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Care management for the uninsured: A force field analysis of the business case
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CARE MANAGEMENT FOR THE UNINSURED:
A FORCE FIELD ANALYSIS OF THE BUSINESS CASE
by
Yolanda J. Partida
A Dissertation Presented to the
FACULTY OF THE SCHOOL OF POLICY, PLANNING,
AND DEVELOPMENT
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PUBLIC ADMINISTRATION
August 2001
Copyright 2001 Yolanda J. Partida
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UMI Number: 3054790
Copyright 2001 by
Partida, Yolanda J.
All rights reserved.
_ _ ®
UMI
UMI Microform 3054790
Copyright 2002 by ProQuest Information and Learning Company.
All rights reserved. This microform edition is protected against
unauthorized copying under Title 17, United States Code.
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P.O. Box 1346
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UNIVERSITY OF SOUTHERN CALIFORNIA
SCHOOL OF POLICY, PLANNING, AND DEVELOPMENT
UNIVERSITY PARK
LOS ANGELES, CALIFORNIA 90089
This dissertation, written by
.................... Y o la n d a . J . P a rt id a .................
under the direction o f h.$r... Dissertation
Committee, and approved by all its
members, has been presented to and
accepted by the Faculty o f the School of
Policy, Planning, and Development, in
partial fulfillment o f requirements for the
degree o f
DOCTOR OF PUBLIC ADMNISTRA TION
,
Dean
Date Y.. A?... 2 001
DISSERTATION COMMITTI
Chairperson
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Dedication
Too young for Medicare,
Ruben and Aurelia Rodriguez learned firsthand
the perils of being uninsured.
My father,
now nearly blind, the result o f uncontrolled blood sugar levels,
gave me the passion for this subject
My mother,
now with a heart condition due to untreated hypertension,
taught me to work diligently one day at a time.
With all my love, I dedicate this milestone to you.
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Ac k no w ledg em ents
God has blessed me in this life with many wonderful people who gave of
their time, intellect, moral support, encouragement, patience, and love during this
endeavor. I can only begin to express my sincere gratitude in these pages.
First and foremost, I thank Pam Dickson, Senior Project Officer, Robert
Wood Johnson Foundation, my godmother reincarnated. It is because of Pam’s
intellectual curiosity that the original project was funded, and her support and
advocacy allowed me to use the collected data for this dissertation. God bless you
Pam.
There are no words to express my deep appreciation and thanks to Dr.
Molly J. Coye, my inspiration and mentor. She has been incredibly helpful to me in
this project, in other personal achievements, and in opening doors that I never
knew existed. Thank you, Molly, for your guidance in clarifying the concept of care
management and the focus for the business case.
I credit Dr. Ross Clayton, my Dissertation Committee Chairperson, for the
realization of this milestone. Dr. Clayton, with enormous patience, unwavering
iii
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confidence, and his insider knowledge, guided me in producing a coherent and
readable document worthy of the USC name. Thank you, Dr. Clayton, for
accepting my determination as yours, and for seeing the potential in me to produce
something you would be willing to endorse.
To Emma Tsui I owe my health and sanity. Almost single-handedly, Emma
managed the fledgling fires of my newly founded consulting business while I
hibernated writing this dissertation. I cannot imagine surviving this ordeal without
you—thank you from the bottom of my heart.
As with most important accomplishments in my life, my children play a
marvelous role sustaining my body and soul, providing unquestioned support,
encouragement, and endless forgiveness of mother’s distractions. To Bridgette
Florencia, Lorena Rene, and Aaron Jose, thank you for giving me the motivation to
be a role model deserving of your unconditional praise. Thank you for being who
you are. Each of you reward me with your accomplishments and diligence in living
thoughtful lives and by always being mindful of those less fortunate—you fill me
with pride. To my granddaughter Yasmine Valentina, may this spark in you a love
in learning.
To my family, especially my nieces and nephews, Javier, Jr. (UC Santa
Barbara), Leticia Chavez (Georgetown), Melissa (California University, Fresno),
Jimmy, Jr., and Kat (UC Santa Cruz), Sophie (Masters Institute), my daughters,
Bridgette (Marinello School of Beauty) and Lorena (UC Davis), my son Aaron
(School of Automotive Machinists), and Chael, our adopted nephew, now a
Registered Nurse—thank you. You make me proud for pursuing higher education
iv
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and training. To those that are yet to come, hang in there—everything has an end.
To my sisters, Maria, Elida, and Mona, as well as my brothers, Ruben, Jr., and
Johnny, thank you for the comfort of knowing I have a family that is always there
for me.
To my father, who could have been a rocket scientist with his cleverness
and ingenuity, if not for the economic condition to which he was bom, thank you for
letting me stand on your shoulders. It has taken me a long time to catch up to your
10th grade education.
To my mother, who—with a second-grade education—is wiser than most
psychologists and philosophers, thank you for giving me the grounding that has
served me well in my personal and professional life.
To my wonderful and lifelong friends and supporters, Jayne, Rick, Inwin,
Rosemary, Guillermo, Lisa, Mike, Frances, Elaine, Bob, George, Diana, Terry, and
to my professional support network, Berj, Stan, Lily, Marjorie, Elena, Jim, Lia,
Carmela, Gil, George, Castulo, Michael, Helen, Alaina, Jane, Karen, Genny,
Lucien, Irene, Linda, Steven, Mark, and so many more, thank you all for being
supportive in this and in so many other ways. A special thanks to Sheera, Ngoc,
Emma, Kim, and Diana, the project team that helped with the RWJ project.
Last, but never least, thank you, Darryl, my honey of six years. You have
been there through the worst, shouldering the blame for lack of progress, standing
firmly by me through my bad moods, my unwillingness to talk or share time with
you, and other less pleasant moments. Thank you for your extraordinary patience,
charm and good nature, for making sure I eat, slept, and guarded my health, for
v
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lifting my spirit with your wonderful humor, and for being steadfast in your belief in
me.
Above all, I thank the universe, God the Father, His Son, and the Holy
Spirit, who have been my life companions in everything I do and who every day
smile upon me and fill me with love. It is because of you, that I returned to high
school when in my junior year I thought making $2.15 an hour doing cannery work
was good enough. It is because of you that Mr. Garcia picked me up and
browbeat me into enrolling in Cabrillo Community College, when all I wanted was
to find a husband to support me. It is because of you that I found a path not
traveled by my parents and their parents and their parents before. It is because of
you that I was the first college graduate in my family and the first to obtain this high
honor of a Doctorate degree. I thank you also for the pleasure of knowing that I
will not be alone with this distinguished title in this family for too much longer.
yp
July 1,2001
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Table of Contents
Dedication.....................................................................................................ii
Acknowledgements.....................................................................................iii
List of Tables............................................................................................ xvi
Abstract.................................................................................................... xviii
Chapter 1
Statem ent of th e Pr o b l e m .................................................1
1.1 Access to Healthcare for the Uninsured................................1
1.2 Increased Demand for Safety-Net Services.......................... 4
1.3 Care Management....................................................................7
1.4 Cost Containment.................................................................. 10
1.5 Study Purposes and Premise................................................11
1.5.1 What Is a Business Case Analysis? ................................. 12
1.5.2 Basis for a Business Case Theory.................................. 13
1.5.3 Force Field Analysis Model as an Analytical
Tool................................................................................... 15
1.6 Evidence-Based Analysis.................................................... 17
1.7 Next Chapter Preview...........................................................18
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Chapter 2
Liter a tu re R e v ie w .............................................................. 19
2.1 Domains of Focus...................................................................19
2.2 The Uninsured........................................................................ 20
2.2.1 The Uninsured and Their Care-Seeking
Behaviors.......................................................................... 20
2.2.1.1 Working Uninsured and Immigrants............................22
2.2.1.2 Health Disparities Among Minority and
Immigrant Populations................................................23
2.2.1.3 Delayed or Postponed Care....................................... 25
2.2.1.4 Health Status............................................................ 27
2.2.2 The Nature of Chronic Illness and the
Uninsured......................................................................... 27
2.2.2.1 Access to Healthcare.................................................29
2.2.2.2 Reduced Uncompensated Care..................................30
2.2.3 Business-Practice Considerations........................... 32
2.2.3.1 The Uninsured......................................................... 32
2.2.3.2 Advanced and Preventable Conditions........................32
2.3 Safety-Net Providers...............................................................33
2.3.1 The Characteristics of the Safety-Net........................34
2.3.2 The Safety-Net as a Provider for the
Uninsured......................................................................... 36
2.4 The Financial Context for Safety-Net Providers................. 37
2.4.1 Hospitals................................................ 41
2.4.1.1 Non-Safety-Net Hospitals and
Uncompensated Care.................................................43
2.4.1.2 Examination and Treatment of Emergency
Medical Conditions and Women in Labor..................... 44
2.4.1.3 Disproportionate Share Hospital Payments
(DSH) Program......................................................... 45
2.4.1.4 Academic Medical Centers........................................ 47
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2.4.2 Business-Practice Considerations: Safety-
Net Hospitals....................................................................48
2.4.2.1 Competitive Price-Based Markets..............................49
2.4.2.2 Policy-Based Dependency on Inpatient
Volumes....................................................................50
2.4.2.3 Hospital Conversions and Less Charity Care...............50
2.4.3 Community Health Centers............................................. 52
2.4.3.1 Structure and Funding..............................................52
2.4.3.2 FQHC Cost-Based Reimbursement...........................54
2.4.4 Business-Practice Considerations:
Community Health Centers............................................ 57
2.4.4.1 Community Need..................................................... 57
2.4.4.2 Medicaid and Uninsured Inexorably Linked.................57
2.4.5 Local Funding for the Safety-Ne t .................................58
2.4.6 Business-Practice Considerations: Local
Environments....................................................................60
2.4.6.1 Local Support for Safety-Net Providers...................... 60
2.4.6.2 Population-Based Cross Sector Approaches.............. 61
2.4.6.S Social Justice...........................................................62
2.4.7 Health Plans.....................................................................62
2.4.7.1 Transitioning Safety-Net Providers to
Managed Care...........................................................63
2.4.7.2 Health Plans New Safety-Net Providers..................... 64
2.4.8 Business-Practice Considerations: Health
Plans..................................................................................66
2.4.8.1 Consumer Interest in Quality.....................................66
2.4.8.2 Obligations and Prevention....................................... 67
2.4.8.3 Marketing to the Uninsured....................................... 68
2.5 Changes in Healthcare Financing......................................... 68
2.5.1 Managed Care Economics............................................... 69
2.5.1.1 Members as Revenue Sources..................................70
2.5.1.2 Purchasers as “Member Groupers” ............................7 1
2.5.1.3 Value-Based Provider Selection................................ 72
2.5.1.4 Clinical Autonomy and Accountability......................... 73
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2.5.2 Market Competition..........................................................74
2.5.3 Business-Practice Considerations: Changing
Financial Structures.......................................................75
2.5.3.1 Financial Pressures Limit Cross
Subsidization..............................................................76
2.5.3.2 Competition—A Two-Edged Sword.............................76
2.6 Care Management...................................................................77
2.6.1 Evolution of Care Management...................................... 79
2.6.1.1 Total Quality Management......................................... 80
2.6.1.2 Reengineering and Benchmarks................................ 82
2.6.1.3 Clinical Guidelines and Pathways............................... 83
2.6.1.3.1 Disease Management..................................................85
2.6.1.4.2 Barriers to Change....................................................... 87
2.6.2 Elements of Care Management....................................... 89
2.6.2.1 Providing Person-Centered Care................................ 90
2.6.2.2 Emphasizing Disability Prevention.............................. 90
2.6.2.3 Integrating a Full Array of Services............................. 9 1
2.6.2.4 Targeting High-Risk Populations................................ 91
2.6.2.5 Interdisciplinary Care Teams, Tools, and
Processes.................................................................92
2.6.3 Types of Interventions and Programs........................... 93
2.6.4 Cost Savings..................................................................... 98
2.6.4.1 High Program and Administrative Costs.....................1 0 1
2.6.4.2 Limitations In Documenting Cost Savings..................102
