Center for Studying Health System Change

Introduction

his paper examines how health system change in 12 metropolitan areas is shaping the organization and delivery of health care to poor populations. Perceptions and concrete manifestations of market and policy forces influence which health care organizations serve the poor and the strategies they use to adapt to the collective forces of change. These changes may affect care, access and the viability of providers.

The characteristics of poverty in an area, local values about poverty and health, public policy and economic forces all interact to make provision of care to poor populations more or less attractive to different health care organizations. Most communities have health care organizations that have a stated mission or legal responsibility to care for the poor - those often referred to as the health care safety net. There has been growing concern among policy makers that new policy and market forces will adversely affect care for the poor and these mission-oriented organizations.

This study builds on prior examination of the organization and viability of the health care safety net across diverse markets, and looked at how public policies affect public hospitals, academic health centers, community health centers, and other entities that serve the poor.^1,2

This study confirms many of the findings of previous work, including the earlier snapshot studies.³ Competition for Medicaid patients continues to grow as Medicaid managed care becomes more prevalent. States wrestle with financing mechanisms to support care for the uninsured, and in some cases are enacting new regulations to protect the providers that have traditionally served those needs. Safety net providers are actively trying to adapt to health system changes in much the same ways as other providers: demonstrating value, improving performance, integrating horizontally and vertically, and contracting with or forming managed care plans. Local health departments are moving out of direct clinical services. There is widespread concern among these traditional providers and advocates for the poor that health system changes will jeopardize these organizations’ viability and continued commitment to the poor.

This study also uncovered several trends in care for the poor that add to or diverge from findings in the earlier studies. Health care for the poor was not typically a priority in the 12 markets we studied, except among the constituencies and providers very directly affected. But it surfaced rapidly when a public hospital or other traditional provider of care for the poor changed ownership, or when other events raised the specter of redistributing responsibility for uncompensated care. Community health centers appeared particularly vulnerable to health system changes, despite a wide range of activities to adapt to managed care. Hospitals, on the other hand, appeared to be adapting successfully in many cases. Previous studies described considerable anxiety about adverse impacts of anticipated events (principally mandatory Medicaid managed care and welfare reform), but documented few actual effects. We saw several instances in which providers had in fact reduced access for the uninsured compared with their previous practices. We also saw unique attempts to apply managed care enrollment and service approaches to the uninsured in several sites. In contrast to traditional descriptions of a safety net, we found little evidence of real comprehensive service networks among traditional providers of care to the poor, and indeed encountered numerous instances of fierce competition among those providers.

¹  Baxter, R. J., and R. E. Mechanic. "The status of local health care safety nets."       Health Affairs. 1997; 16:7-23.

² Lipson, D. J., and N. Naierman. "Effects of health system changes on safety net providers." Health Affairs. 1996; 15:33-48.

³ Ibid.