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Session Three - Effects of Market Change on the Safety Net

LEN NICHOLS: It’s my pleasure to welcome you to this afternoon’s session. You know, I think the events of the last three months have been such that we’ve all reexamined a number of assumptions and hypotheses that we’ve had over time. And one of the things I’m sure you’ve all been doing is reading the Koran and learning how indeed the three major monotheistic religions are similar. And I think it’s fair to say all three do make it very clear that every society should be judged by how it treats the poor and the sick. And I think it’s fair to say that this topic this afternoon is a perfect one for us to focus our energies on deciding how we as America will be judged. And we’re pleased to have a marvelous paper to kick it off and a great panel to discuss it.

The paper is going to be presented by Laurie Felland, who is an analyst at HSC, where she helps manage the site visit collection process for the Community Tracking Study. Laurie’s research interests span both health care safety nets as well as Medicaid managed care, implementation of the SCHIP program, and the effects of managed care regulation.

Now, lest you think Laurie is merely an ivory-tower person, like in some sense you could level that charge at myself, Laurie has actually worked in the People’s Republic of Massachusetts for the Department of Health Care Financing and Policy, and she has also worked in the private sector in Minnesota for HealthPartners, and then she decided to come back and do real research for a living. So Laurie’s going to give her talk.


I’m very pleased to be here today to talk about the findings from our safety net study, and I would first like to acknowledge my colleagues on this project. They are Andrea Benoit, also from HSC; Larry Brown from Columbia University; and Aaron Katz and Patricia Lichello from the University of Washington.

While this may be surprising to some of you, we have found that the safety net was stable or improved in most cities over the last six years, despite dire predictions and some notable exceptions. These stronger communities can teach us a number of lessons to help maintain and advance the safety net, especially as gaps persist and the weakening economy presents new pressures.

In this study, we took a comprehensive approach to determine the health of the safety net. We were able to track its status over a six-year period between 1996 and 2001 through three rounds of the CTS site visits. We defined a safety net as the infrastructure that provides inpatient, outpatient, and emergency care to the low-income uninsured, in general, those in households earning less than 200 percent of the federal poverty level. We did not include other vulnerable yet insured populations, such as those covered by Medicaid, SCHIP, or other public insurance.

Although we are not focusing on the publicly insured, the providers who care for Medicaid, SCHIP, and the uninsured are often the same. We obtained the perspective of these providers, namely, the public hospitals, plus private hospitals that are major providers of charity care. We also spoke with community health centers, free clinics, and local health departments that offer direct medical services.

In addition, we gained a vantage perspective on the safety net from state and local policymakers as well as academics.

In our interviews, we focused on the forces affecting the health of the safety net as well as provider and policymaker responses. We assessed the changes in the safety net through two primary components: capacity and viability.

First, capacity is the ability of a community to meet the demand for charity care. Such demand is dependent on rates of uninsurance and poverty. Changes in capacity were signaled by significant expansions and contractions in facilities and services.

Secondly, viability is the safety net’s ability to maintain and improve that capacity, demonstrated by changes in the financial position of the major safety net providers as well as levels of charity care subsidies. Ultimately, capacity and viability affect the uninsured’s access to charity care.

Over the last six years, a number of market and policy changes affected safety net provider’s ability to finance care for the uninsured, both directly and through cross-subsidies.

First, this was a period of unprecedented economic growth that generated charity care dollars at the state, federal, and local levels and helped contain demand for services. Secondly, the new State Children’s Health Insurance Program insured many low-income children and provided a new revenue stream for safety net providers. And some revenues from the national tobacco settlement and tobacco taxes started to go to the safety net.

On the downside, however, increased managed care penetration put downward pressure on reimbursement for both publicly and privately insured patients. And the movement to Medicaid managed care meant that safety net providers now had to compete for the Medicaid beneficiaries as they gained access to mainstream providers. Plus the 1997 Balanced Budget Act reduced funding, for example, by cutting disproportionate share hospital funds and eliminating floors on Medicaid reimbursement.