2.6.5 Business-Practice Considerations: Care
Management.....................................................................104
2.6.5.1 Standardize Care.....................................................104
2.6.5.2 Quality and Cost Containment Are Related................104
2.7 Chapter Summary/Preview...................................................105
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Chapter 3
M e th o d o lo g y......................................................................107
3.1 Introduction....................................................................107
3.2 Content Analysis Reviewed....................................................108
3.3 Data Sources for Content Analysis.................................... 110
3.2.1 CMSE Interview s.............................................................111
3.2.2 Survey Sites.....................................................................113
3.2.2.1 Selection of Survey Sites..........................................113
3.2.2.2 Selection Criteria......................................................114
3.2.3 Telephone Survey of Safety-Net Providers............... 115
3.2.3.1 Host Organization Research....................................116
3.2.3.2 Survey Interview.................................................... 117
3.2.3.2.1 Section 1—General Observations............................ 117
3.2.3.2.2 Section 2—Evaluation................................................118
3.2.3.2.3 Section 3—Cost Tracking......................................... 118
3.2.3.2.4 Section 4— Program Description.............................. 118
3.2.4 Case Studies....................................................................121
3.2.4.1 Case Study Site Selection.......................................122
3.2.4.2 Site Visits............................................................... 124
3.3 Next Chapter Preview.......................................................... 126
Chapter 4
Fo r c e Field A n a l y s is.......................................................127
4.1 Introduction..........................................................................127
4.2 Force Field Analysis Model..................................................129
4.3 Theorized Business Case....................................................131
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4.3.1 RWJ S tudy Findings...................................................... 132
4.3.2 Business Case Suppositions..........................................134
4.4 Environmental Context for the Business Case..................137
4.4.1 The Uninsured................................................................ 138
4.4.1.1 Core Safety-Net Providers........................................ 141
4.4.1.2 Safety-Net Providers Have Different
Business Case Considerations.................................. 142
4.4.1.3 Differences in Structure...........................................143
4.4.1.4 Differences in Services Emphasis.............................147
4.4.1.5 Differences in Funding Mechanisms and
Subsidies................................................................ 151
4.4.1.6 Policy-Based Dependency on Medicaid.....................152
4.4.2 Changing Healthcare Financial Structures...............155
4.4.3 Healthcare Delivery Failure: The Need for
Care Management..........................................................157
4.5 Healthcare Economics and Medicaid Managed
Care.....................................................................................162
4.5.1 Price-Based Business Environment..............................163
4.5.2 Political and Social Restraining Fo rces................... 165
4.5.3 Human Resource Restraining Forces..........................166
4.6 Model Subject Experts........................................................168
4.8 Next Chapter Preview........................................................ 170
Chapter 5
C o n ten t A nalysis R e s u l t s ............................................171
5.1 Introduction................................................................ 171
5.2 Driving and Restraining Forces Reviewed.........................173
5.2.1 Restraining Forces...................................................... 178
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5.2.2 Drivers as Driving Forces.............................................. 179
5.2.3 Incentives as Driving Fo rces........................................180
5.3 Analysis o ff Interview Notes..................................................182
5.3.1 Analysis of Care Management: Subject
Expert Interviews (CMSEs) ..........................................184
5.3.1.1 Drivers and Incentives Mentioned by CMSE.............. 186
5.3.1.2 Drivers and Incentives Not Mentioned by the
CMSEs.................................................................... 188
5.3.2 Analysis of Study Site Responses............................... 191
5.3.2.1 The Study Site Sample.............................................191
5.3.2.1.1 Hospitals and Health Systems................................. 193
5.3.2.1.2 Community Health Centers...................................... 196
5.3.2.1.3 Health Plans...............................................................198
5.3.2.2 Drivers and Incentives Mentioned Across
Groups....................................................................201
5.3.2.2.1 Drivers........................................................................201
5.3.2.2.2 Incentives....................................................................206
5.3.2.3 Differences Between Groups....................................210
5.3.2.3.1 Drivers Mentioned by Provider Type.......................212
5.3.2.3.2 Incentives Mentioned by Groups............................ 215
5.3.2.4 Drivers and Incentives Not Mentioned by
Study Sites.............................................................. 217
5.3.2.4.1 Drivers........................................................................217
5.3.2.4.2 Incentives................................................................... 220
5.3.2.5 Case Studies...........................................................222
5.3.2.5.1 Jackson Memorial Hospital......................................223
5.3.2.5.2 Parkland Health and Hospital System.....................223
5.3.2.5.3 Community Health Center Network.........................224
5.3.2.5.4 Project Dulce.............................................................225
5.3.2.5.5 Grace Hill Neighborhood Health Center................. 226
5.3.2.5.6 Boston Medical Center HealthNet Plan.................. 227
5.3.2.5.7 Contra Costa Health Plan........................................228
5.3.2.6 Drivers and Incentives Mentioned by Case
Studies....................................................................230
5.3.2.6.1 Drivers........................................................................230
5.3.2.6.2 Incentives................................................................... 232
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5.3.2.7 Results: Comparison Across Groups...................... 233
5.3.2.7.1 Drivers........................................................................233
5.3.2.7.2 Incentives....................................................................236
5.3.2.8 Other Considerations............................................. 238
5.3.2.9 Study Limitations................................................... 240
5.4 Next Chapter Preview..........................................................244
Chapter 6
B u sin ess Ca s e.................................................................... 245
6.1 Peeling the Onion.................................................................245
6.1.1 The Business Case for Pioneering Safety-Net
Providers....................................................................... 248
6.1.2 Force Field Analysis Review......................................... 248
6.1.3 Content Analysis Summary........................................... 250
6.2 Business Case Synthesis and Implications......................251
6.2.1 Driving Forces Related to Uninsured
Characteristics............................................................. 252
6.2.2 Driving Forces Related to Safety-Net
Provider Characteristics............................................ 253
6.2.3 Driving Forces Related to Safety-Net
Provider Funding........................................................... 256
6.2.4 Driving Forces Related to the Health
Industry.......................................................................... 259
6.3 Theorized Business Case...................................................262
6.4 Conclusion........................................................................... 268
Bib l io g r a p h y ...........................................................................272
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A p p e n d ic e s .......................................................................................295
Appendix A: Care Management Subject Experts.........................296
Appendix B : Telephone Survey Participants and Sites
Visited.......................................................................299
Appendix C: List of Expert Interviewees....................................... 303
Appendix D: Interview Guide for Care Management
Subject Expert Interviews........................................ 305
Appendix E: Program Screening Survey......................................309
Appendix F: Study Site Telephone Survey.................................. 312
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List of Tables
Page
Table 2-1 Care Management Interventions...................................................... 95
Table 3-1 Screening Tool—Care Management Components........................114
Table 3-2 Disease/ Program Focus................................................................120
Table 3-3 Definitions and Ratings...................................................................124
Table 4-1 Force Field Model: Uninsured Dom ain........................................140
Table 4-2 Differences in Safety-Net Provider Type........................................ 143
Table 4-3 Force Field Model: Safety-Net Provider Domain.........................150
Table 4-4 Force Field Model: Safety-Net Provider Domain—
Funding Sources...........................................................................154
Table 4-5 Force Field Model—Health Industry Domain.................................161
Table 4-6 Business Case for Care Management........................................... 167
Table 5-1 Force Field Model.......................................................................... 175
Table 5-2 Driving Forces that Push—Drivers................................................. 179
Table 5-3 Driving Forces that Pull—Incentives..............................................181
Table 5-4 Driving Forces Mentioned in CMSE Interviews............................. 187
Table 5-5 Driving Forces Not Mentioned by CMSE.......................................190
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Table 5-6 Health and Hospital System Sites.................................................. 194
Table 5-7 Community Health Centers............................................................ 196
Table 5-8 Health Plans...................................................................................199
Table 5-9 Frequency of Mention by Study Sites............................................203
Table 5-10 Drivers Mentioned in at Least 25 Percent of Study Sites.............. 213
Table 5-11 Incentives Mentioned in at Least 25 Percent of Study
Sites............................................................................................. 216
Table 5-12 Drivers Not Mentioned...................................................................218
Table 5-13 Incentives Not Mentioned..............................................................221
Table 5-14 Driving Forces Mentioned in at Least 25 Percent of Case
Studies......................................................................................... 231
Table 5-15 Group Comparison of Drivers Mentioned..................................... 235
Table 5-16 Group Comparison of Incentives Mentioned................................. 237
Table 6-1 Force Field Model Based on Content Analysis—
Uninsured Domain....................................................................... 252
Table 6-2 Force Field Model Based on Content Analysis: Safety-
Net Domain—Safety-Net Providers..............................................255
Table 6-3 Force Field Model Based on Content Analysis: Safety-
Net Domain— Safety-Net Funding...............................................257
Table 6-4 Force Field Model Based on Content Analysis: Health
Industry Domain........................................................................... 260
Table 6-5 Force Field Model: Theorized Business Case.............................. 267
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Abstract
Purpose: This research develops a business case for care management
(CM) for the uninsured. The business case analysis draws on the experience of
safety-net providers (SNPs) using CM for the uninsured in a managed care
environment.
Methodology: A force field analysis is used as a theoretical framework.
Thirty-six driving and 14 restraining forces are identified based on evidence in the
literature on the uninsured, SNPs, and the health industry. Collected in a
nationwide study of 22 SNPs, 8 hospitals, 6 health plans, and 7 health centers
using CM for the uninsured, a content analysis of interview notes is employed to
determine whether driving forces identified are mentioned as rationale for
implementing CM programs.
Findings: SNPs are using CM programs to provide more cost effective
care in response to business conditions evolving from managed care that affect
access to care for the uninsured. The business case rationale for pioneering
SNPs is based on a push-pull phenomena associated with safety-net missions,
uninsured care-seeking behavior, and protective strategies by non-SNPs arising
from managed care economics. Although 21 of 36 driving forces influence the
development of CM programs, mission-based driving forces lead to practices
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inconsistent with market business norms. Based on this analysis, a business case
consisting of 12 driving forces is put forward.
Conclusions/Recommendations: CM is a prudent business strategy for
providers concerned with costs, but there is no business case if the uninsured
represent uncompensated costs. Because an insurance-based healthcare system
creates members and nonmembers, the problem of access for the uninsured is
both a market problem and a public policy question. Maintaining access to
healthcare for nonmembers (the uninsured) requires more than good business
acumen. Safety-net missions to provide healthcare access for those who are
undesirable in the market are dependent on policy-based funding. Several
alternatives to insurance-based health coverage are proposed. Future research
on the potential of using agency theory for Medicaid managed care contracts and
safety-net health plans is recommended as well as examining the role CM can
play to improve cultural competency of healthcare organizations.
