, 1996~. Some states have auto-
matic enrollment rates of greater than 50 percent.
Recent research indicates that understanding the dynamics of auto-
matic enrollment and their implications for Medicaid beneficiaries is much
more complex than was originally perceived. There appears to be little
knowledge about whether, from a beneficiary's standpoint, automatic
enrollment is associated with less satisfaction, lower rates of access and
utilization, and less understanding of the managed care system (Maloy et
al., 1998~. Ongoing research in this area is beginning to show that auto-
matic enrollment rates may ultimately be less important than what Medic-
aid beneficiaries actually experience once they enroll in a plan. For exam-
ple, automatic enrollment may be less meaningful if a beneficiary's
provider participates in both plans being offered or beneficiaries know
that they can easily move out of a plan if they are not satisfied.
State enrollment policies often play two critical and potentially con-
flicting roles in Medicaid managed care, and both roles have major impli-
cations for beneficiaries. First, enrollment policies can play a vital role in
the goals of educating beneficiaries about their managed care options and
the selection of a plan of their choice. A high rate of voluntary enrollment
is viewed by states as an indicator that the goals are being achieved.
Second, automatic enrollment has been used by states as a vehicle to
create a market for new start-up plans or for special classes of providers
deemed important to the program. For example, such states as New York
and California use automatic enrollment as a way to steer patients to
safety net providers. As the Medicaid managed care market matures and
states improve their enrollment practices, the rate of automatic enroll-
ment will likely decline. In light of the recent exit of commercial plans
from the Medicaid market, some states may continue to rely on automatic
enrollment as a lever to attract certain plans to the program.
HOW EFFECTIVE ARE CURRENT ENROLLMENT
AND CHOICE POLICIES?
The ultimate test of any education and enrollment strategy is how
well it works in helping beneficiaries make informed and meaningful
choices. Unfortunately, there has been a dearth of evaluations, and strong
performance measures of effective education and enrollment efforts are
not available (U.S. General Accounting Office, 1996~. Voluntary disenroll-
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170 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
ment rates tend to be low (3 percent or less) and too small for meaningful
aggregate analysis (information about individual disenrollment decisions
may be more useful) (Horvath and Kaye, 1996~. Until now, most state
Medicaid programs have focused primarily on threshold dimensions of
managed care (e.g., how managed care differs from the fee-for-service
system, the difference between mandatory and voluntary enrollment,
enrollment guidelines, and the scope of beneficiary protections). Although
this information is useful and relevant for beneficiaries, numerous studies
have shown that Medicaid patients care less about what plan they can
join than about whether they will have access to a specific provider or
group of providers (Ku and Hoag, 1998~. However, timely and accurate
participating provider lists are not routinely available to enrollees. A
recent United Hospital Fund survey of New York City Medicaid benefi-
ciaries showed that 46 percent of managed care enrollees reported that
they had not received a provider list (Cantor et al., 1997~. Beneficiaries are
also interested in information on their covered benefits, but about 25
percent of those surveyed thought that their benefits would expire if they
did not sign up for a plan (Cantor et al., 1997~. A study on state enrollment
systems being conducted by the Center for Health Services Research and
Policy at The George Washington University found that a lack of informa-
tion about providers and plan networks consistently precluded meaning-
ful Medicaid beneficiary choice during enrollment (Maloy et al., 1998~.
Medicaid beneficiaries report that their most valued and trusted
sources of information about their choice of plans were their providers or
community-based organizations (Maloy et al., 1998; U.S. General Account-
ing Office, 1996~. However, although the Medicaid and uninsured popu-
lations often have an array of special needs, most states do not provide
much comparative information about providers' capacities to meet those
needs (Fraser et al., 1998~.
MAINSTREAMING
Mainstreaming is often cited as a goal in extending managed care to
vulnerable populations. The Medicaid program originally sought to bring
low-income Americans into the mainstream of medical care, moving them
away from their almost exclusive reliance on safety net providers. In
reality, Medicaid has fallen far short of that goal. Because of its low pay-
ment rates and socially unpopular clientele, the program has for the most
part failed to attract the participation of a broad range of providers, par-
ticularly for primary care (The Medicaid Access Study Group, 1994~. A
more price-competitive health care landscape has made Medicaid a more
attractive payer to the commercial sector. To compensate for shrinking
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
171
revenues, commercial plans and providers have focused on enlarging
market share and the number of covered lives.