But within this context, the safety net stabilized or improved in two-thirds of the CTS sites over the last six years, as measured by changes in capacity and viability. In general, the strong got stronger, as you can see by the groups of sites in the upper-left-hand quadrant. But there was some variation as a few sites, like Greenville, improved and historically strong Cleveland struggled.

The extent to which changes among individual providers affected overall capacity and viability depended on the structure of the safety net in that site. In general, the situation of the core safety net hospital and health centers drove the classifications.

During this time period, the only two hospital closures were in Cleveland, one of which was Mount Sinai that J.B. referred to earlier. Many core safety net hospitals grew stronger and expanded their services.

A number of new community health centers opened, and many existing centers expanded. While a few smaller health centers did close, more common were relatively minor cutbacks in services or hours of operation.

Now, I’d like to note that these classifications present the overall trend in a particular market. All of these communities faced multiple ups and downs during this period. And, of course, the strongest and most improved sites still faced challenges, and weakened communities still provided services to many uninsured.

I will now discuss the key forces that contributed to these changes, and I will start with the sites on the left-hand side of the table that have stabilized or improved.

These safety nets stabilized or improved their position with the help of two overarching factors: underlying favorable conditions and strategies to improve their capacity and viability.

To start, most of these safety nets had a relatively supportive environment with numerous resources, both human capital and financial. These communities placed a high value on care for the uninsured, demonstrated by the existence of active advocacy groups and other community efforts.

Although the level of support was often entrenched in the local culture, it was not necessarily stagnant. For example, the Greenville community greatly increased its focus and commitment to the safety net after reports at the beginning of our study drew attention to its weaknesses.

Also, the major safety net hospitals received relatively generous and ongoing external funding. For instance, the core of Miami’s safety net, Jackson Memorial Hospital, boosted charity care and generated surpluses, with the help of significant funding from local property and sales tax revenues.

The third condition of these sites was strong leadership. Leaders at the state, community, and organizational levels helped the safety net adapt to various pressures. For example, the collaboration of leaders in Boston allowed the area’s largest community health center to emerge from bankruptcy, with few disruptions in patient care, and become viable.

Safety net leaders and policymakers also implemented various strategies, those that improved financial viability and those that expanded capacity.

The first of the strategies that I’ll talk about were those that relied on financial management to cut costs and boost revenues. First, many safety net providers streamlined their operations to improve efficiency. For example, the Maricopa Medical Center, the public hospital in Cleveland--I’m sorry, Phoenix, emerged from major financial difficulties by bringing in a hospital management firm. Operational changes and staff layoffs improved cash flow and reduced their costs.

Secondly, a handful of safety net hospitals merged with other hospitals, allowing them to expand their financial base and increase market leverage while maintaining their mission to care for the poor. And other affiliations allowed providers, particularly community health centers, to reduce overhead costs by sharing administrative functions.

The merger that formed Boston Medical Center and its subsequent affiliations with area health centers allowed the organization to reduce costs and increase the number of patients it treats.

The providers’ third key financial strategy was to attract the publicly and privately insured. To accomplish this, these providers improved their facilities and processes and some formed Medicaid and SCHIP health plans. To the extent possible, providers also attempted to convert their uninsured patients to Medicaid or SCHIP or public health insurance. Virtually every safety net provider in our sites conducted intense outreach efforts to help their uninsured gain access to these programs.

In Seattle, for example, Harborview Medical Center built a new hospital and improved customer service to bring in more insured patients. They also successfully converted many of their uninsured to public insurance coverage.

Safety net leaders also implemented a number of strategies to expand capacity. First, many communities added physical capacity and services. They built new health centers, and existing centers and hospitals added outpatient facilities, services. In addition, some providers expanded their interpreter services, they added specialty services, and they extended their days and hours of operation.

Many communities also expanded the pool of providers to serve the uninsured through direct funding or reimbursement for particular services. For example, Miami’s Public Health Trust that historically supported only Jackson Memorial Hospital started to distribute money to other area providers to create a community-wide safety net network and improve access in underserved areas.

Finally, many strategies encouraged patients to access primary and preventive services instead of using the emergency department as their primary source of care. A number of the strongest safety nets, like Lansing, developed programs to facilitate and coordinate this movement. This concept is often referred to as managed care for the uninsured.

