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ThQ COrQ SOIQTY NQ! And the SOfQtY NQ! SYSIQm The concept of a health care safety net conjures up the image of a tightly woven fabric of federal, state, and local programs stretched across the nation ready to catch those who slip through the health insurance system. As has already been cited in the opening chapter of this study, America's safety net is neither secure nor uniform. Rather, it varies greatly from state to state and from community to community, depending on the number of uninsured people, the local health care market, the breadth and depth of Medicaid and other programs directed at the poor and uninsured populations, as well as the general political and economic envi- ronment (Baxter and Mechanic, 1997~. These variations notwithstanding, most communities can identify a set of hospitals and clinics that by man- date or mission care for a proportionately greater share of poor and uninsured people. Even within the new environment of choice and com- petition, these core safety net providers continue to be relied upon to play a critical role in providing access to health care for those who fall outside the market, primarily members of the nation's poorest and most dis- advantaged groups. A precise measure of the total share of care to the poor and uninsured populations delivered by safety net providers is difficult to come by, given the safety net's variability across communities, the lack of adequate and comparable data, as well as the lack of a consistent definition of the "health care safety net." Estimates show, however, that although core safety net providers such as community health centers (CHCs) and public hospitals provide a relatively small share of care to the poor and un- 47

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48 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED insured, that share is disproportionate to that provided by other health care providers. For example, 41 percent of federally qualified health center (FQHC) patients are uninsured, 33 percent are on Medicaid, 86 percent are low income, and 64 percent are people of color (Bureau of Primary Health Care, 1998~. For outpatient clinics that are members of the National Association of Public Hospitals and Health Systems (NAPH),~ 42 percent of care is to self-paying patients or patients requesting charity care and 30 percent is to Medicaid patients (National Association of Public Hospitals and Health Systems, 1999~. From 1990 to 1998, FQHCs saw a 60 percent increase in the number of uninsured patients that they treated (Bureau of Primary Health Care, 1990, 1998~.2 As part of their unique role and mission, core safety net providers offer a combination of comprehensive medical and enabling or "wrap- around" services (e.g., language interpretation, transportation, outreach, and nutrition and social support services) specifically targeted to the needs of the vulnerable populations. These services rarely generate sufficient revenues to cover their costs and are thus less likely to be provided by others in the community at large. Together with their commitment to the care for the poor and uninsured, core safety net hospitals and health systems offer critical highly specialized services such as trauma care, burn care, and neonatal care to anyone in their communities. For example, in 1997, NAPH members represented 17 percent of hospital beds in the markets but provided more than 25 percent of neonatal intensive care beds, 66 percent of burn care beds, 33 percent of pediatric intensive care beds, 45 percent of Level 1 trauma centers, and 24 percent of emergency department visits (National Association of Public Hospitals and Health Systems, 1999~. In addition, major public teaching hospitals train large numbers of physicians and other health professionals. In 1997, for example, NAPH member hospitals trained almost 16,000 residents (National Association of Public Hospitals and Health Systems, 1999~. Another major characteristic of core safety net providers is their neg- ligible ability to shift costs, given their payer and patient mix. Cost shift- ing has, until recently, been a primary vehicle used by non-core safety net providers as a means of subsidizing care for the uninsured population (Cunningham et al., 1999; Davis et al., 1999~. However, core safety net providers tend to have a small privately insured patient population, and GRAPH represents over 100 safely net hospitals and health systems in metropolitan areas around the country. Most members are major [caching hospitals or academic health science centers. 2The 60 percent increase from 1990 to 1998 also reflects the expansion of the CHC pro- gram to include homeless and public housing programs, adding 400,000 to 500,000 users, most of whom are uninsured (Bonnie Lefkowitz, personal communication, February 2000~.

