Robert E. Hurley, Ph.D. Virginia Commonwealth University and the Center for Studying Health System C

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Robert E. Hurley, Ph.D.Virginia Commonwealth
University andthe Center for Studying Health
System Change
Cross Community Perspectives on Safety Net Models
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Overview

• Indigent care eco-systems
• Approaches to ensuring access to care
• Community Tracking Study
• Illustrative market experience
• Extracting some lessons
• Conclusion

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Communities have distinct indigent care
eco-systems

• Multiple approaches to ensure acute medical care
  availability to low income persons without
  insurance coverage
• Community mores, public policy, provider
  capacity, extent and nature of demand influence
  access to indigent care
• Communities implicitly or explicitly customize
  approaches to meet unique needs based on
  particular circumstances
• A balance is achieved, somehow an eco-system
  emerges

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Methods to Ensure Access to Care

• Make it
• Buy it
• Subsidized it
• -Direct subsidy
• -Cross-subsidy

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Make it

• Directly provide services via government owned
  facilities and/or employed providers
• Classic safety net providers, e.g.
  publicly-owned hospitals, FQHCs, local health
  dept. clinics
• Open door policy (serve all comers)
• Traditional emphasis on acute care and episodic
  delivery
• Challenge is how to get best value for investment

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Buy it

• Public sector purchases care from private
  providers on behalf of persons who cannot afford
  it themselves
• -vendor payment programs
• - payments typically below market rates
• Provide/purchase coverage for persons who cannot
  purchase it for themselves
• -Medicaid expansions, SCHIP, etc
• -Opportunities to privatize coverage

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SubsidizeDirect Subsidy

• Provide support to selected providers to defray
  cost of uncompensated care
• - designated for groups/classes of
  individuals
• - may include (arguably) tax exempt
  status
• Public and private (e.g. conversion foundations)
  resources committed to targeted programs and
  populations
• e.g. Disproportionate share payments to hospitals
  (DSH), free clinics
• Limited ability to meet large scale needs

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Subsidize--
Cross-subsidy

• Require providers to donate care and finance
  donation by generating surpluses from other
  payers
• e.g. EMTALA and other non-discrimination
  policies
• Convenient kind of default public policy decision
  (hidden tax most easily supported hospital as
  tax collector)
• In addition to providing funds for uninsured,
  seen as source to make-up for public payer
  shortfalls
• Promotes/perpetuates cost-shifting

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Cost-shifting to Private Payers
Hospital Payments as Costs-1990
Source ProPAC, 1992.
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Cost-shifting to Private Payers
Hospital Payments as Costs-2001
Source MedPAC, 2003
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The Rise and Fall and Rise of Cost-Shifting1990-
2005Hospital payments as percentage of costs by
payer
Source MedPAC, 2005
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Cost-Shifting and its Implications

• Cost shifting to private purchasers played key
  role in promoting managed care revolution
• Managed care systematic suppression of cost
  shifting
• Cost shifting is growing again
• Many current state reform initiatives (ME, MA,
  CA) highlighting cost shifting consequences
• Can a hidden tax be replaced by not-so-hidden
  financing sources???

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Community Tracking Study Sites
Seattle, WA, WA
Syracuse, NY
Boston, MA
Lansing, MI
Northern NJ
Cleveland, OH
Indianapolis, IN
Orange County, CA
Little Rock, AR
Phoenix, AZ
Greenville, SC
Miami, FL
Community Tracking StudyFunded by the Robert
Wood Johnson Foundation carried out by the
Center for Studying Health System Change
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Mix of Coverage in CTS Markets
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Mix of Coverage in HSC Markets
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Eco-systems in Illustrative Markets