The programs in our sites expanded enrollment over the last few years and helped reduce inpatient length of stay and emergency department utilization. And there’s more information about these programs in your binder.

We’ll now move to the sites on the right side of the table and outline the forces that contributed to their difficulties.

A number of communities faced somewhat unique market and policy pressures that led to financial losses as their major safety net hospitals. First, the closure of safety net facilities can hurt both access to care and the viability of the remaining providers in the site. This is what happened in Cleveland. The demise of two smaller safety net hospitals created a gap in services in their neighborhoods, as well as strained capacity at the public hospital, Metro Health. The influx of charity care contributed to losses for this otherwise healthy organization.

Secondly, in some markets, the major safety net providers encountered greater competition for insured patients. This was the case in northern New Jersey and Little Rock. Newark’s University Hospital suffered from a growing disparity between urban poverty and suburban wealth, as well as its geographic proximity to well-regarded hospitals in Philadelphia and New York.

Little Rock’s University Hospital, the major provider of adult charity care in that site, suffered from not being part of the area’s largest health plan network, as well as declines in revenues from bone marrow transplants, which had been a large source of cross-subsidies for charity care at that hospital.

Finally, some communities lacked the resources that stronger communities enjoyed. Our three weakened safety nets received very limited external dollars to help cover their demand for services and cushion the blow from these other pressures.

Now, it’s not that these weakened sites did not demonstrate any of the conditions or strategies of the stronger sites. Leaders in these communities have started to try different approaches to improve their position. For example, community-wide efforts in Cleveland are promoting the importance of primary care in the wake of the hospital closures.

So how did all of these changes in capacity and viability affect uninsured people? The good news is that respondents in the stronger communities told us that access to primary and preventive care has improved. This was largely due to the expansion of outpatient facilities, as well as strategies to help redirect patients to more appropriate venues for care.

However, serious problems remain. Despite some improvements, most respondents pointed to inadequate access to specialty services, particularly dental and mental health care. Communities often lacked enough providers willing to offer these services to the uninsured.

Respondents also voiced concerns that some of the strategies to improve financial viability may actually impede access to care, such as strict cost sharing and reduced staffing. And the safety net remains in a precarious position, especially given the pressures of the current recession. Unemployment and insurance premiums are rising, which will increase the number of uninsured and drive up the demand for safety net services.

At the same time, strained state and federal budgets may limit public insurance coverage and cut the direct funding to support the safety net.

Our findings demonstrate that the Nation’s safety net has survived various pressures and even grown stronger over the last six years. Favorable economic conditions, supportive environments, and effective strategies help mitigate the effects of challenging market and policy fluctuations. However, gaps in care persist and new serious pressures have emerged. Policymakers can help the safety net hone their strategies to maintain their health and focus on remaining problems, such as access to specialty care.

Moreover, the safety net in a number of communities remains weak. Targeted assistance could help struggling communities adapt effective strategies to meet their particular market and policy conditions.

For example, leadership development could help vulnerable safety net hospitals leverage their existing resources and build affiliations with other providers in the community. Such changes could improve providers’ financial situation while also expanding services to outpatient care.

To insure ongoing access to care, the safety net likely with require further reinforcement. Customized and long-term approaches will help build a safety net that is healthy both across communities and over time for the millions of individuals nationwide who lack other means to health care services.

Thank you.


LEN NICHOLS: Nice job, Laurie.

We have quite a panel of uniquely qualified individuals to speak to you about the issues raised by Laurie’s paper.

First I’ll start with Bruce Bragg. He’s the Director of the Ingham County Health Department in Michigan--that’s Lansing, in case you don’t know Michigan as well as some people have learned it lately. They do produce things other than basketball players. That’s a good thing to know. I appreciate that.

The Health Department there is indeed quite unique because it supports the operation of direct care delivery and obviously the usual public health functions, but it also actually does research, which I’m a little bit nervous about. But, nevertheless, they do compete with us academics, and they do do research on a number of topics, and that allows Bruce to speak with great knowledge with the stakeholders in the area as they work toward making Lansing work. And you will recall Lansing was one of the safety nets that did very well in Laurie’s chart.