Dissertation Committee:
Ross Clayton, Ph.D., Committee Chair
Dean Emeritus and Professor Emeritus, Distinguished Professor in Public Administration
School of Policy, Planning, and Development, USC
Sacramento, California
Chester A. Newland, Ph.D.
Frances R. and John J. Duggan Distinguished Professor in Public Administration
School of Policy, Planning, and Development, USC
Sacramento, California
Molly Joel Coye, M.D., M.P.H.
President & CEO
The Health Technology Center
San Francisco, California
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Chapter 1
S tatem ent of th e P r o blem
1.1 Access to Healthcare for the Uninsured
Managed care has changed the financial underpinnings of the United
States’ healthcare delivery system; it has transformed the industry and changed
the playing field for safety-net providers, at a time there are record numbers of
uninsured. The healthcare marketplace is moving to a competitive price-based
system where public and private purchasers seek fixed-price, managed care
contracts for defined populations (Fishman 1997). As the financial structures of
the health industry change under managed care healthcare, dollars are linked to
insured individuals, making the uninsured more undesirable in the market place
(Cigich and Mischler 1996). Managed care contracting, with financial incentives
and utilization control measures, has made the privately insured market highly
price-sensitive (Mann et al. 1997). Some believe that over time provider
competition will also move purchasers and consumers to value-based selection of
providers (Cigich and Mischler 1996).
The financial pressures of managed care have also led to mergers and
conversions of not-for-profit and public hospitals, including the closing of 35 public
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hospitals nationwide and the redirection of funds intended for safety-net hospitals
which have a disproportionate number of low-income patients and high
uncompensated care (Weissman 1996). At the same time, safety-net providers
are challenged by a decline in charity care and traditional funding sources such as
Hill-Burton funds.
Are safety-net providers, known for their resourcefulness, learning new
ways to deal with old demands and new pressures arising from changing
healthcare financial structures? A recent project funded by the Robert Wood
Johnson Foundation (RWJ) confirmed that safety-net providers are using care
management strategies for the uninsured and that the strategies that are used by
safety-net providers are similar to those used by non-safety-net providers.1 This
study is referred to as RWJ study in this dissertation. The purpose of the RWJ
project was to leam whether safety-net providers are using care management for
the uninsured and to develop a tool kit to help facilitate replication of these
programs. However, the benefit of care management as a business strategy for
financially challenged safety-net providers is less clear. Why would financially
strapped safety-net providers employ care management for a population unable to
pay for these resources? What would cause cost-conscious organizations to incur
additional operating costs to care for the uninsured?
In this study a business case analysis is conducted using a Force Field
Analysis Model developed by Kurt Lewin (1969) of driving and restraining forces, a
1 The writer was the project manager for this study completed December 2000.
2
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Content Analysis of interview notes from the RWJ project to leam whether a
business case exists for care management for the uninsured and to identify other
forces or rationale that are given as explanations for implementing these
programs. Three sources are examined for driving and restraining forces:
• Findings of the RWJ project that confirmed safety-net providers are
using care management for the uninsured.
• Eight suppositions that provide context for the business case based on
the theory that changes in the healthcare industry brought about by
managed care are creating new pressures for safety-net providers and
that these pressures support the use of care management for the
uninsured.
• A literature review of the four domains affected by the theory posited.
The force field analysis is used as a theoretical framework to organize and
systematically analyze relevant organizational and environmental factors which
function as driving and retraining forces for care management as a strategy for
safety-net providers to continue to provide access to healthcare for the uninsured.
The driving forces identified are used in a Content Analysis to leam whether
safety-net providers using care management considered these forces in their
decisions to implement these programs. The force field analysis and the results of
the Content Analysis are synthesized to develop a theorized business case to
support care management for the uninsured.
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This chapter provides an overview of pressures safety-net providers face
due to changes in the health industry and describes what care management is, its
key program elements, and its potential for cost containment. With this as
background, the study premise that a business case analysis may be used to
better understand the business rationale and incentives for using these programs
with the uninsured is discussed. Using an iterative process to illuminate the
business conditions that support care management, a theoretical business case
framework is developed. The business case analysis is then used to examine
business strategies to sustain access to healthcare for the uninsured.
1.2 Increased Demand for Safety-Net Services
Safety-net providers, with limited flexibility in their market strategies, are
facing increased demands for care of uninsured patients and those with special
needs (Lipson 1997; Kinney et al. 1999). Decreasing enrollment in public
insurance programs and declines in employer-sponsored insurance has
contributed to a steady growth in the number of uninsured Americans over the past
decade (Holahan and Kim 2000). Because it is in their mission and in some cases
because they are obligated to do so, safety-net providers are providing care to a
growing number of uninsured. The care-seeking and demographic characteristics
of these populations indicate that they tend to be less healthy than the insured
population (Ayanian et al. 2000; Osteen et al. 1994; Weissman, Stem, and Epstein
1994).
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Today, as a group, safety-net providers have operating margins lower than
private-sector providers; and, as a matter of survival, safety-net providers focus
intensely on controlling costs (Fishman 1997). At the same time, declining federal
support and the movement toward Medicaid managed care and increased
competition jeopardize the viability of safety-net providers (Gold, Mittler, and Lyons
2000; Norton and Lipson 1998). As state Medicaid agencies adopt managed care,
these same forces are also transforming the publicly insured market and with it the
funding streams that support the safety-net.
The capacity of safety-net providers to meet growing demands to serve
low-income and uninsured populations is dependent on a patchwork of funding
streams and the availability of explicit subsidies for the uninsured that pre-date
managed care (Norton and Lipson 1998). Safety-net capacity is also influenced by
conditions in the local environment (Baxter and Mechanic 1997). Looking forward,
one can predict that the burden of the uninsured is expected to continue for safety-
net providers. This is a responsibility safety-net providers cannot easily avoid
because they are geographically located in large urban centers, in rural
communities, in medically underserved areas, and in impoverished and working
poor neighborhoods with higher numbers of uninsured.
Through a combination of their poorer health and growing numbers, the
uninsured are placing increased demands for care on safety-net providers
(Cunningham and Tu 1997; Mann et al. 1997; Needleman, Lamphere, and Chollet
1999). Meanwhile, as managed care is changing the health industry and eroding
the public financing vehicles through which subsidies for the uninsured are paid
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(Norton and Lipson 1998). Healthcare industry changes most affecting safety-net
providers are (a) an erosion of targeted subsidies for safety-net providers secured
because of the concentration of care for the uninsured, Medicaid, and special
needs populations; (b) a competitive market environment in which public systems
are now required to operate; (c) a price-based system where the cost of operating
from academic medical centers and providing high levels of uncompensated care
render safety-net providers noncompetitive; and (d) increased private-sector
provider interest in Medicaid markets as Medicaid managed care penetration
increases (Committee on the Changing Market 2000).
An awareness of these trends might lead a provider to ask the following
questions: How can I control the cost of treating the uninsured population,
particularly the chronically ill, who are the most expensive population to treat?
How can I maintain and improve the quality of care that I provide to improve my
reputation in the marketplace and, thus, capture or retain critical market share?
One answer to these questions might be the use of care management programs
and activities developed as part of quality improvement processes aimed at
reducing costs and improving care.
The health services research and hospital literature has shown that quality
improvement processes in many cases are cost-effective and produce high-
quality, well-coordinated care, particularly for chronic conditions (Kelly et al. 2000;
Mazur et al. 1996). Cost savings are typically the result of decreased hospital and
emergency department use, and cost avoidance often results from coordinating
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care or rationalizing the process of care (Liijas and Lahdensuo 1977; Taitel et al.
1995).
1.3 Care Management
What is care management? Care management is used to describe a
variety of activities that have the potential to reduce disparities in access and to
improve health status. These activities include evidence-based medicine for
health and disease management (such as clinical guidelines, clinical pathways, or
clinical protocols), utilization and case management, and other programs designed
to standardize or rationalize the processes of care or to coordinate care.
Evidence-based medicine or practice is a bridge between clinical research and
clinical practice that brings the best applicable evidence from scientific research to
the provision of patient care. In this study, care management is defined as an
approach to care that seeks to develop a partnership between the physician and
the patient.2 Care management interventions employ evidence-based practices
and other population-based strategies to assure that patients receive services
appropriate to their needs, integrated across service settings and over time, and
with the goals of improving health outcomes and reducing unnecessary utilization
(NCCC 1995; Wagner et al. 1999).
2
(NCCC 1995). National Chronic Care Consortium defines care management as ’system wide
efforts within a healthcare organization to assure that clients receive services that are
appropriate to their needs, integrated across service settings and over time, and that support
client and system wide goals’ for care provided to populations with chronic diseases. Issue
Brief The Elements of Integrated Care Management (p. 2).
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Care management programs can vary in foci, size, and scope, tending to
reflect the organizational structures and delivery capacities that exist in the
implementation environment as well as the population served (NAPHHS 1999b).
These programs can be developed around the needs of populations with chronic
or acute diseases or conditions such as diabetes, HIV, hypertension, and asthma
as well as include clinical and administrative policies, procedures, and programs
that help practitioners manage the care of their patients more effectively (Osmick
and Vamer 1999).
Care management can be used in direct care settings to better organize
processes of care and reduce resource use as well as to manage the care of
populations with behavioral and social risk factors that contribute to high cost or
poor health outcomes. Disease management programs, which provide disease-
based care management, use evidence-based clinical guidelines to design
systems of care for patients with common conditions. Prenatal programs for
adolescent mothers-to-be that are organized around mentoring models are an
example of care management based on social and behavioral risk factors. A third
group of care management programs consists of Medicaid managed care health
plans or quasi-health plans that use care management strategies to operate within
global budgets for the uninsured. Health plans are also referred to as managed
care organizations (MCOs); the terms are used interchangeably in this report.
Global budgets represent fixed dollar amounts for a defined set of services or
population. Care management programs for health plans use clinical and
administrative strategies to attend to clinical, social, behavioral, and economic risk
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factors for enrolled populations to achieve better health outcomes and to engage
patients in assuming responsibility for their healthcare.
Key elements of care management programs might include
1. Clinical protocols or pathways and patient registries to
systematically standardize care and to identify opportunities for
prevention or early intervention. These elements serve as tools to
prompt practitioners to proactively anticipate care needs.
2. Patient education, self-management training through individualized
instruction, free classes “prescribed” by a physician taught by
healthcare professional, para-professionals, or through written
materials and support services to manage the social, emotional,
behavioral, and health needs of patients.
3. Outreach to assess patients for social or clinical risk, to identify
opportunities for prevention or early intervention, and to provide
population-based care. Risk assessments can be conducted
through telephone or home visits. Case management or mentoring
programs can be used to offer support and guidance in self-care
and in assuring timely and appropriate access to care.
4. Population-based health education and prevention programs to
identify health risks early, modify, or change unhealthy behaviors
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and practices, and tertiary prevention programs to identify training
and care needs and to address barriers to self-management.
5. Administrative tools, such as tailored statistical reports of patient
care activity or claims data that provide practitioners information
about utilization patterns or patient outcomes.