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 49 unlike their non-core safety net counterparts, these providers must rely primarily on federal, state, and local grant funds and other forms of direct- subsidy payments to provide care for the poor (e.g., charitable contribu- tions and donations) (Davis et al., 1999; Rosenbaum, 1999~. This inability to shift costs for uncompensated care onto private insur- ance revenues has become an even more significant problem as revenues from Medicaid, the primary source of third-party financing for the core safety net providers, are restricted. Medicaid is a central rather than mar- ginal third-party payer for the core safety net (Rosenbaum, 1999~. As a result, if future Medicaid revenues decline (whether because of a drop in the rate of coverage among the patient population or a drop in payment levels for the patient population), core safety net providers must effec- tively absorb this loss through the use of revenues and services intended to provide care for those without the ability to pay. Moreover, unlike private practitioners, core safety net providers cannot pass on their rev- enue shortfalls in the form of patient cost sharing. Not only do the patients of core safety net providers have little or no ability to pay, but the legal or mission-based obligations of the safety net providers prevent this reallo- cation of financial responsibilities. Two Medicaid compensation systems the disproportionate share hospital (DSH) payment program in the case of hospitals, and the FQHC program in the case of federally funded health centers and certain other entities have in the past yielded Medicaid compensation levels for the core safety net that help avoid shifting costs by use of grants and subsi- dies intended to provide care for the uninsured population. For example, in the case of health centers, the FQHC payment structure has contributed to closer parity between health centers' Medicaid patients and their Med- icaid revenues (Figure 2.1~. To the extent that these payment arrange- ments are eliminated or reduced, core safety net providers necessarily will confront the implications of their eroding canacitv to treat uninsured individuals (Felt-Lisk et al., 1997~. Against this background, this chapter provides a description of the core safety net providers and other providers in the safety net system including their patient and payer profiles, their unique structural charac- teristics, missions, and core competencies, and how the structures and organizations of safety net systems vary across the country. THE HEALTH CARE SAFETY NET Characteristics of Populations Served by the Core Safety Net Poor people who are uninsured, are of minority and immigrant status, live in geographically or economically disadvantaged communities, or

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50 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED ~ Other ~ Uninsured Medicare ~ Medicaid 100 1 14% 75 - Cal 50- 25 - O ~ Other ~ Medicare Self-Pay/ ~ Federal Grants Patient Collections ~ Medicaid 18% 20% 1985 1 997 Patients 5% _ _ 1 1 6%- 27% 1985 1 997 Revenues FIGURE 2.1 Changes in health center Medicaid and uninsured patients by revenue source, 1985-1997. SOURCE: The Kaiser Commission on Medicaid and the Uninsured (2000~. Data from Center for Health Services Research and Policy analysis of 1997 Uniform Data System and estimates by the National Association of Community Health Centers using 1985 Bureau of Common Reporting Require- ments data. Reprinted with permission of The Kaiser Commission on Medicaid and the Uninsured. have a broad range of social, demographic, and poverty-related health problems must rely disproportionately on the core safety net for their health care (Box 2.1~. For some, the primary barrier is a lack of insurance coverage. In recent years the number of uninsured individuals has grown because the cost of employment-based health insurance has become unaffordable for many low-income people and because fewer people are enrolled in Medicaid (Kronick and Gilmer, 1999~. Many low-income indi- viduals (especially Medicaid beneficiaries and low-income workers with unstable employment) move on and off of insurance. Almost two-thirds of new Medicaid enrollees lose their coverage with a year and many go on to prolonged spells without insurance (Carrasquillo et al., 1998~.

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 5 For those enrolled in Medicaid, traditionally low levels of payments to providers of health care resulted in limited and skewed provider par- ticipation, forcing many low-income patients to seek episodic care from emergency departments and hospital clinics. Medicaid coverage is often severely limited for some services such as pharmaceuticals, mental health treatment, and substance abuse treatment. Still other populations have special needs or circumstances that can create impediments to care, such as homelessness or complex health prob- lems, like mental illness or human immunodeficiency virus (HIV) infec- tion/AIDS (see Chapter 6 for an expanded discussion of populations with special needs). Insurance coverage alone is often inadequate to ensure access for these populations who may require outreach and access to specialists or other support programs to meet their special needs.