Then we will turn to Marion Lewin, who actually--I have been thinking about this now all morning--holds the distinction of having published the most articles of any human being I have not met in health policy. So it’s very nice to meet you, Marion.

Marion, as you know, was at the Institute of Medicine for a very long time and was the head of the Office of Health Policy Programs, and particularly important to this topic, she recently served as the study director for the major study that IOM did on "America’s Health Care Safety Net: Intact but Endangered," which was published just last year. And, therefore, she’s uniquely qualified to talk about these trends as they span the nation. Before IOM, of course, Marion was at AEI and now has a quarterly Washington outlook section for the Journal of Medical Practice Management. So she’s actually drifting into journalism, I suppose would be the fair statement there.

Let me start with Bruce because, again, looking back at Laurie’s chart, Lansing is clearly an area where the safety net works. Can you tell us what seems to you to be unique about it, and sort of why? How do you make it work up there?

BRUCE BRAGG: Well, I guess as the staff for the Center for Studying Health System Change have learned as they’ve gone around to these 12 communities, every community is--if you’ve seen one community, if you’ve visited one community, you’ve visited one community. We are all different.

But I do believe that the characteristics that are pointed out in the paper are correct. I think that the conditions that are--the underlying conditions of community support, ongoing--I don’t know where the term "generous" came into this, but ongoing generous funding streams and strong leadership are important if the--to be able to sustain the safety net over time.

Certainly in Lansing, that is the case. We have a history where the community, not just the individual institutions but the community, has a strong commitment to providing health care services to uninsured. We have, I think, very--we have long-serving, stable staff, people in leadership positions, both in public employment and in the health care institutions. They have good reputations and rely on one another, can rely on one another to make decisions and to make--to create relationships so that they have those relationships be implemented. So there is a substantial amount of trust.

We were forced to innovate, in a sense, when we--we had been providing service for a long time there to uninsured in kind of an episodic manner. This was going on through community health centers, a number of community clinics, the hospitals, and then the State of Michigan decided to move its Medicaid program to managed care.

Everybody had been encountering the system in kind of an episodic manner, and when you take part of it out and set it up in a managed care arrangement, it leaves completely exposed the uninsured people who had been part of a mix with Medicaid-eligible people. So the system really had to innovate, or we would have been like some other communities in not being able to address that need.

We were also fortunate at that time to be the recipients of grants from the Robert Wood Johnson Foundation and from the W.K. Kellogg Foundation, which allowed us to convene the community to talk about this problem and to work, truly work with the community to further develop commitment to this concept of--to the community commitment to providing health care to uninsured persons.

We also had in Michigan a situation where the State of Michigan, although it was not interested in being an active partner--that is, they didn’t want to take on the health care for uninsured persons as a program or a challenge to the state--was willing to be a passive partner. They were willing to work with us to do what they could to support our efforts.

And I would say those are the major conditions that existing Lansing.

LEN NICHOLS: Excellent. Thank you.

Marion, would you say your research nationwide confirms that those are the important features and that the safety net has been as resilient as Laurie’s report suggests?

MARION LEWIN: Well, our study did use the word "resilient" many times, and I certainly would agree with that description of the safety net. And I think this is a nice paper and really moves the discussion forward.

As I read the slides and also the paper, I felt that our study was a little bit of a different degree of emphasis. Our study was called "America’s Health Care Safety Net: Intact but Endangered." I guess Laurie’s assessment would be the health care safety net, endangered or precarious but intact.


MARION LEWIN: There were just a few aspects that struck me when I read the paper, although I feel that we have more in common than there are differences. I do want to underscore what Bruce just said, that our study certainly found that there really is no nation safety net. It’s very hard to generalize at all about the state of the safety net, of our country’s safety net, because it is so heterogeneous, it varies so tremendously across communities, across states, so that if you see one safety net infrastructure or one safety net environment, you’ve seen one safety net environment. And I think it’s very important when we have studies like this to underscore that, that these are very individual situations, and it’s very hard to generalize across the country. And I think that is a problem because one day we would like a safety net that if you say it’s intact or if it’s endangered, that you’re saying something which really applies across the country.

