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Health Tracking

FROM THE FIELD

Exploring The Limits Of The Safety Net: Community Health Centers And Care For The Uninsured

Abstract

 
This paper explores the extent to which community health centers (CHCs) are able to manage their uninsured patient caseloads. We found that CHCs can provide primary care, medications, and medical supplies to most of their uninsured patients on site but are limited in their ability to provide diagnostic, specialty, and behavioral health services. Uninsured patients often fail to receive additional services for which they are referred, and it is much more difficult for CHC physicians to arrange specialty or nonemergency hospital care for their uninsured patients than for their insured patients.

To care for the uninsured, the United States relies on a patchwork "system" of safety-net providers, including community health centers (CHCs). President George W. Bush recognized the important role of CHCs when, in his first budget, he proposed to increase CHCs’ funding as part of a multiyear initiative to increase the number of CHC sites and strengthen the health care safety net. On 7 March 2002 Health and Human Services Secretary Tommy G. Thompson announced the availability of twenty-seven grants totaling $11.7 million. According to Thompson, "We want to double the number of patients served by our health centers. This is a central element in the President’s plan for expanding access to health care, especially for those without health insurance."³ Despite this initiative, it is increasingly difficult for CHCs and other safety-net providers to serve the uninsured. Growth in the number of persons without health insurance and increased pressure to remain competitive threaten the capacity of safety-net institutions.⁴

CHCs and the other institutions that make up the health care safety net continue to play an essential role in providing care to Medicaid recipients and the uninsured, but their ability to do so has been undermined by recent changes in the health care system.⁵ Although they received some additional dollars from SCHIP, a 2000 Institute of Medicine (IOM) report concluded that the safety net is "intact but endangered."⁶

Growth in the number of uninsured persons during the past decade is one of the main threats to the health care safety net.⁷ Although the number declined between 1998 and 2000, overall the numbers have been increasing for a decade. Reductions in payments from public and private payers have also limited safety-net providers’ ability to subsidize care for the uninsured with money from insured patients.⁸ An increasingly competitive health care system has destabilized the implicit cross-subsidies that have long supported the safety net.⁹

Given the challenges faced by safety-net health care providers, we conducted this analysis to better understand the extent to which CHCs care for uninsured patients.

Data And Methods

Top Data And Methods CHCs' Organizational... Access To Care How Does Insurance Status... Concluding Comments NOTES

 
In 2001 we surveyed executive directors and medical directors from a geographically representative sample of twenty health centers in ten states (one rural health center and one urban health center selected at random in each state). The ten states are California, Colorado, Idaho, Massachusetts, Michigan, Missouri, Pennsylvania, South Carolina, Texas, and West Virginia. All of the executive directors and seventeen of the twenty medical directors we contacted agreed to participate.

The sample size of this pilot study is small, so we must be cautious when interpreting our findings. The limits of our ability to generalize from this sample are underscored by the extreme variation in health center size described below. Nevertheless, our sample provides an opportunity to learn about health centers operating in a range of market conditions, because the states from which we drew the sample differ both in the percentage of the population without health insurance and in the degree of managed care penetration.

We interviewed each executive director in person during the National Association of Community Health Centers’ Thirty-second Annual Convention in Denver, 25–28 August 2001. The medical directors completed a brief mail survey during the fall of 2001. The executive director survey asked about the center’s size, organization, and policies toward the uninsured. It also asked about services available at the center, the extent to which uninsured patients require care not provided at the center, the center’s ability to arrange referrals for uninsured patients, and strategies used by the center’s staff to secure additional care from specialists. The medical directors were asked a similar set of questions about strategies they use to cope with issues in caring for the uninsured. They were also asked to compare their ability to care for their insured and uninsured patients.

CHCs’ Organizational Characteristics

Top Data And Methods CHCs' Organizational... Access To Care How Does Insurance Status... Concluding Comments NOTES

 
Health center size and structure. The CHCs in our sample varied in size and structure. The median number of clinics supported by each CHC was seven, but the number of clinics supported ranged from one to fifteen.¹⁰ The number of physicians at each CHC ranged from 1.6 full-time equivalents (FTEs) to 17, and the total number of patients ranged from about 4,600 to more than 48,000.

Patient mix. CHCs are providers of last resort. They care for a low-income population, many of whom are on Medicaid or do not have any insurance coverage and cannot afford to pay for their care out of pocket. The uninsured represented the largest segment of patients at the CHCs we studied (mean percentage, 43 percent), followed closely by Medicaid beneficiaries (34 percent). According to the executive directors, 60 percent of CHC patients had incomes below 100 percent of the federal poverty level, and 21 percent had incomes of 100–200 percent of poverty.

Funding. Health centers rely on multiple funding sources, but grants from the Bureau of Primary Health Care (BPHC) and Medicaid revenue are typically the largest sources of funding. According to the 2000 Uniform Data Set (UDS), grants from the BPHC represented a mean of 27 percent of total income for the CHCs in our sample; Medicaid paid for 29 percent. None of the other sources of funding or payments to these centers—including Medicare, commercial insurance, and other government grants—accounted for more than 8 percent of CHCs’ total income.¹¹

Policies to accommodate the uninsured. All of the CHCs we surveyed have explicit policies to accommodate uninsured patients, but the specifics vary. For example, all of the centers use a sliding fee scale for uninsured patients who cannot afford to pay for their care, but the "nominal fee" charged patients below 100 percent of poverty ranges from $5 to $20.