Many HMOs were initially attracted to the Medicaid market as an
opportunity to quickly increase revenues, but other reasons also prevailed.
Several states, including Minnesota, require HMOs to serve the Medicaid
population as a condition for offering a commercial product to state em-
ployees. Plans also use the Medicaid market to expand and leverage their
provider networks or as a beachhead from which they can increase their
market share of other payers. Finally, certain plans participate in Medic-
aid to be viewed as good corporate citizens in their communities (Hurley
and McCue, 1998~.
In the early l990s commercial plans had yet other incentives for com-
mercial plans to participate in Medicaid managed care. Before 1994, enroll-
ment in managed care had mainly remained voluntary and reimburse-
ment rates were relatively generous (Bovbjerg and Marsteller, 1998;
Hurley and McCue, 1998~. Some states actively sought commercial plans'
involvement in the Medicaid market as a way to mainstream low-income
beneficiaries and to move away from a perceived two-tier health care
system.
In a number of states the entry of commercial plans may have contrib-
uted to the broadening of access to primary care. According to focus
groups, some Medicaid beneficiaries "felt the advantage of high-quality
doctors" or appreciated the chance to "see mainstream providers in main-
stream delivery settings" (Frederick Schneiders Research, 1996~. These
observations are tempered by evidence and testimony heard by the com-
mittee that some beneficiaries return to seek care from their traditional
providers with whom they feel more comfortable and accepted (Kalkines,
Arky, Zall and Bernstein, 1998; West, 1999; Florida site visit testimony,
April 1998~. There appear to be no reliable data, however, on the number
of Medicaid patients who leave their traditional providers to join other
managed care organizations or on the number who return to traditional
providers after having been enrolled in a commercial plan.
Experience is beginning to show that mainstreaming is not easily
accomplished and, to the degree that it exists, that it must occur on two
levels: both the plan and the provider levels (Hurley and McCue, 1998~.
Medicaid beneficiaries' enrollment in a commercial plan is no guarantee
that they will have access to the same network of providers as their
counterparts whose premiums are paid by private payers, particularly for
referral and specialty care services (Marsteller, 1998~. Even when states
have attempted to regulate equity of access, enforcement of such provi-
sions has proved problematic for state officials, given the technical com-
plexity of assessing even the basic adequacy of a network (Fagan and
Riley, 1998~. More research is needed on how participation by commercial
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172 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
plans influences access to mainstream care and how it affects quality
(Kaye et al., 1999~.
Regardless of the intrinsic merits of mainstreaming Medicaid benefi-
ciaries as a policy objective, efforts to move in this direction may be losing
some momentum. In the past 2 years, several large commercial plans
have exited from all or major segments of the Medicaid market, citing rate
inadequacy, rate volatility, and administrative burdens associated with
government requirements, as indicated in two studies (Hurley and
McCue, 1998; McCue et al., 1999~. Those studies examined the financial
performances of health plans and interviewed a number of Medicaid
managed care plan executives. Many of the managed care plan executives
admitted that their predominantly commercial plans probably would not
be able to surpass the growing Medicaid-only plans in customizing their
services for Medicaid beneficiaries. These executives expressed concern,
however, over the long-term ability of Medicaid-only plans to provide
high-quality care for their beneficiaries given these providers' dependence
on Medicaid revenues and their having to accept whatever rates would be
meted out.
Traditional safety net providers have claimed that they see more
patients with greater health risks than do their counterparts in commer-
cial plans. There is some evidence that when marketing to Medicaid ben-
eficiaries commercial plans focus their efforts on the healthier segments of
this population, particularly pregnant women (Gaskin et al., 1998~. A
recent study examining the services and status of Oregon's health care
safety net conducted by Milliman and Roberston for the Office for Oregon
Health Plan Policy and Research sheds some additional light on this ques-
tion (Oregon Department of Administrative Services, 1999~. The study's
findings confirm that, in general, both safety net and mainstream clinics
find Medicaid patients to be more difficult to serve. The study found,
however, that the state's safety net plan, CareOregon, and its clinics saw a
sicker population than mainstream plans in three categories and that the
reimbursements that these providers received were low relative to the
costs of providing such care. In addition, although enabling services were
offered in both mainstream plans and CareOregon, the study suggests
that safety net clinics are more effective than mainstream clinics at deliv-
ering enabling services to Medicaid patients who have special needs.
