Center for Studying Health System Change

he Lansing area has a strong tradition of involvement on the part of public and private providers in serving the poor, particularly the Medicaid and uninsured populations. Many initiatives involve collaborative efforts among public and private providers, local government, MSU and various foundations. This collaborative effort and strong support by the Ingham County Health Department (ICHD) and area hospitals currently form a strong base of services for the area’s poor and uninsured populations.

Approximately 10 to 12 percent of the Capital Area’s residents are uninsured, with a higher concentration in Ingham County and more specifically in Lansing.¹⁹ ICHD estimates show that the area’s minority populations are disproportionately represented, with approximately 20 percent of African Americans and 25 percent of Hispanics in Lansing uninsured compared with 13 percent of whites. Some neighborhoods, such as the one in which Sparrow Hospital is located, have uninsured rates as high as 26 percent. The Health Department study also suggests that the rates are increasing as the proportion of area firms providing health benefits, particularly to dependents, decreases and as Medicaid eligibility rules tighten.

Consequently, the safety net issue is a central component of the area’s strong focus on community accountability. ICHD provides leadership in identifying issues related to indigent care and in serving as a major direct provider of ambulatory services. In conjunction with the other area health departments, ICHD conducts various studies related to health status, plays a leadership role in development of strategies to address identified problems and provides an array of public health services.

The Capital Area safety net and indigent care system is primarily organized on a county basis, and is made up of area hospitals, health departments and a number of community-based organizations. Financing comes from the state, county, Medicare and Medicaid disproportionate share hospital payments, foundations and the hospitals. The three Lansing hospitals in particular have always played an important role in providing inpatient and outpatient services to the indigent population. In addition, the hospitals have been actively involved in their neighborhoods with broader issues such as housing, safety and economic development.

Concern with existing hospital commitments to provide indigent care was first raised with the sale of the public hospital in 1992 and more recently with the possible entry of Columbia/HCA. As a result of both of these events, ICHD sponsored a study of the hospitals to determine how the burden of indigent care was spread across the hospitals, and specifically to see if MC² was providing the level of indigent care required as part of the sale of the public hospital. The study showed that Sparrow and St. Lawrence are providing their proportionate share of indigent care in the market while MC² provides less than its proportionate share.

ICHD’s role as a major provider of direct services for the indigent and Medicaid population stems in part from the fact that there are no federally funded community health centers in the area. Several community-based organizations that provide direct services work with the health department, area hospitals and, in some cases, the two MSU medical schools, to ensure a wide array of services for underinsured and uninsured residents. Various foundation grants from the W.K. Kellogg Foundation and The Robert Wood Johnson Foundation also support development of community-based systems to address the needs of these populations and strengthen the area safety net, such as "network centers," which are being developed in the four major Lansing neighborhoods to provide health care and other social and human services.

Access to care in the Lansing market seems to be relatively good, but there is growing concern that access may become more of an issue in the future, in part due to more stringent enrollment processes for welfare and other aspects of welfare reform. Medicaid managed care is reported to be improving access to services for the Medicaid population. Area hospitals’ prior commitments and the presence of a strong health department and other community-based organizations have been the primary source of a fairly comprehensive set of services for the indigent.

There are concerns, however, that these efforts cannot be sustained in the face of growing numbers of uninsured and an increasingly competitive environment. ICHD is taking a leadership role in developing a community-wide effort involving business and area hospitals to ensure access for the uninsured. Its objective is to develop an approach to financing and managing care for this population. Some strategies include a pooled hospital fund to organize care and/or a managed care approach. It is not clear at this time whether the area hospitals will work together on this effort and whether other required funding will be forthcoming. This approach, however, is representative of the overall community approach to addressing key issues. The current difficulties of obtaining buy-in from all of the hospitals also reflect the impact of competition on the previously cooperative environment.