If patients claim that they do not have enough money to pay the fee as determined by the sliding scale, most CHCs will provide care anyway. Ten center executive directors told us that they try to work out an alternative payment plan—usually asking patients to pay "whatever they can" for the services. Five directors told us that they continue to bill the patient but provide care while waiting for payment. Four told us that they provide care and write off the cost as bad debt. Only one center director told us that his CHC sends patients to another provider if they refuse to pay. This was also the only center that claimed to submit unpaid bills to a collection agency.

Access To Care

Top Data And Methods CHCs' Organizational... Access To Care How Does Insurance Status... Concluding Comments NOTES

 
Services available on site. Few of the CHCs in our survey provide specialty services on site. Only five of twenty health centers provide more than one specialty on site. Only 35 percent of centers surveyed claimed to have a psychiatrist available, and fewer than one-third of the centers claimed to have any of the other specialists on site (see Exhibit 1).

What happens when services are not provided on site? The vast majority of CHCs told us that when patients require diagnostic procedures, specialty services, or behavioral care not provided on site, they refer these patients to other providers but do not pay for these services (Exhibit 1). There are a few exceptions to this pattern. For example, one site pays for the first visit to certain specialists (cardiology, dermatology, gastroenterology, neurology, and ophthalmology) or for infectious diseases only. These exceptions are often related to the availability of grants. Several CHCs indicated that they pay for mammograms because there are grant funds specifically for this purpose.

Strategies for obtaining additional care. Almost all CHCs have staff responsible for arranging services off site. In addition, CHCs use a variety of other methods for obtaining specialty care for their patients. When the cost of specialty care is a barrier, 35 percent of the executive directors told us that they, or their physicians, try to negotiate with specialists to offer a lower fee to their uninsured patients who cannot afford to pay the standard charge. A few executive directors (15 percent) told us that they try to enroll their uninsured patients in Medicaid or SCHIP as a strategy for obtaining additional care, but typically the CHCs already explored this possibility when the patient first arrived. Finally, 20 percent of the executive directors told us that CHC physicians rely on their professional networks and friends to arrange for additional specialty care for their patients.

Despite these efforts, half of the CHCs’ medical directors told us that patients frequently fail to get this additional care, and cost appears to be the main barrier. Three-fourths of the medical directors we surveyed told us that cost is the main reason patients fail to get diagnostic procedures; 70 percent indicated that cost is the main barrier to specialty referrals; and 80 percent indicated that cost is the main barrier to behavioral health care. The medical directors also mentioned transportation, cultural issues, and difficulties associated with arranging an appointment as other reasons for patients’ failing to obtain additional care, but none appears to be as critical as cost.

Medications. The CHCs appear to be more successful at making prescription drugs available to their uninsured patients than they are at arranging referrals for care not provided on site. More than 80 percent of CHCs say that patients frequently require medications for which they cannot pay. Despite this, 75 percent of the executive directors told us that they can usually provide drugs to their uninsured patients.

The CHCs use a variety of methods for obtaining prescription drugs. Nearly two-thirds have an in-house pharmacy from which they can offer subsidized medications; 70 percent rely on samples from drug companies; and 75 percent participate in national programs financed by drug companies to subsidize drugs for low-income patients. Another 40 percent participate in publicly subsidized drug programs. Despite these efforts, the cost of prescription drugs represents a barrier for a small percentage of CHC patients; it was listed by our executive and medical directors as one of the most important challenges that CHCs currently face.

How Does Insurance Status Affect Care?

Top Data And Methods CHCs' Organizational... Access To Care How Does Insurance Status... Concluding Comments NOTES

 
We asked the medical directors to assess their CHCs’ ability to care for insured and uninsured patients. First, we asked them to compare their ability to maintain a continuing relationship, communicate with specialists, and provide high-quality care and whether they have adequate time for their insured and uninsured patients. The medical directors indicated that there is little difference between the care available to their insured and uninsured patients (Exhibit 2). However, when we asked about their ability to provide all necessary services, obtain nonemergency hospital admissions, and obtain specialty referrals for their insured and uninsured patients, the responses told a different story (Exhibit 3).

View larger version (17K): [in this window] [in a new window]   EXHIBIT 2 Percentage Of Community Health Center Medical Directors Who Agree Or Agree Strongly With Statements About The Care They Provide To Their Patients, 2001

View larger version (15K): [in this window] [in a new window]   EXHIBIT 3 Percentage Of Community Health Center Medical DIrectors Who Report That Additional Care Can Be Provided For Their Patients Very Frequently Or Frequently, 2001

As we expected, medical directors indicated that insurance status has no effect on the quality of care that patients receive on site. Lack of insurance, however, is problematic when CHC physicians try to arrange referrals for their patients.

