The Safety Net Landscape: An Evolving World. Leighton Ku, PhD, MPH Professor & Director Center for Health Policy Research Leighton.ku@gwumc.

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1 The Safety Net Landscape: An Evolving World Leighton Ku, PhD, MPH Professor & Director Center for Health Policy Research 1

2 Two Health Safety Nets Insurance Safety Net: Medicaid, CHIP, Medicare Provider Safety Net: FQHCs, public & charity hospitals, rural health & free clinics, public health depts., family planning, mental health, etc. Often supported by federal, state/local, charitable grants. Insurance Access. Affordable Care Act (ACA) greatly expands health insurance and will reduce uncompensated care. Increases planned for CHCs (but funds may not materialize). Cuts funding for safety net hospitals (Medicaid DSH). 2

3 Divergent Paths in an Uncertain Future Health reform is overturned. Number of uninsured will continue to escalate. Health grant funding in trouble. Traditional role of safety net continues, but more uncompensated care and less funding. Charities and free clinics can t fill the gaps. Health reform implemented, roughly as planned. # uninsured & uncompensated care costs fall. Role of the safety net will change, but evolve. Health grant funding still in trouble. 3

4 How the ACA May Affect Florida Non-elderly uninsured before reform: 4.0 million (26% of pop.) After reform: 1.7 million (11.4%) Net change: million insured (+14.6%) Increase in Federal Medicaid $, : $64.8 billion Increase in state Medicaid $, : $2.4 billion. Source: M. Buettgens, et al. 2011a & b, Urban Institute 4

5 Issues Converge at the Safety Net Many of the most pressing health issues converge at the health safety net: The uninsured & vulnerable The newly insured, especially Medicaid Access to care, including urban and rural care Integrating care to improve quality and efficiency Health disparities Foundations need to have an agenda to strengthen the safety net and to help it evolve. 5

6 Lessons of Massachusetts Health Reform Level of uninsured fell greatly, but safety net utilization rose. Expanded insurance led to higher demand for care, particularly ambulatory care. Regular system of physician care couldn t keep pace. Safety net patients generally satisfied with safety net providers. When the uninsured got insurance, they typically continued to use safety net providers. Source: Ku, et al. Arch Intern Med, Aug

7 Massachusetts CHC Caseloads. 31% Growth from 2005 to Pvt. Insurance Medicare CommCare/ Other Medicaid/ CHIP Uninsured Source: UDS data 7

8 Growth in Hospital Utilization by Safety Net Status % 4% 2% 2% Inpt Admissions Safety Net Ambulatory Care Other Hospitals Source: Data from Mass Dept of Health Care Finance & Policy 8

9 After Reform, Uncompensated Care Volume Fell More Than One-third, But Rose Again as Recession Continued 1,526 Uncompensated Volume in 1,000s 1, CHC Hospital Source: Mass DHCFP Reports 9

10 Reasons for Using Safety Net Provider Reason Convenient Affordable Availability of Other Services Problem Getting Appointment Elsewhere Staff Able to Speak Patient s Primary Language Percent 79% 74% 52% 25% 8% Source: 2009 MA Health Reform Survey 10

11 Regardless of Progress in Health Reform Strong pressure for improving efficiency and quality of medical care. Common solutions involve improving the coordination of primary, specialty and inpatient care Increased use of performance-based payments Greater use of patient-centered medical homes/health homes Increased use of managed care, whether thru capitated managed care (in Medicaid) or Accountable Care Organization type arrangements. 11

12 CHCs Can Lower Overall Medical Costs Analyses of 2006 Medical Expenditure Panel Survey shows that CHC patients have 24% lower annual medical expenditures than non-users, after controlling for health status, insurance, age, gender, etc. Lower ambulatory, ED and inpatient costs Other research also shows that CHCs provide good quality primary care and reduce unnecessary hospitalizations. Can greatly reduce medical care costs in the future if CHCs are able to expand as planned. Source: Richard, et al. J Ambul Care Mgmt 2012, Ku, et al

13 Near Term Issues Can safety net providers survive state/local budget cuts? Some hospitals in trouble. Local health depts shrinking. FQHCs more stable, but not growing as planned. Safety net providers want to improve quality: patientcentered medical homes, EHRs, integration of behavioral and physical care. Will they have resources and staff to achieve these goals? What about other system transformations like ACOs? (Managed care growth may be more important.) 13

14 Budget Control Act of 2011 Cuts discretionary funding by $917 billion over 10 years thru appropriations process, beginning 2012 Super Committee failed, so automatic cuts (sequestration) of $1.2 trillion planned over 10 years, beginning Medicaid & CHIP protected. CHCs & Medicare payment cuts limited to 2%. Main impact on discretionary funds. Expected impact: by 2021, 17% cut in non-defense discretionary funds, relative to 2021 baseline. BCA could be revamped, but is current law. 14

15 Other Longer Term Issues How much will safety net providers be able to participate in new health insurance exchange plans? ACA requires inclusion of essential providers but no guarantees. Even if Medicaid eligibility grows, will Medicaid payment rates be adequate? Which safety net providers will be able to compete in performance-based payment systems? Will there be enough primary care manpower? Needs will vary by state. 15

16 Level of State Primary Care Challenges: Ratio of Medicaid Expansion to Primary Care Capacity OR CA WA NV ID UT AZ MT WY CO NM ND SD NE NE KS TX OK MN IA MO AR WI LA IL MS IN MI TN AL OH KY GA WV SC PA VT VA NC NY NH ME DE CT NJ MD DC MA RI AK FL HI < >140 Source: Ku, et al. NEJM 2/11 16

17 Expand Primary Care Clinicians Need to expand pool of all primary care clinicians, including MDs, DOs, NPs, PAs, as well as RNs and medical assistants. Must increase use of team-based care. Non-physician clinicians used less in states with lower primary care supply. Need to expand community health centers. Serve medically underserved areas, inexpensive and efficient use of health care providers. 17

18 References Buettgens M, Dorn S, Carroll C. ACA and State Governments: Consider Savings as Well as Costs: State Governments Would Spend at Least $90 Billion Less With the ACA than Without It from 2014 to 2019, Urban Institute, July 2011 Buettgens M, Holahan J, Carroll C. Health Reform Across the States: Increased Insurance Coverage and Federal Spending on the Exchanges and Medicaid. Urban Institute, Mar Ku L, Jones E, Shin P, at al. The Role of the Safety Net after Health Reform: Lessons from Massachusetts. Archives of Internal Medicine, 171(15): , Aug. 8, Richard P, Ku L, Dor A, et al. Cost Savings Associated with the Use of Community Health Centers. Journal of Ambulatory Care Management, 35(1): Jan-Mar Ku L, Jones K, Shin P, et al. The States Next Challenge Securing Enough Primary Care for an Expanded Medicaid Population. New England Journal of Medicine,364(6):493-95, Feb. 10,