1.4 Cost Containment
Cost containment measures are endemic in healthcare. As a result, clinical
pathways, disease management, and other forms of care management are
developed and used broadly by healthcare providers to reduce costs and retain or
improve quality. Some interventions, such as disease management, are
commonly used for insured patients with chronic care needs, so much so that an
entire cottage industry has formed in pursuit of this business. Advocates of
disease management report “absolutely dramatic” results in reducing Emergency
Department visits and other medical expenses by 40 to 50 percent (Carroll 2000,
2). Skeptics argue that advocates cannot prove that these strategies result in
savings (Carroll 2000). Others say that these programs show benefits in some
areas, but that they add administrative costs (Rosenstein 1999). Others still
maintain that care management strategies such as case management are
avoidable costs, which are added to the system, because of fragmentation and the
non-system of healthcare that exists in this country (Issel and Anderson 1999) or
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result in savings are offset by additional program cost (Schore, Brown and Cheh
1999).
1.5 Study Purposes and Premise
The purpose of this study is to understand why safety-net providers use
care management for the uninsured (i.e., to leam the business rationale and
incentives for using these programs with the uninsured). In other words, what is
the business case for care management and for safety-net providers serving the
uninsured specifically? Using a force field analysis as a theoretical framework the
goal of the study is to develop a business case for care management as a prudent
business strategy to sustain access to quality healthcare for the uninsured. The
theorized business case will identify forces influencing safety-net provider program
decisions and funding priorities that support care management for the uninsured.
The business case framework can then be used for disciplined examination of the
conditions required to maintain health access for the uninsured and to offer
observations to help guide policymakers and planners.
The business case analysis begins with the premise that safety-net
providers with fixed budgets migrate to care management to care for the uninsured
because of changes in financial structures of the health industry. The underlying
assumption is that safety-net providers are responding to health industry changes
and business conditions evolving from managed care that are restricting access to
care for the uninsured. This conceptualization links care management programs
to safety-net provider responses to health industry changes prompted by managed
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care, and it forms the logic for eight suppositions delineating the conditions for a
theorized business case.
1.5.1 What Is a Business Case Analysis ?
In a review of principal strategies used to advance the quality of clinical
care in the United States healthcare system, Coye (2000) concluded a “business
case for quality” in healthcare did not exist (Coye 2000, 2). Implementation of
quality initiatives did not help health organizations demonstrate a competitive
advantage, nor is there evidence that the American public is demanding a new
threshold of performance. Absent consumer demand, there were no incentives for
purchasers to demand quality as a threshold for market entry or to pay higher
premiums. Given the lack of rewards, physicians lacked incentives to accept
performance standards, such as moving from community standards to clinical
guidelines and structured reporting, which in turn would lead to the development of
comparable measures to help the buying public identify high performing providers.
Coye posited that a business case for quality would mean that healthcare
organizations could expect to gain a higher price. Purchasers would pay higher
premiums, and insurers and HMOs would pay higher fees or capitation rates to
providers. Purchasers and consumers, in response to evidence of better quality,
would reward providers and insurers with increased volume (market share).
Health systems overall would see decreased costs, as quality management
narrowed variation, and improved predictability in the effective use of resources
(Coye 2000, 2).
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Another example of a business case analysis is a study, which explored
how market forces might affect the profitability of orthodontic practices. The
analysis looked at the intensity of rivalry, the threat of new entrants, and the
bargaining power of buyers and suppliers. Using a mail survey, the study
concluded that new entrants are a threat to existing practices, in that they facilitate
discretionary spending by the consumer. The authors concluded that practitioners'
personality traits rather than business principles contributed to the success of
these practices. The authors also found that orthodontic practices have not been
successful in cost containment; managed care contracts have neither increased
patient load nor profit (Hughes et al. 1996).
1.5.2 Basis for a Business Case Theory
A business case analysis is based on high-level abstractions typical of
strategic planning or budget forecasting. Outlining the context for the business
case and the proposition that a desired outcome is at least theoretically possible is
usually the crucial first step. The theory that safety-net providers experience
pressures that support the business case for care management is based on eight
suppositions related to changes in the health industry brought about by managed
care:
1. Safety-net providers provide care to large numbers of uninsured; as the
number of uninsured grows, there is a corresponding increase in the
demand for safety-net services.
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2. Safety-net funding encompasses responsibility to care for the uninsured
and a structural dependence on Medicaid funding mechanisms,
primarily disproportionate share payments, and cost-based
reimbursement.
3. Safety-net providers experience pressures to control costs because
their funding sources serve as fixed budgets; for this reason managing
the cost of care of the uninsured is important to their survival.
4. Safety-net funding to pay for the care of the uninsured is linked to
Medicaid patient volumes; as a result changes in Medicaid market
share impact the ecosystem of funding for the uninsured.
5. Managed care economics attract non-safety-net providers to the
Medicaid market, increasing beneficiary choice among providers and
introducing market dynamics and introducing increased competition to
safety-net provider economic models.
6. Safety-net providers are contracting with managed care organizations
to retain Medicaid market share and are exposed to cost control
incentives and requirements for population-based health maintenance
and preventive care.
7. Managed care organizations use care management programs to
standardize care and decrease unnecessary hospitalization and
emergency care.
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8. Safety-net providers using care management for Medicaid patients also
use these programs to care for the uninsured and contain costs
because of incentives arising from new evolving business structures.
Developed from this researchers practical experience and the findings from
the RWJ study, these suppositions provide the context for the business case
analysis and delineate the sources of influences that function as drivers or
incentives for safety-net providers. The sources of influence or domains are
examined to leam how safety-net providers, operating with limited funding, are
responding to health industry changes and how business conditions evolving from
managed care are affecting access to care for the uninsured.
1.5.3 Force Field Analysis Model as an Analytical Tool
A business case analysis can be a daunting task, given that healthcare
organizations are complex businesses; and safety-net healthcare organizations,
with their melange of funding, represent another layer of complexity. Adding to
that complexity are industry changes taking place as a result of managed care,
and, their impact on safety-net providers as well as the impact Medicaid managed
care is having on subsidies for the uninsured. The result is that the task of a
business case analysis is increasingly overwhelming. For this reason a model is
needed to identify drivers and incentives for safety-net providers. Lewin (1969)
posited that there are both restraining and driving forces arrayed against each
other within a force field creating an "organizational equilibrium” (Fuqua and
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Kurpius 1993,12). The term force serves as a metaphor for a broad range of
influences affecting the system. The concepts of equilibrium and disequilibrium in
a social system permit the consideration of organizational and environmental
influences as driving or restraining forces. The "driving forces" represent the
factors that support the targeted change (Fuqua and Kurpius 1993,12). The
"restraining forces" are barriers to the change, factors that tend to keep the
organization in a static condition (Fuqua and Kurpius 1993,12). Restraining forces
work against change, and driving forces push or move toward change.
In a competitive, price-based healthcare system, where healthcare dollars
are linked to insured individuals, providing care to uninsured individuals is a
restraining force for both safety-net and non-safety-net providers. The Force Field
Analysis Model provides a way to understand the various push-pull, driving-
restraining forces to analyze why financially strapped safety-net providers would
use care management strategies to care for the uninsured. This model draws from
the healthcare literature to simplify the reality within which safety-net providers
work. Safety-net providers environments are examined to understand the context
for the business case and to identify sources or domains which contribute
pressures that propel, dictate, motivate, or otherwise influence safety-net provider
program decisions and funding priorities. The domains are (a) characteristics of
the uninsured population; (b) characteristics intrinsic to safety-net providers—their
missions, their accessibility to the uninsured, and the requisites of the funding
base they depend on to exist; c) market dynamics in the healthcare industry, those
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related to managed care in general and Medicaid managed care in particular; and
d) care management and program characteristics.
1.6 Evidence-Based Analysis
For research, a model consisting of statements, such as driving and
restraining forces, can be used to link certain elements to one another (O'Sullivan
and Rassel 1989). In this way, the milieu of factors and conditions in the safety-
net provider experience that exert influence on whether or not care management
programs should be implemented can be conceived in the context of a force field
to facilitate conclusions about the importance of different elements and their
relationships to one another. The following questions are examined to arrive at
driving forces that contribute to the use of care management for the uninsured:
What are the characteristics of the uninsured that contribute to the business case
for care management? What is known about their care-seeking behavior and
health status? Do they seek care from safety-net providers? If so, why? Who are
safety-net providers and what are their characteristics? What are the financial
rewards and pressures they experience? How are they different from other
healthcare providers? What is the basis of their relationship to the uninsured? Is
the basis economic, legislatively mandated, and/or moral? How are they funded,
and what is the economic model from which they operate? Does the business
model for safety-net providers support care for the uninsured? Do the funding
streams for safety-net providers position them to care for the uninsured, unlike
other U.S. healthcare providers? How are changes in healthcare financing
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affecting the business environment for safety-net providers? How are safety-net
providers responding to changes in health-system financing? What is care
management as an intervention—how and why is it being used? What is the
potential benefit of this approach for safety-net providers for the uninsured?
By answering these questions using a force field model, the business case
analysis examines driving forces that collectively, or in part, contribute to a
business case that supports care management for the uninsured, even though
these strategies require additional expenditures. Furthermore, whether or not new
evolving business structures for safety-net providers support the application of
these strategies to care for the uninsured, mitigating the restraining force of costs,
can be examined. In this way this research illuminates the business environment
for safety-net providers and helps to explain how care management may serve
their interests as well as maintain access to healthcare for the uninsured.
1.7 Next Chapter Preview
The next chapter reviews the medical, health professions, health services
research and hospital literature to begin the process of answering these questions
and to identify driving and restraining forces that may explain why safety-net
providers use care management for the uninsured.
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Chapter 2
Literature R e v ie w
2.1 Domains of Focus
An understanding of the milieu of internal and external drivers, incentives,
and rewards (driving forces) encountered by safety-net providers with regard to the
uninsured is needed to analyze the business case for care management of the
uninsured.
What follows is a review of the healthcare literature that covers four topics:
(a) the uninsured population, their care-seeking behaviors, and their access to
healthcare; (b) the nature and character of safety-net providers, their funding
streams, and the business considerations associated with the environment in
which they operate; (c) how safety-net providers are being affected by changes in
healthcare financing as well as increased managed care and competition, and how
these trends influence funding for and care of the uninsured; and (d) the evolution
of care management and the benefits and the incentives related to the application
of care management interventions both broadly and specifically for the uninsured.
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2.2 The Uninsured
More than 44 million people are uninsured in the United States; 18 percent
of the total non-elderly population is uninsured. An additional 29 million Americans
are underinsured, meaning that, although they may be covered by health
insurance, they are likely to face bankruptcy as a result of a major illness
(Kirschenbaum and Woolhandler 2000). Moreover, the number of uninsured has
increased by 1 1 million in the last ten years (Committee on the Changing Market
2000). With such a large and growing number of uninsured people living in the
United States, it is important to understand characteristics of the uninsured
population to understand the health access options they may have. What is
known about their care-seeking behavior and the health status? How do the
uninsured get care and where? This section reviews the healthcare literature on
the uninsured to provide answers to these questions and others as well as to
provide a basis for understanding the role the safety-net has in meeting their
health needs and how changing financial structures may be affecting their access
to care.
