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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

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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. REFERENCES Aizer, A., Gold, M., and Schoen, C. 1999. Managed Care and Low-Income Populations: Four Years' Experience with Tenncare. Washington, DC: The Henry J. Kaiser Family Founda- tion. American Express Tax and Business Services. 1999. Enabling and Supportive Services: Defini- tion and Cost Calculation. New York, NY: American Express Tax and Business Services, Inc. Baxter, R., and Feldman, R. 1999. Staying in the Game: Health System Change Challenges Care for the Poor. Fairfax, VA: Center for Studying Health System Change. Billings, J., Greene, J., and Mijanovich, T. 1998. Analysis of Primary Care Practitioner Capacity for Medicaid Managed Care in New York City. New York, NY: Wagner School of Public Health, New York University. Bovbjerg, R., and Marsteller, J. A. 1998. Health Care Market Competition in Six States: Implica- tionsfor the Poor. Paper No. 17. Washington, DC: The Urban Institute. Cantor, J., Weiss, E., Haslanger, K., Madala, J., Heisler, T., Kaplan, S., and Billings, J. 1997. Ambulatory Care Providers and the Transition to Medicaid Managed Care in New York City. New York, NY: United Hospital Fund and New York University. CareData Reports. 1997. Medicaid HMO Survey Report. White Plains, NY: CareData Reports.

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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS 177 Community Voices. 2000. About Community Voices [WWW document].URL: http:// www.community voices.org/aboutcommunity.html (accessed February 28, 2000~. Darnell, J., Rosenbaum, S., Scarpulla-Nolan, L., Zuvekas, A., and Budetti, P. 1995. Access to Care Among Low-Income, Inner-City, Minority Populations: The Impact of Managed Care on the Urban Minority Poor and Essential Community Providers. Washington, DC: Center for Health Policy Research, The George Washington University. Fagan, A., and Riley, T. 1998. The KAISER-HCFA State Symposia Series: Transitioning to Medic- aid Managed Care. Portland: ME: National Academy for State Health Policy. Felt-Lisk, S., Harrington, M., and Aizer, A. 1997a. Medicaid Managed Care: Does It Increase Primary Care Services in Underserved Areas. Washington, DC: Mathematica Policy Research, Inc. Felt-Lisk, S., Harrington, M., and Aizer, A. 1997b. Availability of Primary Care Services under Medicaid Managed Care: How 14 Health Plans Provide Access and the Experience of 23 Safety Net Providers and their Communities. Washington, DC: Mathematica Policy Research, Inc. Fraser, I., Chait, E., and Brach, C. 1998. Promoting Choice: Lessons from Managed Medic- aid. Health Affairs, 17(5), 165-174. Frederick Schneiders Research. 1996. Medicaid and Managed Care: Focus Group Studies of Low- Income Medicaid Beneficiaries in Five States. Washington, DC: The Henry J. Kaiser Family Foundation. Gaskin, D., Hadley, J., and Freeman, V. 1998. Are Urban Safety Net Hospitals Losing the Com- petition for Low Risk Medicaid Patients? Washington, DC: Institute for Health Care Research and Policy, Georgetown University. Gawande, A., Blendon, R., Brodie, M., Benson, J., Levitt, L., and Hugick, L. 1998. Does Dissatisfaction with Health Plans Stem from Having No Choices? Health Affairs, 17~5), 184-194. Gold, M., and Aizer, A. 2000. Growing an Industry: How Managed Is TennCare's Managed Care? Health Affairs, 19~1), 86-101. Gold, M., Frazer, H., and Schoen, C. 1995. Managed Care and Low-Income Populations: A Case Study of Managed Care in Tennessee. Washington, DC: The Henry J. Kaiser Family Foun- dation and The Commonwealth Fund. Gold, M., Sparer, M., and Chu, K. 1996. Medicaid Managed Care: Lessons from Five States. Health Affairs, 15~3), 153-166. Hoag, S., Norton, S., and Raj an, S. 1999. Effects of Medicaid Managed Care Demonstrations on Safety Net Providers in Hawaii, Rhode Island, Oklahoma, and Tennessee. Princeton, NJ: Mathematica Policy Research, Inc. Holahan, J., Zuckerman, S., Evans, A., and Rangaraj an, S. 1998. Medicaid Managed Care in Thirteen States. Health Affairs, 17~3), 43-63. Holahan, J., Rangarajan, S., and Schirmer, M. 1999. Medicaid Managed Care Payment Rates in 1998. Health Affairs, 18~3), 217-227. Horvath, J., and Kaye, N. 1996. Enrollment and Disenrollment in Medicaid Managed Care Pro- gram Management. Portland, ME: National Academy for State Health Policy. Hurley, R., and McCue, M. 1998. Medicaid and Commercial HMOs: An At-Risk Relationship. Princeton, NJ: Center for Health Care Strategies, Inc. The Kaiser Commission on the Future of Medicaid. 1995. Medicaid and Managed Care: Lessons from the Literature. Washington, DC: The Henry J. Kaiser Family Foundation. Kalkines, Arky, Zall and Bernstein, LLP. 1998. Safety Net Plans: The Role of Provider-Sponsored Health Plans in Maintaining the Safety Net in a Managed Care Era. New York, NY: United Hospital Fund. Kaye, N., Pernice, C., and Pelletier, H. (eds.~. 1999. Medicaid Managed Care: A Guidefor States, 4th ed. Portland, ME: National Academy for State Health Policy.