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52 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED Core safety net providers offer these populations a combination of essential health and social services that go beyond those provided in the commercial insurance model. Many core safety net providers have tai- lored their services to meet the needs of such medically underserved populations as minority communities and non-English-speaking indi- viduals, groups that are more likely to lack insurance coverage. Using data from the 1997 Current Population Survey and controlling for poverty and employment status, a study by The Commonwealth Fund indicated that adult minorities ages 18-64 are more likely than their white counterparts to be uninsured, suggesting that reliance on the private health insurance market may not result in substantial improvements in coverage rates for minorities (Hall et al., 1999~. This means that there will continue to be a disproportionate number of minority individuals who depend on the safety net for care. A study that compared urban safety net hospitals and non-safety net hospitals in the same market areas showed dramatic concentrations of African-American and Hispanic patients at safety net hospitals relative to the concentrations at non-safety net hospi- tals in the market area (Gaskin, 1996) (Figure 2.2~. Among public hospitals in New York City, minority patients accounted for 90 percent of outpa- tient visits and 88 percent of admissions in 1995 (Siegel, 1996~. Similarly, nearly two-thirds of all FQHC patients in 1998 were minorities, more than 85 percent had incomes less than 200 percent of the federal poverty level and 41 percent were uninsured (Figure 2.3~. More than 18 percent of the 30, 25 - ~ 20 - 8 15 - 10 - 5 - O - 24.6 4.3 3.4 a. 9.3 13.3 Asian African American American Group 23.0 ~ Urban Safety Net Hospitals Other Urban Hospitals 10.5 Native Hispanic FIGURE 2.2 Ethnic and racial composition of urban safety net hospital market areas, 1994. SOURCE: Gaskin and Hadley (1999~. Reprinted with permission of the Institute of Health Care Research and Policy.

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM Medicare, 7% Other Third Party, 19% Uninsurea, 41% By Payor Source _ Medicaid, 1 00%-200% of Federal Poverty Level, 20% White, 36% Al, 4% 200% of Federal Poverty Level, 142 - By Income 53 African American, 26% Hispanic, 34% By Race/Ethnicity Below Federal Poverty Level, 66% FIGURE 2.3 Payor source, income, and racial characteristics of FQHC patients, 1997. Data are based on 8.3 million users in 1997. SOURCE: 1997 Bureau of Primary Health Care Uniform Data System. 8.3 million FQHC users in 1997 required translation services; 556 of the 671 FQHCs provided translation services either directly or through a ven- dor (Lefkowitz, 1999~. Local health departments also serve large numbers of uninsured patients, many of whom are seeking specialized services such as treatment for HIV infection/AIDS, sexually transmitted diseases (STDs), or substance abuse. Among 504 local health departments queried in a national survey conducted in March 1999, health officers estimated that one-half of urban health department clients and one-third of clients at health departments serving smaller jurisdictions were uninsured in 1998 (Shields et al., 1999~. Nearly half of urban health departments and about a third of smaller health departments reported an increase in the number of uninsured clients served between January 1998 and January 1999, with the greatest increases seen among women and children. In addition, more than 71 million Americans live in medically underserved areas (MUAs) of the country, primarily inner-city and rural areas with minimal or no economic base and very limited access to pro- viders. According to Darnell and colleagues (1995), more than half of

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54 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED these people are located in urban areas and a disproportionate number are poor African-American and Hispanic individuals. In contrast, people in rural communities tend to be white but are also disproportionately poor and are underserved due to the double jeopardy created by poverty and sparse population (Kindig, 1994; Rosenbaum et al., 1998~. Although these groups are highly dependent on core safety net providers, the public hospitals that serve rural communities frequently are located in distant metropolitan areas. CHCs are not evenly distributed in rural communi- ties. Thus, vulnerable people in rural settings rely more heavily on the commitment of local providers, such as private physician practices, to maintain an open-door policy regardless of the patient's ability to pay (Ricketts et al., 1998~. Core Safety Net Providers Core safety net providers are often referred to as "essential commu- nity providers" or "providers of last resort." As part of President Bill Clinton's health care reform initiative, the U.S. Congress in 1993 defined essential community providers as providers of health services located in federally designated MUAs or in designated health professional shortage areas or providers that are serving medically underserved populations. Such designated providers were legally obligated to provide services to the poor or were, by law, located in areas with high levels of need for health care services. Other providers who were located in underserved areas for reasons unrelated to a legal obligation (e.g., a mission to serve the poor) were not entitled to automatic designation as essential commu- nity providers. Thus, the definition made a major distinction between voluntary uncompensated care and care provided as part of a legal obli- gation. The Institute of Medicine's (IOM) committee's definitions of the core safety net and the safety net system have incorporated those mission- driven providers that do not meet the definition of essential community provider but that nonetheless care for a substantial share of the poor and uninsured population. The individuals who use core safety net providers have complex needs that require both medical and enabling services, the funding for which comes from numerous sources. Over the years, Medicaid has become an increasingly important revenue source for these providers, accounting for about a third of revenues. In fact, in 1997 payments from Medicaid accounted for 33 percent of revenues for NAPH member public hospitals and 35 percent of revenues for FQHCs, whereas commercial insurers were only 10 and 9 percent, respectively (Health Resources and Services Administration, 1999; National Association of Public Hospitals and Health Systems, 1999~. Thus, core safety net providers also must