2.2.1 The Uninsured and Their Care-Seeking Behaviors
The uninsured are mostly adults, with an overrepresentation of Latinos and
blacks; they include workers and their dependents in all income brackets. Over
half (52 percent) of the uninsured are white (Shirk, Trost and Schultz 2000).
Because the Medicare program covers most adults over the age of 65, the
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uninsured are predominately young adults (particularly men); people living in
families that earn less than 200 percent of the federal poverty level (FPL) or
$26,580 for a family of three; racial and ethnic minorities, particularly Latinos
(Holahan and Brennan 2000); and employees of small firms (The Kaiser
Commission 2001). Latino is used in this research to refer to populations with
Latino heritage; Mexican, Cuban, Puerto Rican, Dominican, and Central American,
Columbian, Panamanian, and other groups that the Office of Management and
Budget classifies as Hispanics.
The uninsured tend to be Latino and poor. The poor are those with
incomes below 200 percent FPL, also referred to as the near poor, and they
include the very poor, those with incomes below 100 percent FPL. Studies on low-
income adults can include both the near poor and very poor, as measured against
different FPL income levels. Some studies use $16,660 for a family of four at 200
percent FPL (Holahan and Kim 2000, 196) others use $26,580 for a family of
three. Low-income adults account for 58 percent (Zuckerman, Haley, and Holahan
2000) to 75 percent (NAPHHS 1999a, 1) of the uninsured. One study showed that
more than 44 percent of the working uninsured had incomes above 200 percent
FPL (Shirk, Trost, and Schultz 2000). Of the low-income uninsured, Latinos have
the highest number of uninsured (53 percent) (Holahan and Brennan 2000). Half
of Latino families with incomes below FPL are uninsured, and one-fourth of the
uninsured are Latino, almost double the number from 1987 (Quinn 2000).
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2. 2.1.1 Working Uninsured and Immigrants
Because the U.S. health system is based on employer-sponsored health
coverage, people who are employed by organizations that do not offer health
benefits tend to remain uninsured. Purchasing pools, once thought to be an
approach to encourage employer-sponsored health benefits, do not appear to
result in cost savings because managed care competition tends to drive costs
down (Long and Marquis 1999). Efforts to broaden the base of employer-
sponsored healthcare coverage have not been effective, and the number of the
uninsured has not declined which was the initial hope behind purchasing pools.
Most uninsured (83 percent) are in working families with one or two full
time workers (Holahan and Brennan 2000). However, more than 80 percent of the
increase in uninsured over the past five years has been among those with incomes
above 200 percent FPL even as employer-sponsored health insurance coverage
has increased overall (Holahan and Kim 2000). Although employer-sponsored
insurance has increased for low-income adults, the gains in coverage are
concentrated among white workers (Zuckerman, Haley, and Holahan 2000).
When offered, Latinos enroll in employer plans at the same rate as other workers.
However, they have less opportunity than other workers to obtain health insurance
from employers (Quinn 2000). Latino workers are concentrated in industries that
tend not to offer health coverage and even when working for employers that offer
health insurance tend not to be offered health insurance (Quinn 2000).
A growing gap in care exists between those with and without health
insurance (Nelson et al. 1999) because welfare reform adversely affected health
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coverage for the low-income uninsured—as evidenced by a drop of 3.3 million in
Medicaid enrollments between 1994 and 1998. This drop was not made up for by
recent increases in employer-sponsored health coverage (Holahan and Kim 2000;
Sandman 1998; Shirk, Trost and Schultz 2000). Latinos and blacks as groups
were most affected by the drop in Medicaid enrollments due to welfare reform
(Holahan and Kim 2000). Employer coverage decreased 41 percent in ten years,
from1988 to 1998. The decline has been concentrated among low-income adults
and among young workers with less need for health services (Smith, Heffler, and
Freeland 1999).
The erosion in coverage has been exacerbated by the rapid growth of jobs
with no benefits, up 29 percent in 1997, primarily for part time workers and
contract or temporary workers (Meyer and Silow-Carroll 2000) as well as by a
shifting of health costs from employers to workers. Workers with less income are
less able to absorb these healthcare costs. The decline in health coverage would
have been greater overall if Congress had not passed the Children's Health
Insurance Program (CHIP) in 1997 (Shirk, Trost, and Schultz 2000). Nearly 2
million previously uninsured children are now covered by CHIP.
2.2.1.2 Health Disparities Among Minority and Immigrant Populations
The uninsured are highly represented by immigrants and foreign-born
citizens (Camarota and Edwards 2000). Among the uninsured some populations
are burdened by social and political factors that influence access to healthcare.
For example, Latinos are less likely than non-Latinos to receive pain medication in
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at least one Emergency Room in Los Angeles (Todd, Samaroo, and Hoffman
1993; Todd, Lee, and Hoffman 1993), and Non-Latinos are more likely than
minorities with the same diagnosis to undergo invasive cardiac procedures, even
after adjustment for insurance and income (Cariise, Leake, and Shapiro 1993).
Immigrants and undocumented residents have additional barriers to health
coverage. Distrust of government-financed insurance programs is frequently the
reason for families of workers being uninsured (Shirk, Trost, and Schultz 2000).
This is particularly true for undocumented residents. In one study of women, 75
percent of undocumented Salvadoreans and 54 percent of undocumented
Mexicans said fear of deportation was the reason they failed to seek healthcare
(Hogeland and Rosen 1990). Some immigrants believe that use of free medical
services or Medicaid would render them “public charges," thereby jeopardizing
their opportunity of becoming citizens and of sponsoring relatives for future
immigration (Kramer, Ivey, and Ying 1999).
Language, or the inability to speak English also has an impact on the
health status of non-English speaking Americans. Studies show how non-English
speaking consumers are being affected by a health system that cannot
accommodate their language needs. Non-English-speaking patients have fewer
primary care visits and receive fewer preventive services; patients of Mexican
descent have a lower rate of mammograms, pap smears, and other preventive
measures (Marks et al. 1987); and Mexican children and adolescents with non-
English speaking parents have less access to care because their parents take
them to the doctor less, regardless of insurance status (Wood et al. 1990).
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2.2.1.3 Delayed or Postponed Care
The uninsured usually lack a regular source of medical care and tend to
postpone or forego care. Irrespective of clinical and socioeconomic
characteristics, the lack of a regular physician, more than insurance status,
determines access to care or delay in seeking care (Sox et al. 1998). Thirty-six
percent of uninsured adults have no medical home (compared to 9 percent of the
adult insured population), and 54 percent have not visited a doctor or a health
clinic for an illness in the past year, compared to 39 percent of the adult insured
population (American College of Physicians 2000). In a Kaiser Family Foundation
survey conducted in early 2000, one-third of the uninsured adults interviewed said
that they had postponed getting needed care in the past year, and the majority
said that they were postponing care for what they believed to be a serious
condition. Although only three percent of adults with health coverage did not get
needed medical care for a serious condition, 20 percent of uninsured adults
reported that they failed to get medical care for a serious condition in the past year
(The Kaiser Commission 2001).
Care-seeking behavior is influenced by the lack of health insurance. In a
cross-sectional study, using the 1989 National Health Interview Survey, of the
National Center for Health Statistics, Hafner-Eaton (1993) found large disparities in
physician visits between the uninsured and insured, particularly for the well and
chronically ill uninsured. As would be expected, uninsured without health
problems saw a physician 40 percent less often than those with insurance, while
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uninsured with chronic illnesses sought physician care twenty percent less often
than those with insurance. Acutely ill uninsured were more likely than other
uninsured to see a physician; the rate was ten percent less often than those with
insurance (Hafner-Eaton 1993).
Care-seeking behavior is also influenced by the financial problems caused
by not having health insurance. Cost is the reason most often given by families as
an explanation of their uninsurance (Shirk, Trost, and Schultz 2000). Uninsured
adults were more likely than insured adults to report that they could not see a
physician when needed due to cost; this includes those in poor health or fair health
(Ayanian et al. 2000). Some uninsured delay getting care to avoid high medical
bills or lost pay, or they fail to follow prescription drug treatments because of the
cost (Kinney et al. 1999; Shirk, Trost, and Schultz 2000). Many uninsured are
unable to pay medical bills or must deal with collection agencies for unpaid
medical bills (Quinn 2000). Unfortunately, delays in care predispose the uninsured
to preventable health outcomes and higher mortality. High costs are also the
reason even those with health insurance are unable to obtain needed care
(Himmelstein and Woolhandler 1995). The uninsured are also more likely to
initiate care with late stage disease (Osteen et al. 1994) and the lack of health
insurance is associated with an increased risk of mortality (Frank, Clancy, and
Gold 1993). In some cases, such as uninsured women with breast cancer, studies
have shown they have higher death rates than women who are insured (Ayanian
et al. 1993; The Kaiser Commission 2001).
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2.2.1.4 Health Status
Overall, compared to higher income adults, low-income uninsured adults
are worse off in terms of access and health status, factors that can impact their
ability to work and thus their income-earning capacity. The uninsured are less
likely to receive preventive care (Holahan and Brennan 2000; Sandman 1998;
Zuckerman et al. 1999) and more likely to be hospitalized with more serious
illnesses and for avoidable conditions (The Kaiser Commission 2001). Low-
income patients also have higher readmission rates and with longer time periods
(Weissman, Stem, and Epstein 1994). Uninsured women were less likely to have
received a Papanicolaou test or mammogram than insured women (Fretts et al.
2000). In one study, 30 percent of uninsured low-income adults reported a health
condition that limited their ability to work (Holahan and Brennan 2000). More
recently, in a study conducted by the American Society of Internal Medicine,
Harvard researchers found 70 percent of the long-term uninsured with health
concerns did not receive needed care and 26 percent with high blood pressure or
diabetes had not seen a doctor in two years (Ayanian et al. 2000).
2.2.2 The Nature of Chronic Illness and the Uninsured
Changing American demographics and lifestyles, and advances in
medicine are altering the nature of chronic illness in the United States. Americans
are living longer on average, even after diagnoses of chronic illness (RWJ 1996).
The proportion of deaths caused by heart disease and diabetes dropped from 40
percent in 1980 to 33 percent in 1998 (The Kaiser Commission 2001). Yet, the
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prevalence of these and many other chronic diseases remains alarmingly high.
Furthermore, despite the fact that the chronically ill population is often thought of
as primarily elderly; in reality, the elderly represent less than one-third of people
with chronic conditions that cause limitations and disabilities (RWJ 1996).
Increased longevity and high rates of chronic disease have had a number of
important health consequences, including an increased population with disability.
Stress on the healthcare system has resulted.
Chronic illness is a particularly grave problem for people lacking insurance.
Some of the characteristics of the population experiencing disabilities are
revealingly similar to the characteristics of the uninsured population. The
likelihood of experiencing disability from a chronic condition (measured by difficulty
with Instrumental Activities of Daily Living) is almost two times higher for people
earning incomes below 200 percent of the FPL than for people earning incomes
above that level. Lower education levels also correlate with increased disability
(Benjamin et al. 2000). In addition, insurance underwriting rules related to
exclusions for preexisting conditions also affect the availability of adequate health
coverage for people with chronic illness (Stroupe, Kinney and Kniesner 2000).
Absent a medical home, the uninsured are using self-help strategies, learning
about home remedies "through the grapevine," self-medicating for severe illness
by using over-the-counter prescriptions and crossing the U.S.-Mexico border to
purchase prescriptions without physicians' orders (Vuckovic 2000, 8). In addition,
language barriers may hinder access to care for minority populations (Gaskin and
Hadley 1999).