Another characteristic of the changing safety net that concerned the IOM committee was to the degree that safety net systems across the country were adopting, trying to adopt successfully and energetically to the new demands of Medicaid changes and Medicaid managed care, the growing tension between mission and margin, and we felt that--the committee was concerned that at the losing end of that battle between mission and margin was what was happening to the uninsured as safety net providers were given stronger incentives and really imperatives to try to attract more Medicaid patients, more paying patients. So that they still were committed to the uninsured, but we found that the uninsured, in order to get care, had long waiting times. It was more difficult to get an appointment, clearly much more difficult to get specialty care, and also because there were new options for Medicaid beneficiaries, especially, we found that among safety net providers and their patient load there was much more churning. And the committee felt that that really impacted continuity of care, and even the appropriate delivery of preventive and primary care services, because these patients, when they got insured, might go to a Medicaid managed care organization, and when they became uninsured, they went back.

So the churning would have an impact or could have an impact--we saw that it did have an impact on many safety net providers.

Clearly--and I’m happy to see that the new health care environment was really a wake-up call to safety net providers. I think that everyone who wanted to stay in business realized that they would have to change the way they practiced, and they would have to adopt businesslike practices to become more patient oriented, to become more efficient and more accountable. And, according to Laurie’s findings, that many of the safety net providers have taken those incentives very seriously and have improved their condition.

LEN NICHOLS: Laurie identified a number of strategies that different safety nets have employed, and I wondered--I’d like to ask both Bruce and Marion this question. Are these strategies transferable? Particularly for you, Bruce, did you look to other areas when you had to adjust to this Medicaid managed care reality and sort of see how they did it? And could you learn from someplace else, or did you make it up on the fly? Because you all, after all, are creative and clever up there in Michigan. And, Marion, I’d like you to speak in general to that question.

BRUCE BRAGG: Well, we did look to other communities. We worked with people, with consulting groups to study other communities that had been successful, and as you know, there are a number of them around the country, a number of communities where they have done a fantastic job of addressing the needs of--a very few have done a very fantastic job of addressing the needs of low-income uninsured people.

But, in general, I have to say we made it up as we went along. We looked for advice, but communities are so unique that it’s hard to take something--just take something and move it from one community to the next, particularly from one state to another, because they’re just--there are a lot of things about the infrastructure that are particular to states.

So I would say that there are certain kinds of things that we--certain aspects of what we’ve done that I believe are clearly transferable and actually are being transferred in Michigan at the moment, and may be transferable--some of the things that we’ve done may be transferable to other places across the country.

But I don’t think it is possible just to take one model from one community and place it in another community and have it work any more for--well, maybe particularly for services to address the needs of uninsured and low-income persons.

MARION LEWIN: I think that’s true. Clearly, as we underscored again and again, safety net systems are very unique to their community and their characteristics are unique to their communities and the patients that they serve.

We did make up a list and actually worked quite hard on this list of what are the key components of a successful safety net provider. We sent a little questionnaire to many, many people and then on that basis had a list. And I really think that what was on top of that list--I don’t have the book in front of me--is leadership. I think that that is really critical.

Another one is political support, you know, someone who is a wonderful leader but almost as good a politician, someone who--well, the model that is always used is Pat Gibeaux (ph) and Denver Health, one of these really successful safety net systems. And she was on the committee, and she says, "I never saw a dollar that I didn’t like."


MARION LEWIN: It’s really the active pursuit of funding streams, and also to really make it known to your community that you are an essential provider, not only for the poor and uninsured, but for other people as well, in the case of a public health, you know, burn, trauma, HIV care.

And then I feel that a key component which has to be transferable across the country at one point is to be a good businessman as well. That doesn’t mean--I don’t think that safety net providers should be asked to be a business, because they’re not, and we want them to maintain their mission. But to the degree that they can adopt the best management and businesslike tools to be successful, I think that is critical. And I feel that in the future these are skills that are going to be required of all the providers, no matter where they reside.