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 55 piece together a number of small grants from a range of federal, state, and local public and private sources to help support their missions. To high- light the patchwork quilt of safety net financing, Boxes 2.2 and 2.3 illus- trate the complex funding streams for a major urban safety net provider (Denver Health, Denver, Colorado) and a rural safety-net system (Rural Health Group, Inc., Jackson, North Carolina). Public Hospitals There are an estimated 1,300 public hospitals in the United States (Legnini et al., 1999~. Public hospitals' tradition of providing free or un- compensated care goes back more than 200 years to the early public and nonprofit charity hospitals that cared for the poorest individuals at a time when most wealthier individuals were cared for in their homes. Many functioned as charity hospitals in the nation's urban areas. These charity hospitals were outgrowths of what were once the old almshouses for the poor and provided the vulnerable citizens of cities and nearby commu- nities with outpatient clinics, emergency services, hospitalization, and, often, dental care (Gage, 1998~. Until the creation of Medicare and Medic- aid in 1965, these public hospitals represented virtually the only treat- ment alternative available to most low-income patients. Today, large public hospitals tend to be located in urban centers and primarily serve Medicaid beneficiaries and uninsured patients. Initially, public hospitals were owned and operated by state or local governments or public authorities. In recent years many public hospitals have closed or changed their governance to gain greater autonomy and flexibility. Some have been acquired by for-profit and not-for-profit hospital systems that may alter the roles public hospitals have been playing (see Chapter 3~. In an examination of the sources of revenue for public versus private hospitals (Table 2.1), Rosenbaum (1999) notes several key differences: The proportion of self-paying patients at public hospitals is far higher than that of private hospitals. Medicaid is a relatively marginal payer for private hospitals and a major payer for public hospitals. The amount of commercial coverage at public hospitals is marginal compared with that at private hospitals. The higher numbers of uninsured likely translates into a patient population with poorer health status compared to that of the patient popu- lation at private hospitals. Not only is the proportion of self-paying patients much higher at public hospitals than at private hospitals but also there appears to be a big

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56 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 57

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70 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED and Native Americans and Alaska Natives, many of whom might other- wise add to the demand on the core safety net. The original mission of the VHA was to provide hospital care for veterans with service-connected disabilities. Over the years this mission has expanded to include both inpatient and outpatient care for veterans with service-connected disabilities and for veterans with non-service- connected disabilities (National Health Policy Forum, 1998~. Veterans Affairs (VA) hospitals and ambulatory care services are often an unrecognized but significant source of safety net services. In fact, the VA medical center system is one of the nation's largest health care sys- tems, with 173 hospitals, 600 outpatient clinics, 133 nursing homes, 40 domiciliaries, 206 counseling centers, and 185,000 employees. Each year these facilities serve approximately 10 percent of the total veteran popula- tion, providing comprehensive services to approximately 2.5 million vet- erans annually. Only about 12 percent of those treated at a VA facility are treated for a service-connected disability. The majority are poor; 70 per- cent have annual incomes less than $21,610 (National Health Policy Forum, 1998~. IHS works in conjunction with 547 federally recognized tribes to deliver health care to Native Americans and Alaska Natives throughout the country. IHS is the primary, and often the sole, provider of health services for many Native Americans and Alaska Natives. IHS has a staff of 14,500 that operates with approximately $2.2 billion in federal appro- priations and that serves 1.4 million beneficiaries in 500 direct care centers. In addition, IHS operates the Contract Health Services program with non- IHS providers, which currently accounts for 18 percent of all expendi- tures. Although direct and contracted patient care is a large component of IHS, it also provides environmental and educational services. Hospital and ambulatory care, preventive services, and alcohol treatment account for most of the IHS expenditures on direct services. IHS provides services through a broad range of facilities and personnel: 37 IHS hospitals, includ- ing 3 major medical centers; 64 health centers; 5 school-based health centers; 50 health stations; and an array of physicians, dentists, nurses, pharmacists, and other health care professionals (Indian Health Service, 1997~. THE SPECIAL VALUE OF CORE SAFETY NET PROVIDERS As health care continues its transformation toward a more market- oriented, performance-based system, special treatment for designated classes of providers even those providers with important social mis- sions will be highly dependent on their proven ability to add value and operate efficiently. Despite their laudable track record for caring for dis-