Concluding Comments

Top Data And Methods CHCs' Organizational... Access To Care How Does Insurance Status... Concluding Comments NOTES

 
The Bush administration’s plan to double the number of CHCs by calendar year 2006 represents a needed expansion of access to primary care for uninsured Americans, but our findings underscore the limits of this strategy. Although the CHCs we surveyed could provide most of the primary care services that their uninsured patients required, they are often unable to provide needed diagnostic, specialty, and behavioral health services to these patients. Increasing the number of CHCs without also providing a substantial increase in their budgets will not address the apparent limits these organizations face in providing or arranging for these additional services.

Our findings indicate that increasing the number of CHCs is not an adequate substitute for expanding health insurance coverage. At the CHCs in our sample, insured patients are much more likely than uninsured patients are to receive all necessary services. Furthermore, the value of this incremental expansion of access to primary care may be undermined by some of the administration’s proposed cuts to other programs that serve the uninsured. For example, along with its calls for doubling the number of CHCs, the Bush administration has proposed phasing out the Community Access Program (CAP). CAP provides grants to communities for initiatives that coordinate public and private efforts to provide medical care to the uninsured; these programs often result in expanded access to specialty care.¹²

Community health centers are a vital part of the health care safety net, and it is essential to understand their limitations as well as their strengths as we debate alternative strategies for addressing the needs of the uninsured. In the next stage of our study, we hope to confirm and extend these initial findings by examining surveys from a larger sample of CHCs and a sample of safety-net hospitals.

Editor's Notes

 
Michael Gusmano is associate director of the World Cities Project, at the International Longevity Center–USA, and visiting scholar at the Robert F. Wagner School of Public Service, New York University, in New York City. Gerry Fairbrother is a senior scientist in the Division of Health and Science Policy, New York Academy of Medicine, also in New York City. Heidi Park is a research associate there.

The authors gratefully acknowledge the Commonwealth Fund for its financial support. The views expressed are solely those of the authors, and no official endorsement by the sponsor is intended or should be inferred.

NOTES

Top Data And Methods CHCs' Organizational... Access To Care How Does Insurance Status... Concluding Comments NOTES

 

1. The Omnibus Budget Reconciliation Act (OBRA) of 1986 gave states the option to cover infants through the first year of life and pregnant women with incomes up to 100 percent of the federal poverty level, regardless of their eligibility for Aid to Families with Dependent Children (AFDC). OBRA 1987 gave states the option to cover children through age seven who lived in families with incomes below 100 percent of poverty. These expansions became mandatory in 1990 under OBRA 1989, which mandated Medicaid eligibility for all children ages 0–5 and pregnant women in families with incomes up to 133 percent of poverty. U.S. Census Bureau, Current Population Survey, March 2001.
2. R. Abelson, "Hard Decisions for Employers as Costs Soar in Health Care," New York Times, 18 April 2002; Employee Benefit Research Institute, Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2001 Current Population Survey, Issue Brief no. 240 (Washington: EBRI, December 2001); and J. Riskind, "Health Coverage Heats Up as Issue: Millions in U.S. Lack Insurance, Which Could Be a Hot Political Topic," Columbus Dispatch, 15 July 2002.
3. Health Resources and Services Administration, "HRSA Awards Twenty-seven Community Health Center Grants to Improve Access to Services," HRSA News, 7 March 2002.
4. D.P. Andrulis, "The Public Sector in Health Care: Evolution or Dissolution?" Health Affairs (July/Aug 1997): 131–140; P.J. Cunningham, "Pressures on Safety-Net Access: The Level of Managed Care Penetration and Uninsurance Rate in a Community," Health Services Research (April 1999): 255–270; and C.M. Grogan and M.K. Gusmano, "How Are Safety-Net Providers Faring under Medicaid Managed Care?" Health Affairs (Mar/Apr 1999): 233–237.
5. The components of the health care safety net vary from community to community, but the safety net often includes public hospitals, local health departments, and other free clinics. See Grogan and Gusmano, "How Are Safety-Net Providers Faring?"
6. M.E. Lewin and S. Altman, eds., America’s Health Care Safety Net: Intact but Endangered (Washington: National Academy Press, 2000).
7. Current Population Survey, March 2000.
8. Cunningham, "Pressures on Safety-Net Access";; and Lewin and Altman, America’s Health Care Safety Net.
9. Andrulis, "The Public Sector in Health Care";; and J. Meyer, Managed Care and Low-Income Populations: Four Years’ Experience with the Oregon Health Plan (Menlo Park, Calif.: Henry J. Kaiser Family Foundation, 1999).
10. A single health center often has multiple clinics.
11. These figures are from the 2000 Uniform Data Set (UDS). The executive directors of each CHC confirmed the accuracy of these data.
12. A.S. Landa, "Bush Budget Would Cut Uninsured Grants," 18 June 2001, www.ama-assn.org/sci-pubs/amnews/pick_01/gvsa0618.htm (19 August 2002); and U.S. Department of Health and Human Services, "HHS Announces $22 Million in New Grants to Improve Services to Uninsured Americans," HHS News, 7 September 2000.

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