Another study comparing the quality management practices of health
plans participating in Medicaid managed care found that Medicaid plans
are more likely than commercial plans to target programs directed to the
specific needs of the Medicaid population (Landon and Epstein, 1999~.
The study concludes, however, that neither commercial nor Medicaid
plans showed notable strong records in actual quality improvement.
The results of the analysis of the Oregon health care safety net as well
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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
173
as other research highlight the importance of adequate risk adjustment
methodologies not only to promote fairer competition among health plans
but also to help ensure that consumers have an adequate choice of provid-
ers in their markets (Bovbjerg and Marsteller, 1998~. Currently, premiums
are usually adjusted for age, gender, and geographic regions, but there is
growing interest in adjusting payments for the health status of enrollees.
More refined risk adjustment will better compensate plans that enroll
higher-risk or sicker patient populations and reduce incentives for select-
ing only healthier enrollees. At this time only two states, Colorado and
Maryland, incorporate health-based risk-adjustment systems into their
capitation rates (Holahan et al., 1999~. In the absence of adequate risk
adjustment, states have opted to carve out certain services from health
plans' benefits packages or to include stop-loss provisions in their con-
tracts with managed care organizations.
THE UNINSURED POPULATION
By any measure, the growing number of uninsured people, 18.4 per-
cent of the country's total nonelderly population and more than 30 per-
cent of the nation's low-income individuals in 1998, is the most serious
and troublesome by-product of the new health care paradigm. In a market-
driven environment the uninsured, who do not represent a market force,
are excluded.
A range of research has shown that relative to insured people, un-
insured people are much more likely to have unmet health care needs, are
less likely to have a usual source of care, have lower rates of health care
use, and experience worse health outcomes, including increased rates of
mortality. Individuals without health care coverage have long been a
public policy concern for a nation whose coverage system is largely built
on employment status or eligibility for publicly financed programs. The
combination of eroding employment-based coverage, changing demo-
graphics, welfare reform, the shrinking ability on the part of health care
providers to cross-subsidize the costs of health care, and the move to
Medicaid managed care has raised the problem of this nation's uninsured
to what many perceive to be a critical juncture. State programs directed at
improving access for the uninsured have been developed in such states as
Oregon, Washington, and Minnesota. Although these efforts have been
shown to improve the levels of access, each of these programs is facing
funding problems and has had to limit some of the original objectives
(Lipson and Naierman, 1996~.
Although most of the published literature indicates that safety net
providers have been able to maintain their commitment to the uninsured
population, recent anecdotal evidence indicates that a weakened safety
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174 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
net is beginning to reduce the standby protection for those who remain
uninsured. Safety net providers are treating a growing number of unin-
sured patients whereas the number of paying patients is declining and the
payments for them are being reduced. In some communities, uninsured
patients are having to wait longer or must be sicker to get an appoint-
ment, and some services offered previously are no longer available (Baxter
and Feldman, 1999~. In their review of safety net hospitals and commu-
nity health centers in 12 communities, Baxter and Feldman found evi-
dence that some of these providers were being forced to limit access to
health care services because of the growing demand for services for the
uninsured population. Reductions in Medicaid disproportionate share
hospital payments, restructuring of state charity pools in Newark, New
lersey, and Boston, Massachusetts, and the changing insurance status of
immigrant populations in Miami, Florida; Orange County, California; and
Phoenix, Arizona, are forcing providers in these communities to reduce
the level of access for the uninsured population (Baxter and Feldman,
1999~.
INNOVATIVE NEW APPROACHES TO CARE
FOR THE UNINSURED POPULATION
A positive sign on the current horizon is experimentation with man-
aged care approaches to providing care for the indigent uninsured popu-
lation. The first and best-known model for using managed care to provide
access to health care to the uninsured population was established in
Tampa, Florida, in 1991 (Lipson et al., 1997; Norton and Lipson, 1998~.