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 71 proportionate numbers of this nation's poorest and sickest population groups, core safety net providers are often viewed as operating in a less efficient manner than other groups of providers and with less ability to document their unique contributions to health outcomes for their patient populations (Harrington et al., 1998; Thorpe and Brecher, 1987~. In addi- tion, the committee heard and read evidence that safety net hospitals and clinics operated by state, municipal, or other government subdivisions may be at a disadvantage in their ability to make timely business deci- sions, form strategic partnerships, or succeed in a more competitive envi- ronment given the hiring, procurement, and other rules with which such publicly owned entities have to comply (Bovbjerg and Marsteller, 1998; Siegel, 1996; West, 1999~. Evaluations of safety net providers in some of the states that have received 1115 waivers found that many of these pro- viders have weak existing business and administrative functions largely because the bulk of their business has been limited to the Medicaid, Medi- care, and uninsured populations, none of which required strong business skills (Hoag et al., 1999~. In a system of surplus capacity and downsizing, the ability to measure and demonstrate competitive financial and quality performance is becoming a critical requirement for future survival, for both private and traditionally publicly sponsored health care providers. Although concerns about inefficiencies are occasionally cited, the committee found very limited evidence with which to assess the relative efficiency of safety net providers. The majority of articles devoted to this issue point to safety net providers' more complex patient population and the broader array of services that they have to offer. These "product" differences make assessments of comparative efficiency more difficult (Landon and Epstein, 1999; Lipson, 1997; Savela et al., 1998; Schauffler and Wolin, 1996~. The move to a more market-based system has called renewed atten- tion on issues of efficiency and effectiveness in health care. The phaseout of cost-based reimbursement for FQHCs in the 1997 BBA was propelled in part by a perception in the U.S. Congress and among state governors that such cost-based reimbursement provides few incentives for efficient behavior. A 1998 study with data from 328 health centers assessed the impact of cost-based reimbursement for FQHCs on revenue and utiliza- tion. Although the sample was not perfectly representative of all CHCs, the study demonstrated that the shift to cost-based reimbursement increased the total number of users and Medicaid beneficiaries who receive care at CHCs but that there was no direct link to overall increases in medical encounters per user. The focus on volume is important because states are already allowed to apply caps and productivity screens to the per visit rate (Lewis-Idema et al., 1998~. However, some policy makers contend that despite the potential for

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72 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED internal controls, the cost-related payment system of FQHC is not consis- tent with an emphasis on managed care. Therefore, a number of bills were introduced in the 106th U.S. Congress to develop some type of prospective payment system for FQHCs to replace the current cost-based reimburse- ment system. Lack of agreement on a new method led to the BBA Refine- ments Act of 1999, which tempered the cost reimbursement phaseout as outlined in the 1997 BBA and called for a study to assess alternative payment strategies. Unresolved payment issues aside, studies have demonstrated that these providers can be uniquely effective in addressing the special needs of certain vulnerable populations (Andrulis and Goodman, 1999; Rosenbaum et al., 2000~. For example, New York City's Health and Hospi- tal Corporation, the country's largest public hospital system, serves about 55 percent of the city's patients with AIDS, 48 percent of its patients with tuberculosis, and about 36 percent of its patients who need inpatient psychiatric treatment (LaRay Brown, Health and Hospital Corporation, personal communication, March 2000~. A study to assess whether the presence of a public hospital in a community increased access to care among the poor found that the presence of such a hospital not only increased the volume of care provided to the medically indigent popula- tion, but also reduced the uncompensated care burden for private hos- pitals (Thorpe and Brecher, 1987~. The study also found that public hos- pitals in cities with a substantial level of graduate medical education delivered proportionately more uncompensated care than nonteaching public hospitals. A 1990 study by Bindman and colleagues found that the closing of a public hospital in a semirural area of northern California had a significant effect on access to health care and was associated with a decline in the self-reported health status of patients previously served by the closed hospital (Bindman et al., 1990~. A number of comprehensive literature reviews of CHCs and the Medicaid program have documented that the effectiveness and cost- effectiveness of CHCs in improving access to ambulatory care, reducing inappropriate hospitalizations, and delivering quality care, was compa- rable to that of other types of providers (Davis and Schoen, 1977; Dievler and Giovannini, 1998; Hawkins and Rosenbaum, 1998~. A study that looked at the impact on access to health care after the introduction of CHCs in five low-income areas across the country found that the avail- ability of CHCs not only increased access to medical and dental care but also resulted in a major shift in care from hospital clinics to CHCs and a significant reduction in hospital inpatient use (Okada and Wan, 1980~. The new CHCs also attracted people with no previous source of care. The study found, however, that although Medicaid and the presence of CHCs greatly facilitated the use of health services, disparity in the utilization of