• Boston
• Indianapolis
• Little Rock
• Orange County

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Boston

• Extensive private coverage relatively
• generous Medicaid coverage low level
• of uninsured (7-8)
• Make Two major public
  
  hospitals, 20 CHCs
• Buy Free care pool-DSH and
  hospital tax
  supported
• Subsidize Public hospitals offer
• managed
  care products
• to uninsured via subsidies
• New universal coverage program being rolled out
  combinations of strategies including make, buy,
  and subsidizegood sensitivity to protecting
  safety net in transition

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Indianapolis

• Solid employer coverage, modest Medicaid,
• manageable uninsured burden
• Make Public hospital with tax support
  
• and AHC
  affiliation, several CHCs
• Buy Publicly supported local
  managed care product
• for uninsured
  paying for ambulatory care at CHCs
• Subsidize Inpatient care for uninsured
  concentrated in public
• hospital
• Rapid growth in local low income coverage program
  and growing demands on public hospital and
  academic specialty departments creating some
  financial distress.

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Little Rock

• Modest employer coverage, Medicaid expansive
• only for children, substantial uninsured
• population
• Make UA Medical Sciences Center major
  regional source
• of
  inpatient and specialty care for indigent
• Buy Highly inclusive ARKids (Medicaid
  and SCHIP)
• Cross subsidize Reliance on NFP hospitals
  and physicians for
• 
  donated care
• Marked disparities between access to care for
  kids vs. adults serious shortage of specialty
  care for uninsured even at AHC

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Orange County, CA

• Limited employer sponsored coverage,
  moderate Medicaid
  participation,
• substantial uninsured
• Make UC-Irvinepublic AHC, only 2 FQHCs in
• 
  county with 3 million, 19 private CHCs
• Buy Medically indigent vendor program for
  legal
• county residents
• Subsidize Donations to private
  clinics and
• free clinics/CHCs, childrens hospital
  
• Cross subsidize FP/NFP hospitals provide
  limited
• uncompensated inpatient and ED care
• Access to specialty care significant problem and
  disproportionate burden on relatively small AHC
• New state universal coverage proposal now in play

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Common Themes

• Strength of employer coverage is key
• Scope of Medicaid is important
• Public providers (makers) typically backbone
• Many private providers prone to avoid uninsured
  where they can
• Some success in local low income coverage
  modelsbut typically exploit inpatient care
  providers
• Specialty care and prescription drugs cant be
  made and are expensive to buy or subsidize, so
  increasingly difficult to acquire

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Contemporary Concerns

• Employer-sponsored insurance growth has stalled
  and appears to be slipping
• Premiums rising benefits being trimmed take-up
  rates likely to fall
• Extent of under-insurance increasing
• Donor fatigue (contributed charity care) growing
• Public programs expanding enrollment but
  financial burden growing
• Cost-shifting being quantified and vilified, but
  replacement financing mechanism unclear

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Broad StrategiesWhat Could be Done?

• Incrementally expand public programs to cover
  more people
• Shore up erosion in employer coverage
• Expand availability of private coverage via
  incentives to individuals
• Create new grouping mechanisms to overcome
  limitations of employer sponsorship
• Compel private firms to provide coverage or
  individuals to acquire coverage
• Consider a national health insurance scheme to
  complement or replace existing patchwork

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Whats Likely to be Done?

• Not very much on a national level, yet, though
  universal coverage for children may be in sight
• Promising, but uneven, action at state level
  mosaic approach is most common fill in
  picture with separate pieces targeted to distinct
  populations
• Affordability remains a crucial impediment
• Local eco-systems will remain key

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If We Do Nothing. . .

• Growing strains on public providers
• Default public policy to remain cost-shifting in
  many/most markets
• Uneven burden by
• -communities
• -provider types
• -service lines
• Deserving kids vs. others
• Economics disparities are at the root of much of
  the contemporary disparity concern

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The Widening Rift. . .

• A widening rift in access is inevitable among the
  have, the have-little, and the have-not
• No likelihood of broad gauge, near term response
• Eco-systems will adapt but stress and distress
  will become more evident on all parties