LEN NICHOLS: Very good. Laurie also noted--and this particularly struck me--that access to specialty care seems to remain a serious problem, even in markets which seem to be doing relatively better. So I guess particularly from the IOM perspective, what--

MARION LEWIN: Well, that is real--I mean, actually the reason why I didn’t come to this morning’s session--and I know I missed some really good panels--is I’m on the Board of Providence Hospital and we had an emergency board meeting because of the fallout of the closure of D.C. General. And one of the main topics of conversation--well, first of all, the system is just getting up--gearing up and it’s not very smooth by any means at this point. Hopefully it will get better.

But one of the main, main problems right now is that even if you can get these former patients from D.C. General into primary care, there is no one that you can get for specialty care. No one even answers the phone. And if you’re critically ill, you may have a five-week wait. I mean, clearly, if you’re really critical, go to the emergency room.

That’s an extreme case. But certainly in our study we saw that the provision of specialty care is an ongoing problem, and it’s, you know, reminding me a little bit as I came in and Janet Corrigan was talking about when we sit here nine years from now, you’ll see the expansion and the wide adoption of e-health, which I think will be the case. But you’re going to have to provide incentives for providers to be responsive to that.

We were very supportive of the CAP program because that at least gave safety net providers and other providers in the community a chance to look at how can we best treat the poor and uninsured and what package of services do we have to put together to provide them continuity of care, specialty as well as primary care. But it will need some incentives and probably need some money and we’ll probably--we’ll definitely need more integration of services.

LEN NICHOLS: Bruce, is there anything in Lansing about specialists that is noteworthy?

BRUCE BRAGG: Well, I can tell you that it’s a real problem. It’s one of the challenges that we’ve not been able to deal with successfully. So I can tell you it’s a problem. What I can’t tell you is how to fix it, because we haven’t--we just haven’t succeeded in fixing it.

What we have done in Lansing is to create a health plan, not insurance but a health plan for uninsured persons which really assures people within a network of providers that they will have access to certain kinds of care. Certainly everyone is linked with a primary care physician, and then through that physician, they are to have access to specialty-care physician services, pharmacy, laboratory, X-ray services.

And our original--we went into all of this with the idea that we were going to keep the administration of this spartan. We were going to capitate everything. We felt that people would have an incentive--would have a commitment to the community and to these kinds of services and would buy into this.

And, indeed, we were able to capitate everything, except for specialty-care services. We got no takers. And we still have no takers. I mean, we started out paying a discounted Medicaid rate and quickly had to change that strategy. So we now pay Medicaid rates to specialty-care providers, and we’d probably pay more if we thought it would make any difference. But I really don’t think that it does or that it would make a difference.

So this is a real challenge to anyone trying to put together a network for low-income uninsured people. Actually, it’s a challenge beyond that. It’s a challenge in our community to get specialty-care physicians to meet the need for Medicaid-enrolled persons also.

LEN NICHOLS: Medicaid as well, yes. Okay.

To what extent do each of you think that the strength of the safety net or the continued viability of it really is driven by the very strong economy we’ve had in the last few years? And then, obviously, the follow-up question is: Given that rumor has it the economy is weakening, to what extent are we in for hard times?

MARION LEWIN: Well, the safety net system I think will persevere because it is very resilient. Sometimes it ends up getting even more support in downturns, at least--because there is this perception that you really need this safety net. And other initiatives--I mean, certainly the first choice is always to expand coverage and to expand insurance. But if that is still a long way down the pike, there is at least the sense that you have to maintain the safety net, which will always be fragile and always underfunded. I mean, that’s kind of a view from 30,000 feet.

Unfortunately, as you look at what states are doing--I’m involved in planning a meeting dealing with the Commonwealth Fund’s Vision 2020, and we called it "How to Expand Insurance: The Issue of State Flexibility." And when we sent out initial invitations, everyone--the state Medicaid directors and other health care leaders--said, "I’m not coming to any meeting that’s called "expanding insurance coverage," because the name of the game is maintaining and not reversing.