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 73 health and dental care remained between the study areas and the aver- ages for the nation. The impact of health centers on outcomes was demon- strated by a national analysis of county data using multivariate tech- niques which attributed 12 percent of the decline in black infant mortality from 1970 to 1977 to the presence of CHCs (Goldman and Grossman, 1988). A seminal study by a team of researchers at the Johns Hopkins School of Hygiene and Public Health that looked at the relationship between efficiency in the use of resources and quality of care in different primary care settings targeted mainly to Medicaid beneficiaries found that, irre- spective of costs, the quality of medium-cost health centers met or ex- ceeded the quality of other providers (Starfield et al., 1994~. Another study by a Johns Hopkins-based team compared Medicaid utilization and ex- penditures for users of health centers and other providers and found that, after adjusting for case mix, health center users had costs and inpatient admissions similar to those for patients who used private physicians for their primary care and less than those who used hospital clinics (Stuart and Steinwachs, 1993~. A more recent but related study on income, in- equality, primary care, and health indicators, also conducted by researchers at Johns Hopkins, found that availability of primary care may in part help overcome the severe adverse impact of income inequalities on health (Shi et al., 1999~. Other recent analyses found that Medicaid users of CHCs experience a 22 percent lower rate of hospitalization for ambulatory care sensitive conditions than Medicaid beneficiaries who receive medical services from other primary care providers (Falik et al., 1998~. A nationally representa- tive survey of health center patients conducted by Mathematica Policy Research, Inc. in 1995 for the Bureau of Primary Health Care found that female health center patients are more likely to obtain mammographies, clinical breast exams, and Pap smear tests than a comparison group drawn from the National Health Interview Survey (Regan et al. 1999~. Moreover, both this study and a survey for the Picker-Commonwealth Fund based on a representative sample of health center patients reported high levels of satisfaction, respectful treatment, increased access over other providers, convenient hours, and availability of translation/interpretation into their own language (Regan et al., 1999; Zuvekas et al., 1999~. A longitudinal study on the impact of pediatric visits to hospital emer- gency departments after the establishment of a neighborhood health center found that inappropriate emergency department visits declined signifi- cantly with the establishment of the center in a poor Rochester, New York, neighborhood (Hochheiser et al., 1971~. No such decline was observed among residents of a control community that remained without a CHC. The study suggests, however, that the proximity of underserved