Faced with a rising number of poor workers and high-risk individuals
without insurance, Hillsborough county petitioned the Florida Legisla-
ture for authority to levy a half-cent sales tax to help finance access within
a coordinated system of care. Contracting on a competitive basis with
networks of community health centers, hospitals, and other providers,
Hillsborough HealthCare now serves an estimated 25,000 people. Accord-
ing to testimony heard during the committee's site visit, Hillsborough
HealthCare has contributed to a marked lowering of hospitalizations for
diabetes and asthma complications through improved access to primary
care and reduced emergency department expenditures (Patricia Bean,
Hillsborough County Health Plan, Florida regional meeting testimony,
April 1998; Commissioner Thomas Scott, Hillsborough County Board of
Commissioners, Florida regional meeting testimony, April 1998~. For its
success, the program has received the "Models that Work" award from
the Health Resources and Services Administration for innovative health
improvement programs. Similar programs that link uninsured people to
a primary care provider or medical home to coordinate their care have
OCR for page 175
THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS
175
been started by public hospitals in Indianapolis, Boston, and Bextar
County, Texas.
The success of Hillsborough as a model that could be replicated in
other parts of the country was an important catalyst behind the launching
of a major new $16.8 million initiative, Communities in Charge: Financing
and Delivering Health Care to the Uninsured, sponsored by the Robert
Wood Johnson Foundation. The program is designed to help a broad-
based consortia of organizations in the community develop and imple-
ment managed care delivery systems for low-income, uninsured indi-
viduals, emphasizing prevention and early intervention.
Similarly, the W.K. Kellogg Foundation's Community Voices pro-
gram is another major philanthropic-sponsored effort targeted to sustain-
ing, improving, and expanding health care for the uninsured populations.
Begun in 1998, Community Voices seeks to ensure the survival of safety
net providers and strengthen community support services, "given the
unlikely prospect of achieving universal health coverage in the next 5
years" (Community Voices, 2000~. Thirteen diverse communities-
selected to serve some of the hardest-to-reach underserved populations-
have received grants to serve as laboratories of change to sort out what
works from what does not in meeting the needs of those who receive
inadequate or no health care.
OTHER CHALLENGES
AS previous studies have shown, although health insurance coverage
is an important component of ensuring access to care, it is not the only
factor. A new study that looked at changes in access to care from 1977 to
1996 indicates that during this time access to a usual source of care has
declined sharply for Hispanics and young adults aged 18 to 24 (Zuvekas
and Weinick, 1999~. However, no more than 20 percent of the change in
access could be explained by declines in rates of health insurance cover-
age. Demographic changes, large decreases in rates of access among the
uninsured population, and, for young adults, decreased rates of access
among those with insurance were shown to be important contributing
factors.
Other dynamics associated with a more competitive, price-based
environment, such as conversion, consolidation, and privatization, in the
future may add new pressures to an already tenuous national capacity to
serve the vulnerable and uninsured populations. Although recent reports
on conversions and privatization indicate that access for low-income
patients is not yet seriously degraded, those studies and surveys attest to
a changing and unstable environment that requires more active attention
and monitoring (Needleman et al., 1997~.
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176 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED
As part of the new managed care requirements and as a means of
survival in a more competitive environment, traditional providers are
being compelled to place greater emphasis on performance, development
of a more customer-responsive environment, and more efficient opera-
tions. To the degree that improvements in this area continue, the move to
managed care will benefit the care of the nation's most vulnerable citi-
zens. Inadequate capitation rates and declining subsidies, however, may
quickly erode this potential, particularly given the rising number of un-
insured people and the tenuous hold that these providers have in balanc-
ing their missions and margins.
Medicaid managed care in many ways can be likened to a halfway
technology: a concept that has significant potential but one that is as yet
hamstrung by programs and policies that blight the promise. Instead of
pursuing mainstreaming as an objective per se, giving beneficiaries access
to quality providers under conditions of informed choice may be a more
relevant and meaningful goal for certain vulnerable populations. In a
competitive, cost-driven marketplace and in the absence of a national
policy on the uninsured population, a quality provider for vulnerable
populations must be a provider or plan that will ensure some continuity
of care as individuals cycle on-and-off coverage.
Only a stronger national commitment directed to the problem of the
nation's growing number of uninsured people will help fulfill the true
promise of managed care for America's low-income populations. Never-
theless, there will always be some Americans whose vulnerabilities and
special needs will exceed the capabilities of the services that can be pur-
chased with a health insurance card alone.
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Representative terms from entire chapter:
safety net