So I think it is going to be another precarious time. I think that the safety net will prevail and, you know, we’ll keep on getting reports that they’re resilient but failing or resilient and looking a little bit better. But I know that time is disappearing, so I do want to get in my pitch because I think it’s important when you look at the future of the safety net. That is, our major recommendation was the need to have better monitoring and tracking of the safety net and its performance, and we discussed this today and all the other discussions that I’ve been to, I still think that that is such an important need.

Fortunately, it’s being addressed. At least to some degree, AHRQ is trying to really develop a monitoring and tracking capability. And someone who was on the IOM committee is now on leave from NYU working to set that up, because when you--you know, we keep on focusing on financial viability, and really what I think we have to start looking at more closely is performance. It’s not only are they surviving, but what services are they performing? How well are they performing it? What populations are being served? How well are they being served? If the safety net provider is endangered, can you have an early-warning system?

During the study, when you do one of these studies, you do collect a lot of anecdotal information, but I remember I called a health care director in New Hampshire, who used to be a prominent researcher at the Urban Institute, and I asked him about the financial viability of the safety net in New Hampshire. And he said, "Well, you know, they’re resilient, they’re surviving. But, you know, I really have to learn more about what they actually do." And he didn’t mean it really in a negative way, but it is a little bit of a black box. The services, you know, when they have financial difficulties, what services they drop; when they’re a little better off, what services they add. And so it’s to look behind just the financial viability to see what system is this and how well is it serving the people that most rely on them.

LEN NICHOLS: Good. Well, let me begin to ask people to come to mikes, but the last question I wanted to ask both of you--and I’ll start with Bruce--because we have a number of people out there who either are federal policymakers’ staff or, more precisely, are teachers of federal policymakers’ staff, the Congressional Budget Office and General Accounting Office and other places around town. So I want to ask a question: What kinds of lessons should federal policymakers draw from what we know from your community, Bruce, and from the nation as a whole? And then you can begin lining up at the mikes to ask your own questions.

BRUCE BRAGG: Well, this is a good question because I really think that the opportunity to innovate, the opportunity to address these kinds of issues at a community level require supportive federal and state policy. It’s not as though you can solve these problems at the federal level. Although the expansion of Medicaid and SCHIP have been significant--this is very important--along with the expansion of the community health centers, they really represent, I think, a substantial chunk of the increased capacity and the strength of the safety net that you have been able to study.

But if you’re going to deal with--one of Laurie’s--or one of the paper’s findings and conclusions is that communities ought to be able to develop their own kind of unique approach to this thing. And I’m a very firm believer in this. I think when you get down to the most difficult problems in communities, it has to be done community by community. But what the federal and state policymakers can do is provide the capacity to do that.

It’s important, I think, to be able to--for states and communities to be able to use federal participation, federal Medicaid participation in their efforts to address the needs of low-income uninsured people in their communities. So this is an attitude--that’s the biggest incentive that communities have, the biggest resource that they have to want to even get involved in this thing. They don’t have to do it all on their own backs. They can have some support from the Federal Government.

So I think it’s extremely important to maintain that flexible and supportive policy.

MARION LEWIN: I’ll be brief. I agree with Bruce. You know, clearly, the safety net will always require ongoing federal support and guidance, as well as state and local support, financial support and political support.

But, also, I do believe that to collect better data, again, the need to monitor and track the safety net to really see what is going on and how safety net providers respond to different political and economic and community, local economic environments is a critical gap right now and one that needs to be filled.

LEN NICHOLS: Okay. Any questions from the audience or clever ideas about how to deal with specialists or federal funding?

[No response.]

LEN NICHOLS: I take it you’re all ready for Medicare. Okay.

MARION LEWIN: Here comes a question.

LEN NICHOLS: Okay, good.

LINDA QUICK: Linda Quick, South Florida Hospital and Healthcare Association. I was curious as to how you think the safety net institutions around the country are going to cope with increasing criminalization of the word "immigrant" and the fact that so many of the people that they serve are in that category.

LAURIE FELLAND: Well, in all of the sites, it seemed that the increasing number of immigrants was a huge, huge issue. And the criminalization of--that didn’t really come up as a topic. I mean, I think the providers just really felt like there’s all these things during this good--this period of a strong economy that are helping to contain demand for services, yet at the same time the numbers of people who need services are expanding on an actual number basis versus a percentage basis because of population increases and particularly the number of immigrants.