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2.2.2.1 Access to Healthcare
Although all providers in the healthcare system provide some care to the
uninsured, safety-net providers shoulder more of the burden. Many hospitals,
physicians, and community clinics provide free care to patients without the ability
to pay. Some argue that charity care provided by physicians is limited with the
financial pressures from managed care (Cunningham et al. 1999b). The Center
for Studying Health Systems Change, in their tracking communities initiative to
learn how communities are adjusting to changes in the health industry, found that
higher managed care penetration is associated with both less charity care by
physicians and less access to care for the uninsured (Cunningham and Ginsburg
2001). Reduced charity care and access to physicians among uninsured persons
may result in an even higher burden of uncompensated care for traditional safety-
net providers, such as public hospitals and community health centers.
Another measure of care provided to uninsured patients and those unable
to pay for care is uncompensated inpatient hospital care. Only hospitals provide
data on unpaid care (Fishman 1997; Mann et al. 1997). Charity care, or
uncompensated care, is the cost of unpaid care minus a hospital's overall cost-to-
charges ratio, or the profit margin built into patient fees, and bad debt expense.
Charity care reflects care provided to patients unable to pay for care, while bad
debt is care provided to patients unwilling or unable to pay for care. Bad debt may
also be an indication of underinsurance (Biles and Abrams 1998; Committee on
the Changing Market 2000).
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Uncompensated care is concentrated within urban public hospitals and
major academic health centers (Mann et al. 1997; Needleman, Lamphere, and
Chollet 1999). In one study fewer than nine percent of the hospitals provided more
than 38 percent of all uncompensated care (Cunningham and Tu 1997). Hospitals
are able to provide uncompensated care because they either charge paying
patients more than the cost of the care they receive, referred to as cost shifting,
through lower profit margins (Atkinson, Helms, and Needleman 1997), or through
subsidies (Fishman 1997; Fishman and Bentley 1997). For this reason,
uncompensated care may also be considered an indicator of the willingness and
ability of healthcare providers to make such care available (Atkinson, Helms, and
Needleman 1997).
Seeking care from safety-net providers is an acceptable alternative
because these providers are programmatically constituted and ideologically
committed to serving the uninsured (Kinney et al. 1999). However, the safety-net
is neither comprehensive nor integrated (Baxter and Mechanic 1997) and varies
across the country based on economic, political, and local structural factors.
2.2.2.2 Reduced Uncompensated Care
As a measure of access, rates of uncompensated care reflect decreased
access for the uninsured. Uncompensated care provided by hospitals since 1988
has not matched the growth in uninsured, nor have uncompensated care
expenditures increased to reflect growth in hospital expenses (Mann et al. 1997).
During that same time, uncompensated care has become more concentrated in
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public hospitals (Biles and Abrams 1998), and subsidies to pay for uncompensated
care have decreased (Cunningham and Tu 1997). Of the $16.8 billion in
uncompensated care provided by hospitals in 1994, only 19 percent was offset by
government subsidies (Fishman and Bentley 1997). The proportion of
uncompensated care provided by hospitals may also be a measure of safety-net
hospital vulnerability (Norton and Lipson 1998).
Although hospitals have reduced the amount of uncompensated care they
provide, some argue that the evidence does not indicate a large-scale reduction of
uncompensated care (Mann et al. 1997) or changes in access to care for the
uninsured. One reason that access has not declined may be that the changes that
have reduced capacity in the safety-net have been gradual, allowing safety-net
providers as a group to adapt to market and policy changes and allowing
government subsidies to be targeted to vulnerable safety-net providers (Norton
and Lipson 1998). Others disagree, saying there is a strong and consistent trend
of declining access to care for the uninsured (Atkinson, Helms, and Needleman
1997). Further, some argue that in order to reduce healthcare spending, managed
care organizations may have to focus on finding cost savings by decreasing
dissemination of newer, more costly medical technology (Smith, Heftier, and
Freeland 1999).
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2.2.3 Business-Practice Considerations
2.2.3.1 The Uninsured
Most uninsured are black or Latino and in working families with one or two
full-time workers. Adverse affects from welfare reform have increased the number
of low-income uninsured (Holahan and Kim 2000). Growth among uninsured with
incomes above 200 percent FPL has been the result of a changing job market and
a rapid rise of jobs without health benefits (Meyer and Silow-Carroll 2000). Safety-
net providers, with a range of non-medical services, are able to deal with the social
and economic conditions of diverse, low-income populations. With an increase in
the number of uninsured with incomes above 200 percent, FPL safety-net
providers may experience both new consumers and new consumer expectations.
2.2.3.2 Advanced and Preventable Conditions
The low-income uninsured face harsh realities when they require
healthcare; they risk their health and well being by postponing or delaying care or
cutting comers with home remedies or reduced treatments or medications. For
this reason, they tend not to have a medical home and seek care through
Emergency Departments often presenting themselves with preventable health
conditions. These individuals also face financial hardships when unable to pay for
care or when failure to seek care affects their ability to work. Seeking care for
advanced disease or untreated health conditions places urgency on them as well
as on the providers from whom they seek care—often safety-net providers.
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Charity care by physicians, hospitals, and community clinics is not a
substitute for health insurance in terms of access. Disparities in access, as
measured by uncompensated care for low-income persons, are greater overall in
areas with high Medicaid managed care penetration and high numbers of
uninsured (Cunningham 1999). As competition intensifies with managed care
contracting, federal, state, and local policies will be important to maintaining
access to healthcare for the uninsured, particularly if this group continues to grow
(Norton and Lipson 1998).
2.3 Safety-Net Providers
The Institute of Medicine Committee (IOM) on the Changing Market,
Managed Care, and the Future Viability of Safety-Net Providers, was
commissioned in 1999 to study the affect of current healthcare trends on the
viability of the safety-net. The committee defined the safety-net as “those
providers that organize and deliver a significant level of healthcare and other
related services to uninsured, Medicaid, and other vulnerable populations”
(Committee on the Changing Market 2000, 3). The most essential of these
providers, according to the committee, have two key characteristics: (a) they
maintain an “open door” policy, either by legal mandate or stated mission, and
offer access to services for patients regardless of their ability to pay, and (b) a
significant portion of their patients are uninsured, enrolled in Medicaid, or in some
other way vulnerable and lacking appropriate access to healthcare (Committee on
the Changing Market 2000,21).
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This section examines core safety-net providers that make up the system
of care for the uninsured to help understand the business considerations of
operating within the broader healthcare environment by providing care to the
uninsured and offering care management programs for this population. The
following questions will be explored below. What are the characteristics of safety-
net providers? What are the financial rewards and pressures they experience?
How are they different from other healthcare providers? What is the root of their
relationship to the uninsured? Is the source of the link to the uninsured economic
or moral, or is it a legislative mandate? How are safety-net providers funded, and
what are the financial underpinnings of the safety-net? Does the funding support
care for the uninsured? If not, how do safety-net providers sustain the cost of care
for the uninsured? Do funding streams create imperatives for safety providers to
care for the uninsured in ways that set them apart from other U.S. healthcare
providers?
2.3.1 The Characteristics of the Safety-Net
The IOM definition is useful in that it provides criteria by which to identify safety-net
providers. In reality, the safety-net is comprised of a broad array of providers,
services, and clientele. In addition, the core safety-net, the handful of providers
within communities, plays a dominant role in providing care to vulnerable
populations. These providers tend to reflect local environments (Baxter and
Mechanic 1997). For this study, core safety-net providers include 635 federal,
state, and locally funded community and migrant health centers with 1,647 sites;
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more than 3,000 rural health clinics; nearly 3,000 city and county health
departments (Coughlin et al. 1999); and a diverse group of hospitals, many of
which are public hospital systems with major academic medical programs.
Contracts with MCOs are essential for safety-net providers to participate in
Medicaid managed care and provide an opportunity to develop mutually agreed
upon roles and responsibilities to ensure care for vulnerable populations, thereby
expanding safety-net missions to health plans (Lipson 1997, 106). In this way,
health plans that contract primarily with safety-net providers also become part of
the safety net. Smaller special service providers such as those that run family
planning clinics, school-based programs, and AIDS services are also considered
safety-net in some communities. In addition, private physicians collectively
provide charity care and augment the ability of the safety-net to care for the
uninsured (Cunningham 1999; Mann et al. 1997). However, because of the focus
of this research, special service providers and private physicians are not
examined.
Safety-net providers serve large numbers of low-income, less educated
and uninsured patients as well as a broad array of vulnerable populations.
Vulnerable populations include the frail elderly, immigrants and those who are non-
English speaking, children with special needs and pregnant women with medical
complications, hard-to-treat patients such as those with AIDS, the homeless, the
mentally ill, and substance abusers. As a result, these organizations also provide
a variety of population-focused programs such as maternal and child health clinics,
specialty clinics for physically disabled children, school-based clinics, family
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planning clinics and special services to AIDS patients (Coughlin et al. 1999). The
safety-net also serves a higher proportion of racial and ethnic minorities (Gaskin
and Hadley 1999, 351). As a result, safety-net providers must develop the
capacity to deal with the social and economic conditions as well as the medical
needs of the population they serve. For this reason, safety-net providers offer a
range of non-medical services such as outreach and nutrition, social support
services (Committee on the Changing Market 2000), language translation,
transportation, and financial counseling to help patients enroll in existing
entitlement programs. These providers find alternatives to the lack of or poor
health coverage as well as help with housing, employment, and day care referrals
(Baxter and Mechanic 1997).
2.3.2 The Safety-Net as a Provider for the Uninsured
Because there is no single prototype safety-net provider and because the
safety-net is often uniquely fashioned over time in each community, public
hospitals and community health centers serve as proxies for safety-net providers.
This distinction is well earned because, when they exist in a community, public
hospitals and community health centers are often the primary source of access to
care for the uninsured. Public teaching hospitals provide care to high numbers of
nonpaying patients (Cunningham and Tu 1997). In 1994, 35 percent of all
uncompensated care was provided by urban public hospitals, which represent only
15 percent of all hospitals (Mann et al. 1997). According to a study by the National
Association of Public Hospitals and Health Systems, 28 percent of services
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provided by public hospitals in 1997 were provided to the uninsured, and 33
percent of services were provided to Medicaid patients (NAPHHS 1999a, 8).
Federally subsidized community health centers see a similarly large portion
of low-income and uninsured patients. Of the 8.3 million users of federal health
centers, 3.3 million are uninsured. Approximately 40 percent of the patients seen
by community health centers are uninsured while 30 percent to 40 percent are
Medicaid beneficiaries (BPHC 2000a). But, not all communities have public
hospitals and because community health centers are concentrated in medically
underserved areas, they reach only a small number of uninsured (estimated at 6.5
percent) (Cunningham and Tu 1997,170).
