Fresno: Health Providers Expand Capacity, but Health Reform Preparation Lags

CHCF Regional Markets Issue Brief
December 2012
Joy M. Grossman, Peter J. Cunningham, Lucy B. Stark

As part of the California Health Care Almanac project, the California HealthCare Foundation (CHCF) funded HSC to conduct interviews in six California communities in 2011-12 to assess how the organization, financing and delivery of health care are changing, including preparations for health reform.

The Fresno region remains one of the poorest areas in California, and the economic downturn has driven Medi-Cal enrollment and uninsurance rates even higher. The population has continued to grow, although at a slower pace than during the early 2000s. These factors have strained already inadequate provider capacity, particularly of physicians. Key developments since the last study was conducted in 2008 include:

• Focus on inpatient capacity. Hospitals are expanding inpatient beds and services to ease overall capacity constraints and to compete aggressively for the shrinking base of commercially insured patients. Most hospitals weathered the economic downturn, although they continue to face financial pressures.
• Little traction on hospital efforts to align with physicians. Hospitals are making efforts to align more closely with physicians, including developing medical foundations to compete more effectively with other provider organizations in recruiting physicians to the area. Most physicians, however, continue to work in independent solo and very small practices and show little interest in hospital alignment efforts.
• Expanded clinic capacity still falling short of demand in underserved communities. FQHCs and hospital-operated rural health clinics are expanding capacity and improving patient access, although demand still outstrips supply. As a result of these expansions, competition for Medi-Cal patients in rural areas is heating up and competition to recruit physicians across the region is growing more intense.
• Limited preparations for national health reform. The region trails other areas of the state in preparing for coverage expansions under reform. Fresno County is one of only a few California counties that have not yet committed to participating in the Low Income Health Plan (LIHP), an optional county program to provide health care services to low-income uninsured adults and transition most enrollees to Medi-Cal once they become eligible in 2014. The second-largest county in the region, Tulare, will get a late start, launching the LIHP in January 2013.

Click here to access the Fresno report at the CHCF Web site.