So I know this is on their minds, and they’re trying--and this is part of the reason they were trying to expand. They’re trying to expand interpreter services, all these things. And oftentimes those resources aren’t there when you have, you know, groups of maybe 12 different new immigrant groups that all require--they all speak different languages and they all require different services. And so they are grappling with that.

BRUCE BRAGG: Actually, this is a problem for federal programs and state programs because there are laws, you know, that obviously--I mean, what you’re speaking to is the fact that Medicaid may be--people--Medicaid may not be able to enroll people who are eligible for--or may not be able to enroll illegal immigrants and other programs might not. But, actually, local solutions can. The Ingham Health Plan does not ask anyone for its citizenship. It simply is committed to providing access to an organized system of health care for anyone who resides in that community.

So unless someone really gets sticky about the fact that there is Medicaid participation--federal Medicaid participation in the mix of revenue that we utilize, we would continue to provide services to people irregardless of their country of origin or citizenship at the time.

You know, this is sort of a unique situation, but I think you’re going to find more and more and more of these kinds of solutions to community challenges.

JIM VERDIER: Jim Verdier from Mathematica.

A question maybe primarily for Laurie, but others as well. A number of you mentioned the importance of having political support for the safety net, and I wonder if you can get a little bit below that to look at what some of the key ingredients of that political support might be. For example, a publicly owned hospital, Orange County doesn’t have a county owned hospital, Indianapolis does, Lansing does. Is that an important ingredient in generating and maintaining the political support for the safety net?

LAURIE FELLAND: It certainly seemed to be. I think there were, particularly in Cleveland, Metro Health being the county hospital, when it started to face problems and a group formed because I think there is that strong identification with such a facility.

However, similar groups formed in the wake of the closures of the other hospitals, as well, and so those, I think there was individual political support, in terms of elected officials who helped to lead those efforts and really push for it, you know, you can’t close our hospital, and yet the community really did get involved. So I think it’s both. I think, if it’s the hospital in their particular neighborhood, it probably doesn’t matter who owns it, it’s that they will miss the services if they’re gone. So I think it is a mixture of both.

BRUCE BRAGG: Can I jump into this for a second? I don’t think that this is related to public hospitals. It is, certainly, somewhere the community has to be sensitized to this issue of making a commitment to providing care to low-income, uninsured persons, indigent persons in their community.

Lansing does not have a public hospital. Ten years ago, it did have a hospital that was in the name of the county, but that had not acted like a public hospital for 40 years. So the interest in Lansing comes from elsewhere. It comes, essentially, a public commitment to wanting to provide services to uninsured, low-income residents. So exactly where that generated, I don’t know, but there are other places in Michigan that are now beginning to generate that same interest, given our success.

MARION LEWIN: I think, also, I feel that for a long time community health centers and even public hospitals, although they have really very, very effective representation in Washington, but out in the field, that community health centers, especially, I mean, felt that they were doing God’s work and that they didn’t have to make a case for why they should stay in existence. I mean, we treat the poor, we treat the uninsured, we don’t have fancy offices. Of course, we’re good. Just send the money.


MARION LEWIN: And I think they have realized, and realized wisely, I mean, I really do believe that they are, for the most part, really a unique set of providers. As I went across the country as a part of doing this study, I must say I was really, really impressed. This is not a glamorous job to work in a community health center, but they do have to be responsive to this new managed care competitive environment.

If your safety-net provider, along with all of the other providers in the community, you have to make a business case of why you should stay in business and have support for your business. I mean, first of all, you have more competition, especially for Medicaid patients. So, when you see these effective leaders of safety net organizations, they’re really, they’re very, very talented at cultivating political leaders, cultivating the community, making a case, sending out the information. It’s a continual effort, and they do it very, very effectively, and I think it’s critical, and I think there’s a high payoff if you do it well.

LEN NICHOLS: Well, on that happy note, let’s say again to Medicare, we know there’s a high payoff in doing it well or not, it doesn’t really matter. But, anyway, thank you very much.


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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.