2.4 The Financial Context for Safety-Net Providers
In today’s healthcare market, providers in general are dealing with strong
forces of change which include changes in the reimbursement mechanisms that
are transforming the health industry. The decline of Hill-Burton funds, the closings
or mergers of not-for-profit and public hospitals, and the redirection of funds
intended for disproportionate share hospitals or uncompensated pools (Weissman
1996) are changes in reimbursement and funding streams that safety-net
providers are specifically experiencing. There are also changes in the broader
health industry that are changing the operating environment for safety-net
providers. These include (a) an erosion of the concentration of care for
uninsured, Medicaid and special needs populations, which heretofore, has been
the bedrock of safety-net funding; (b) the market environment within which public
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systems are now required to operate; (c) the inability of safety-net providers to be
competitive in terms of cost because many of them are academic medical centers
and provide high levels of uncompensated care; and (d) the increase in
competition for traditional patients due to Medicaid managed care penetration
(Committee on the Changing Market 2000).
The concentration of care for uninsured and Medicaid and special needs
populations has helped to secure special funding for the safety-net as a whole,
and for many safety-net providers individually. However, the character and nature
of safety-net providers adds to the cost of doing business and their non-price
competitiveness. This, as well as a recent trend toward mergers and conversions
of public and private hospitals will be discussed below.
Because serving the uninsured is part of their mission and, in some cases,
because they are obligated to do so (Kinney et al. 1999; Lipson 1997), safety-net
providers are facing increased demand for care of patients that are uninsured or
those with special needs. The decline in employer-sponsored health coverage, as
well as a drop in Medicaid enrollment, is helping to create increased demand for
safety-net services. In addition, Medicaid managed care and the changing
financial structures of the health industry are linking healthcare dollars to insured
individuals, making the uninsured more undesirable in the market place. The
capacity of safety-net providers to meet the growing demand to serve low-income
and uninsured populations is influenced by conditions in the local environment and
the availability of explicit subsidies for the uninsured (Norton and Lipson 1998).
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Safety-net providers are primarily funded through a complex patchwork of
patient care revenues and a delicate web of cross subsidies. Medicaid, and to a
lesser degree Medicare, have been the backbone of the safety-net (Baxter and
Mechanic 1997) and the source of subsidies for a substantial portion of the care
for the uninsured (Committee on the Changing Market 2000). Two programs, the
disproportionate share hospital (DSH) payment program and Federally Qualified
Health Center (FQHC) program, have yielded Medicaid reimbursement levels that
help avoid cost shifting in the provision of care for the uninsured (Committee on
the Changing Market 2000). Although DSH payments explicitly facilitate cross
subsidy of uncompensated care, most cross subsidies remain hidden (Mann et al.
1997).
Hospitals, community health centers, and local health departments also
rely on special funding initiatives that target defined vulnerable populations. These
funding sources include the Maternal and Child Health (MCH) Services Block
Grant (Title V), Ryan White Comprehensive AIDS Research and Education
(CARE) Act, and federal, state, and local fam ily planning funds. Ryan White
funds, aimed at slowing the spread of AIDS through early intervention, public
education, counseling, testing, and treatment, pay for comprehensive primary
healthcare services for AIDS-infected patients and populations at-risk such as
women, the homeless, and substance abusers (HIVdent 2000). Title V supports a
variety of grants to states to create federal/state partnerships to fund childhood
immunizations and disability, injury and violence prevention, to reduce infant
mortality and adolescent pregnancy, to provide comprehensive prenatal and
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postnatal care for women, preventive and primary care services for children and
adolescents, and comprehensive care for children and adolescents with special
health needs. In 1999, of a total $870 million budget, $700 million were earmarked
for federal and state maternal and child health (MCH) block grants (MCHB 2000).
Although Title X and Medicaid funding are the primary sources for family planning
services in the United States, MCH block grants also fund population-based efforts
such as outreach and public education (Benson Gold, and Sonfield 1999).
These categorical programs are designed to serve target populations, fund
the development of special programs such as family planning clinics and special
services to AIDS patients, provide care to uninsured participants, and allow safety-
net providers to capture market share-based on service type. Safety-net providers
also look for target funding for other at-risk populations they serve; such as,
pregnant women, migrant workers, and the homeless. Whether or not—in a
competitive market—this approach provides an advantage remains to be seen.
In summary, local funding and Medicaid DSH payments provide over 90
percent (51 and 40 percent, respectively) of subsidies for the medical care of the
uninsured in public hospitals. The Medicare DSH provides the remaining nine
percent (Baxter and Mechanic 1997, 11). Cost-based reimbursement under the
Medicaid program is the primary source of support for the care of the uninsured in
community health centers. Local health departments are funded through more
diverse and locally determined sources. Hospitals, community health centers, and
local health departments also rely on special funding initiatives to serve target
populations and vulnerable populations. Safety-net managed care plans rely
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exclusively on Medicaid funds. Because the funding base is different for each of
the safety-net groups (hospitals, community clinics, local health departments, and
health plans), the base for each is examined more closely in the following sections.
2.4.1 Hospitals
Safety-net hospitals are distinguished by the volume of charity care they
provide and their commitment to care for low-income and vulnerable populations
and those with special needs. A study on ownership and character found that the
safety-nets vary by community and take one of three forms (Norton and Lipson
1998, 4). In some communities inpatient uncompensated care is predominantly
provided by a government or publicly owned system. In other communities, one-
half of inpatient uncompensated care is provided by a public system, and the other
half by local non-safety-net providers. When there is no public hospital, inpatient
charity care is provided by private and/or non-profit providers. In addition, in some
communities inpatient uncompensated care is provided by specialty hospitals or
systems that care for specific populations such as children, adolescents, and
pregnant women or more difficult to treat populations such as homeless,
substance abusers, and patients with HIV/AIDS (Norton and Lipson 1998,4).
A safety-net hospital can be a public or a private, non-profit or for-profit,
entity. In one study, 177 out of 1191 urban hospitals in nine states were
considered safety-net hospitals; 31 percent of these were publicly owned, 53
percent were private nonprofit, and nearly 16 percent were investor-owned
hospitals (Gaskin and Hadley 1999, 357). The investor-owned hospitals were
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smaller hospitals with less than 150 beds. In the nine states studied, 37 percent of
the academic centers were safety-net hospitals.
Frequently located in large urban centers and in communities with more
racial and ethnic minorities, safety-net hospitals serve diverse populations.
Because of the communities within which they are located, safety-net hospitals
tend to serve more non-Engiish-speakers, and less-educated populations living at
or below the federal poverty level (Gaskin and Hadley 1999). For this reason,
safety-net providers tend to develop programs tailored to these populations by
employing more bilingual staff or translators and offering hospital literature in
languages other than English.
Safety-net hospitals serve predominately Medicaid and the uninsured and
serve their community at large as major providers of special medical services. In
large urban hospitals nearly 74 percent of safety-net hospital discharges and 77
percent of outpatient visits are for Medicaid and uninsured patients (Gaskin and
Hadley 1999, 352). These hospitals also provide a number of specialty services
such as trauma and burn care, high risk obstetrics, emergency psychiatric care
and AIDS treatment (Gaskin and Hadley 1999; Baxter and Mechanic 1997;
Committee on the Changing Market 2000). Although public hospitals control 17
percent of the nation’s hospital beds, they operate 45 percent of Level 1 trauma
centers and supply 24 percent of emergency visits, 66 percent of bum care beds,
and 25 percent and 33 percent of neonatal and pediatric intensive care beds,
respectively (Committee on the Changing Market 2000,48).
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2.4.1.1 Non-Safety-Net Hospitals and Uncompensated Care
Hospitals throughout the country provide billions of dollars of
uncompensated care to maintain and operate medical training programs, to
support scientific and biomedical research, and to care for patients unable to pay.
Non-safety-net hospitals support the safety-net by providing services to Medicaid
populations, the uninsured and those unable to pay for care, although not to a
significant degree (Gaskin and Hadley 1999). The low amount is primarily
because they do not want direct responsibility for indigent care (Baxter and
Mechanic 1997). However, with the exception of hospitals in the poorest
communities which offer considerably more, the level of charity care provided by
non-safety-net hospitals is not commensurate with the value of the tax exemption
they are allowed (Kane and Wubbenhorst 2000, 205).
As important, communities with public hospitals receive greater amounts of
uncompensated care overall than communities with no public hospital because of
the safety-net role these hospitals play (Cunningham and Tu 1997). Using
American Hospital Association data from member hospitals Fishman (1997)
looked at uncompensated care provided by hospitals to better identify safety-net
hospitals. Fishman found that uncompensated care was concentrated in a small
number of hospitals. Of the small number of hospitals, half were public hospitals
owned by state universities or local governments, and the other half were religious
and private hospitals. One-third were academic medical centers. Sixty percent
were in the South Central region of the U.S. (Kentucky, Texas, Oklahoma). South
Atlantic states, Delaware to Florida were also over-represented (Fishman 1997,
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218). Urban public hospitals provide one-third of the uncompensated care in this
country, which is double their share of the hospital market; public hospitals with
major academic medical centers provide three times the amount of
uncompensated care as their share of the hospital market overall (Mann et al.
1997, 227).
2.4.1.2 Examination and Treatment of Emergency Medical Conditions and
Women in Labor
All hospitals with emergency departments face additional mandates to
provide care to those without financial means. Public Law 101-239, Examination
and Treatment of Emergency Medical Conditions and Women in Labor (EMTALA)
requires hospitals with emergency departments to examine any individual that
presents with a request for medical care to determine whether he/she needs
emergency medical care. The law also prohibits the transfer of patients to other
institutions unless the patient is stable and the receiving hospital is willing to
accept the transfer. As a rule, emergency departments must treat pregnant
women or any person with acute symptoms, including pain, that if not treated could
place a person’s health in jeopardy or result in disability or death (U.S. Code,
EMTALA 1989). This legislation is actively enforced because it requires
healthcare providers and emergency departments to report violations and allows
state health agencies to levy $25,000 - $50,000 fines per incident of wrongdoing.
Low-income patients are more likely to use the emergency department,
and those who are hospitalized as a result of an emergency department visit use
more resources than patients with the same condition admitted by other means. In
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addition, hospitals with high emergency department use may see more admissions
of low-income patients and experience substantial financial disadvantage under
per-case reimbursement systems such as Medicare (Stem, Weissman, and
Epstein 1991). Once treatment has begun, hospital accreditation requirements
add additional pressure to provide necessary care (U.S. Code, EMTALA 1989).
Although less than optimal, the uninsured are able to obtain urgent and emergency
care when needed.
2.4.1.3 Disproportionate Share Hospital Payments (DSH) Program
Medicare and Medicaid and the subsidies embedded in their respective
DSH programs are an important source of funding for safety-net hospitals. For
hospitals, over 94 percent of their revenues come from patient fees, paid mostly by
insurance (Fishman and Bentley 1997, 32). For major safety-net hospitals,
Medicaid revenues account for an average of 41 percent of patients served (Biles
and Abrams 1998). In 1997, Medicaid and Medicare DSH payments to safety-net
hospitals totaled $12.5 billion and $4.6 billion, respectively (Gaskin and Hadley
1999, 366). These funding sources began with the Omnibus Budget
Reconciliation Act of 1981 (U.S. Code 1981, OBRA) which set limits on the federal
participation in Medicare and gave states greater flexibility to design eligibility,
benefits, and payment provisions (Section 721). The Act replaced the provision
that hospitals be paid reasonable costs with a requirement to pay reasonable and
adequate rates for efficient and economical operations (Section 725). The Act
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permitted states to define services for the medically needy without providing
minimum standards (Section 726).