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178 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED Ku, L., and Hoag, S. 1998. Medicaid Managed Care and the Marketplace. Inquiry, 35, 332- 345. Landon, B., and Epstein, A. 1999. Quality Management Practices in Medicaid Managed Care: A National Survey of Medicaid and Commercial Health Plans Participating in the Medicaid Program. JAMA, 282~18), 1769-1775. Landon, B., Tobias, C., and Epstein, A. 1998. Quality Management by State Medicaid Agen- cies Converting to Managed Care. JAMA, 279~3), 211-216. Lesser, C., Duke, K., and Luff, H. 1997. Care for the Uninsured and Underserved in the Age of Managed Care. New York, NY: The Commonwealth Fund. Lillie-Blanton, M., and Lyons, B. 1998. Managed Care and Low-Income Populations: Recent State Experiences. Health Affairs, 17~3), 238-247. Lipson, D., and Naierman, N. 1996. Effects of Health System Changes on Safety-Net Pro- viders. Health Affairs, 15~2), 33-48. Lipson, D., Norton, S., and Dubay, L. 1997. Health Policy for Low-Income People in Florida. Washington, DC: The Urban Institute. Maloy, K., Silver, K., Darnell, J., Rosenbaum, S., Kreling, B., and Kenney, K. 1998. Results of a Multi-Site Study of Mandatory Medicaid Managed Care Enrollment Systems and Implica- tions for Policy and Practice. Washington, DC: Center for Health Policy Research, The George Washington University. Marquis, S., and Long, S. 1997. Federalism and Health System Reform. Prospects for State Action. JAMA, 278~6), 514-517. Marsteller, J. 1998. Impact of Restriction of Insurance Premiums on Rates of Insurance and Uninsurance. Washington, DC: The Urban Institute. MDS Associates. 1994. Enabling Services: What We Know and What Remains to Be Learned. Washington, DC: Office of the Assistant Secretary for Health, U.S. Department of Health and Human Services. McCue, M., Hurley, R., Draper, D., and Jurgensen, M. 1999. Reversal of Fortune: Commer- cial HMOs in the Medicaid Market. Health Affairs, 18~1), 223-230. The Medicaid Access Study Group. 1994. Access of Medicaid Recipients to Outpatient Care. New England Journal of Medicine, 330~20), 1426-1430. Mollica, R., Riley, T., Horvath, J., and Kaye, N. 1996. Transitioning to Medicaid Managed Care. Consumer Protection: Lessons Learned from States. Portland, ME: National Academy for State Health Policy. Molnar, C., Soffel, D., and Brandes, W. 1996. Knowledge Gap: What Medicaid Beneficiaries Understand and What They Don't About Managed Care. New York, NY: Community Ser- vice Society of New York. Needleman, J., Chollet, D., and Lamphere, J. 1997. Hospital Conversion Trends. Health Affairs, 16~2), 187-195. Norton, S., and Lipson, D. 1998. Public Policy, Market Forces, and the Viability of Safety Net Providers. Occasional Paper No. 13. Washington, DC: The Urban Institute. Oregon Department of Administrative Services. 1999. Analysis of Oregon Health Care Safety Net Services. Salem, OR: Office for Oregon Health Plan Policy and Research, Oregon Department of Administrative Services. Oregon Department of Human Resources. 1997. Progress Report: The Oregon Health Plan Medicaid Reform Demonstration, Part I. Salem, OR: Office of Medical Assistance Pro- grams, Oregon Department of Human Resources. Page, L. 2000. Blues Plan Throws in Towel, Leaves Troubled TennCare. American Medical News, 43~1), 1, 34. Piper, K., and Bartels, P. 1995. Results from Wisconsin Suggest that HMOs Are More Effec- tive than Fee-for-Service in Primary and Preventative Health Care. Public Welfare, 53~2), 18-21.

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THE IMPACT OF CHANGE ON VULNERABLE POPULATIONS 179 Rosenbaum, S., and Darnell, J. 1997. A Comparison of the Medicaid Provisions in the Balanced Budget Act of 1997 (P.L. 105-33) with Prior Law. Washington, DC: The Henry J. Kaiser Family Foundation. Rosenbaum, S., Serrano, R., Magar, M., and Stern, G. 1997. Civil Rights in a Changing Health Care System. Health Affairs, 16~1), 90-105. Sisk, J., Gorman, S., Glied, S., DuMouchel, W., and Hynes, M. 1996. Evaluation of Medicaid Managed Care: Satisfaction, Access, and Use. JAMA, 276~1), 50-55. State Health Notes. 2000. TennCare: Once Again, on the Brink of Change. State Health Notes, 21~317), 8. United Hospital Fund. 1998. Utilization, Access, and Satisfaction Under Voluntary Enrollment [WWW document]. URL: http: / /www.uhfnyc.org/archive/cur/ curv3n4.html#2 (accessed March 7, 2000~. U.S. General Accounting Office. 1996. Medicaid: States' Efforts to Educate and Enroll Beneficia- ries in Managed Care. Gaithersburg, MD: U.S. General Accounting Office. West, D. 1999. Medicaid Managed Care: Linking Success to Safety-Net Provider Recruit- ment and Retention. Journal of Ambulatory Care Management, 22~4), 28-32. Zuvekas, S., and Weinick, R. 1999. Changes in Access to Care, 1977-1996: The Role of Health Insurance. Health Services Research, 34~1), 271-279.