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74 AMERICA'S HEALTH CARE SAFETY NET: INTACT BUT ENDANGERED populations to health services is an important but not an overriding inducement to use. Access and provision of quality care for poverty resi- dents, the study shows, must be associated with aggressive outreach, cultural considerations, and effective communications. A study that looked at the effects of Florida's Medicaid eligibility expansions for pregnant women found that access and birth outcomes improved for low-income women who did not have private insurance (Long and Marquis, 1998~. These improvements in access and outcome were linked to the availability of county health department services. Study results showed the importance of linking expanded insurance coverage for low-income women with a delivery system that can accommodate their special needs. However, a study by researchers at the Agency for Health Care Policy and Research and the University of California chal- lenged these findings and showed that Medicaid-eligible women who obtained multidisciplinary prenatal care at private physician's offices that were reimbursed by Medicaid for enhanced care had equal or better out- comes than women served by local health departments (Simpson et al., 1997~. A more recent study from California sheds additional light on this issue. Using telephone surveys of residents in urban California com- munities, Grumbach and colleagues found that physician supply alone may not guarantee effective access to care for disadvantaged populations (Grumbach et al., 1997~. The study suggests that in poor communities physician supply may need to be linked with organizational structures that address the multiple sociodemographic factors that can impede access to care. SAFETY NET PROVIDERS IN A CHANGING HEALTH CARE ENVIRONMENT Today's environment of change and challenge will likely have impor- tant policy and program implications for the nation's traditional safety net providers. As the rolls of the uninsured continue to expand, other major players in the delivery system are finding it more difficult to sus- tain their past commitment to uncompensated care, placing more of the burden on public hospitals and CHCs. Despite this reliance and the acknowledged contributions of safety net providers, profound questions are being raised today about how the future financing of health care and health care for poor and uninsured individuals should be organized and funded. Devolution and the market paradigm with its dynamics of com- petition, consumerism, and choice have focused major interest in expand- ing access to affordable insurance for low-income Americans as an alter- native to continued government support for a designated set of providers.

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THE CORE SAFETY NET AND THE SAFETY NET SYSTEM 75 Whereas core safety net providers have always survived on a tenuous patchwork of funding, the policy and political mindsets in many quarters support the notion that these, as well as other providers, should be chal- lenged to operate more effectively and efficiently even with more limited resources and with patients with more complicated medical conditions and socioeconomic challenges. The committee concludes that the safety net system is a distinct deliv- ery system, however imperfect, that addresses the needs of the nation's most vulnerable populations. In the absence of total reform of the health care system and while the new market paradigms are unfolding, it seems likely that the nation will continue to rely on safety net providers to care for its most vulnerable and disadvantaged populations. Chapter 3 pro- vides a comprehensive analysis of the major factors that affect the health care safety net. REFERENCES Agency for Health Care Policy and Research. 1997. Local Health Departments in a Managed Care Environment: Challenges and Opportunities. Workshop Summary, May 6-8, 1997, User Liaison Program. [WWW document]. URL http://www.ahcpr.gov/research/ ulplocmc.htm (accessed September 18, 1998~. Altman, S., and Guterman, S. 1998. The Hidden U.S. Healthcare Safety Net: Will It Survive? In: The Future U.S. Healthcare System: Who Will Care For the Poor and Uninsured? Altman, S., Reinhardt, U., and Shields, A. teds.) Chicago, IL: Health Administration Press; pp. 167-186. American Medical Association. 1998. Physician Marketplace Statistics. Chicago, IL: Center for Health Policy Research, American Medical Association. American Pharmaceutical Association. 1996. Studies Affirm Pharmacists as the Most Acces- sible Part of Rural Health Care. Pharmacy Today, 2~4), 1-2. Andrulis, D., and Goodman, N. 1999. The Social and Health Landscape of Urban and Suburban America. Chicago, IL: Health Forum. Association of American Medical Colleges. 1994. Minority Students in Medical Education: Facts and Figures VIII. Washington, DC: Association of American Medical Colleges. Baxter, R. 1998. The Roles and Responsibilities of Local Public Health Systems in Urban Health. Journal of Urban Health: Bulletin of the New York Academy of Medicine, 75~2), 322- 329. Baxter, R., and Mechanic, R.E. 1997. The Status of Local Health Care Safety Nets. Health Affairs, 16~4), 7-23. Billow, J.A., Van Riper, G.C., Baer, L.L., and Stover, R.G. 1991. The Crisis in Rural Pharmacy Practice. American Pharmacy, NS31, 51-53. Bindman, A., Keane, D., and Lurie, N. 1990. A Public Hospital Closes: Impact on Patients' Access to Care and Health Status. JAMA, 264~22), 2899-2904. Bindman, A., Grumbach, K., Vranizan, K., Jaffe, D., and Osmond, D. 1998. Selection and Exclusion of Primary Care Physicians by Managed Care Organizations. JAMA, 279~9), 675-679. Blumenthal, D., Campbell, E.G., and Weissman, J.S. 1997. Understanding the Social Missions of Academic Health Centers. New York, NY: The Commonwealth Fund.

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