The Medicare OSH program was created to protect hospitals serving a
disproportionate number of low-income patients by mandating that states give
them special consideration in rate setting. Under this program state funds would
be matched by federal funds to compensate hospitals for care provided to patients
unable or unwilling to pay for services (U.S. Code 1981, 396-1409, OBRA). This
legislation was further enforced and expanded to the Medicaid program with the
Tax Equity and Fiscal Responsibility Act of 1982 (U.S. Code 1982, TEFRA) and
the Consolidated Omnibus Budget Reconciliation Act of 1985 (U.S. Code 1985,
COBRA) which later was incorporated into Comprehensive Omnibus Budget
Reconciliation Act of 1986 (U.S. Code 1986, COBRA). The statute includes
criteria for identifying hospitals with a disproportionate number of low-income
patients as well as a requirement to compensate these hospitals for higher-than-
average costs (Section 9105). In this way Congress created payment adjustment
programs, in both the Medicaid and the Medicare programs, based on inpatient
hospital days for federal program beneficiaries and uninsured in hospitals. Large
urban hospitals, many with medical training programs, are the greatest
benefactors (Fishman and Bentley 1997).
Hospitals with a low-income utilization rate of 25 percent or more, or a
Medicaid utilization rate that is at least one standard deviation above the mean for
all hospitals in the state, are eligible for the DSH program (U.S. Code 1986,
COBRA, Section 9105). The utilization rate is determined by the sum of two
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ratios: Medicaid revenues without DSH payments divided by total revenues and
inpatient charity care charges divided by total inpatient charges. The number of
hospitals eligible for these payments varies from year to year, but approximately
600 (out of 5000) hospitals meet this criterion (NAPHHS 2000).
2.4.1.4 Academic Medical Centers
DSH is particularly important to safety-net hospitals with academic medical
centers. Although academic medical centers represent only 2 percent of U.S.
hospitals, they receive 64 percent of DSH payments because 82 percent are major
safety-net hospitals and they provide 23 percent of the total $28 billion in
uncompensated (Biles and Abrams 1998, 19). These hospitals also receive
Indirect Medical Education (IME) and Graduate Medical Education (GME)
payments, which in 1997 totaled $2.2 billion and $4.6 billion, respectively (Gaskin
and Hadley 1999, 366). These support structures are at risk due to legislation like
the Balanced Budget Act (BBA) of 1997 which, although delayed by a two-year
moratorium, will implement significant cuts in Medicaid DSH, reducing major direct
subsidies used to care for poor uninsured (Committee on the Changing Market
2000). Public patients and the hospitals that care for them are likely to bear the
brunt of these cutbacks as service levels at Medicaid-dependent hospitals are
reduced or they are forced to go out of business (Dranove and White 1998).
For some, these provider subsidies and publicly funded health insurance
programs such as Medicaid and Medicare work as safety-nets and crowd out
private insurance. Rask and Rask (2000) found uncompensated care
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reimbursement funds were associated with less purchase of private health
insurance and higher levels of uninsured, particularly in communities with public
hospitals (Rask and Rask 2000).
2.4.2 Business-Practice Considerations: Safety-Net Hospitals
Local resources and provider competition influence public funding available
for healthcare and determine the position of safety-net hospitals in that market.
Safety-net providers were established with a mission to provide service or
education or both: for example, academic medical centers. These providers have
a legal mandate to assure open access to healthcare, irrespective of ability to pay,
just like public hospitals. The result is that the uninsured and those unable to pay
for care are concentrated in these hospitals.
The pooling of disproportionate numbers of low-income people and
uninsured in a small number of hospitals is reinforced by DSH subsidies. The
embracing of managed care by Medicaid programs is contrary to historical funding
practices for safety-net hospitals and places these providers at risk of losing both
market share for Medicaid and the linked subsidies for uncompensated care. As a
result, today’s safety-net hospitals must operate on revenue streams dependent
on inpatient care while they reinvent themselves to be competitive in a price-
based, managed care market. This problem is exacerbated as other non-safety-
net hospitals merge or convert to for-profit status in order to compete more
effectively.
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2.4.2.1 Competitive Price-Based Markets
The concentration of uninsured and the cost of uncompensated care which
in some cases are overlaid upon the cost of academic medical training, contribute
to higher operating costs for safety-net hospitals. As a consequence, in a price-
based business environment where public and private purchasers negotiate
contracts for services provided for a defined population, these providers are not
competitive (Fishman and Bentley 1997). Managed care contracting with
sophisticated payment terms, financial incentives, and utilization control measures
has contributed to a highly price-sensitive, privately insured market (Mann et al.
1997). These attributes are introduced into government-sponsored health
insurance programs as they adopt managed care strategies. The rapid growth in
Medicaid-managed care enrollments, 30 percent over a one-year period (June
1996 to July 1997), has increased competition for Medicaid patients and revenues
(Norton and Lipson 1998, 11). This shift increased attention to Medicaid program
costs and public budget constraints and paved the way for entrance into a price
driven market (Fishman 1997). By design, the character and nature of safety-net
hospitals make them unlikely candidates for price-based competition. As a result,
because Medicaid represents a major portion of the total revenue for safety-net
providers and is the primary source of subsidies for the care of the uninsured,
competition is heightened among providers for Medicaid patients. Revenue loss
represents a danger to safety-net providers (Gold, Mittler, and Lyons 2000; Norton
and Lipson 1998).
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2.4.2.2 Policy-Based Dependency on Inpatient Volumes
One handicap safety-net hospitals must overcome is a funding policy
design that rewards inpatient care. Safety-net hospitals are highly reliant on DSH
funding which creates disincentives for developing programs to serve the
uninsured before they need hospital care. DSH is not effective in targeting public
resources to providers who serve the uninsured for three reasons. First, with
pressures from increased competition, non-safety-net providers seek to retain their
share of the Medicaid market, which allows them to also seek DSH funding. The
loss of Medicaid market share decreases the DSH funding pool available for core
safety-net providers. Also, the funding formula excludes non-hospital providers.
The focus on inpatient care is at odds with the general trend to outpatient primary
care and preventive care. Finally, states retain a portion of DSH funding, again
eroding what is available for core safety-net providers (Committee on the
Changing Market 2000). In some states, the shift of Medicaid into managed care
has flattened the base of DSH payouts because many more non-safety-net
hospitals have become eligible for the program (Andrulis 1997).
2.4.2.3 Hospital Conversions and Less Charity Care
The trend to conversion from public or not-for-profit to for-profit hospitals
has resulted in lower levels of uncompensated care in communities where these
conversions have occurred. The loss of charity care is greatest when a public
hospital converts to for profit (Needleman, Lamphere, and Chollet 1999, 132).
Since 1980, one-quarter of the public hospitals in the country have closed or
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converted to for profit or nonprofit status (Needleman, Lamphere, and Chollet
1999). In a study of 127 hospital conversions from not-for-profit to for-profit status,
uncompensated care fell from 5.3 percent of total expenses to 4.7 percent on
average, an average $400,000 reduction per hospital per year (Thorpe, Curtis, and
Seiber 2000). Even prior to conversion these hospitals provided less
uncompensated care, 662 fewer admissions on average than nonprofits that did
not convert (Thorpe, Curtis, and Seiber 2000). When a public hospital converted
to for-profit status, the drop in uncompensated care levels was greater, going from
5.2 percent of total expenses to 2.5 percent. This represents (per hospital) an
$800,000 yearly drop in spending on uncompensated care and 150 fewer
admissions per year. Overall, the study suggests that one result of these
transitions from non-profit to for-profit might be a significant reduction
(approximately 13 percent) in uncompensated care (Thorpe, Curtis, and Seiber
2000).
Some authors argue that market pressures have constrained the ability and
willingness of hospitals to provide uncompensated care, in part because
competition and managed care, both designed to control costs, have limited the
ability to shift costs (Cunningham and Tu 1997). The high cost of uncompensated
care for uninsured with catastrophic or chronic illness inhibits safety-net hospitals
from serving the uninsured in a coordinated or comprehensive way (Kinney et al.
1999). Lower access to care in areas with high rates of uninsured suggests that
safety-net providers in these areas are overburdened and unable to meet the
heavy demand for indigent care (Cunningham 1999). Other researchers have
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found that hospitals that convert to for profit status behaved like for profit hospitals
prior to converting, providing less uncompensated care than other similar facilities
(Needleman, Lamphere, and Chollet 1999).
2.4.3 Community Health Centers
2.4.3.1 Structure and Funding
Community health centers are distinguished as safety-net providers
because on the whole, they have mission-driven public or private non-profit group
practice models, and were established specifically to serve poor communities.
The Community Health Center Program (CHCP) funded under Section 330 of the
Public Health Service Act encouraged development of Community Health Centers,
Migrant Health Centers as well as Health Care for the Homeless and Public
Housing programs through the Federally Qualified Health Center (FQHC) program
(BPHC 2000b). The Rural Health Centers (RHC) program, established in 1977,
funds health centers that are legally mandated to service Medicaid and Medicare
but are discouraged from serving the uninsured though financial disincentives
(Committee on the Changing Market 2000). With time, the structure of community
health centers has become more uniform as a result of funding sources; however,
the character and service mix of CHCs are uniquely defined by their historical
trajectory and local environment.
CHCs that comply with Section 330 (formerly 329, 330, and 340) of the
Public Health Service Act and offer services in designated Medically Underserved
Areas (MUA) or to Medically Underserved Populations (MUP) are eligible to
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receive cost-based reimbursement to provide health services to underserved
populations. The Public Health Service defines the underserved as persons who
face barriers in accessing services because of difficulties in paying for services,
because of language or cultural differences, or because they reside in
communities with insufficient numbers of health professionals/resources to serve
them (BPHC 2000b). Community Health Centers, Migrant Health Centers as well
as FQHC "Look-Alikes,” an estimated 124 throughout the country, are community-
based or hospital-sponsored health centers that also meet Section 330
requirements (Committee on the Changing Market 2000, 62). Collectively, health
centers funded by the Public Health Service are referred to as FQHCs; they are
required, among other things, to establish governing bodies with a majority of
members being patients of the center, to conduct a community needs assessment
to ensure that the health center understands and responds to the needs of the
community it serves, and to meet program staffing and productivity standards
(BPHC 1998).
Rural Health Centers (RHC's) are certified in areas where Medicaid and
Medicare patients do not have access to providers; they are also eligible for cost-
based reimbursement. RHC’s have no obligation to serve the uninsured. These
centers were established with the idea that they would not compete with private
practices and would only serve Medicaid and Medicare patients (Committee on the
Changing Market 2000). To prevent competitive private practices from seeking
cost-based reimbursement, the BBA of 1997 prohibits RHCs from being owned,
controlled, or operated by another entity (BPHC 2000a).
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Although rapidly growing, CHCs are small in number in contrast to the
larger health delivery network and represent miniscule healthcare spending. In
fiscal year 2000, about 670 FQHCs received funding through section 330 to
provide family-oriented primary and preventive healthcare services and non
medical support sen/ices for people living in rural and urban medically
underserved communities (BPHC 2000b). These programs have multiple delivery
sites; it is estimated there are 3000 urban and rural locations serving
approximately 10 million patients. Based on fiscal year 2000 appropriations to the
Community Health Center Program ($1,018 million), Migrant Health Centers
Program ($87.5 million), and Health Care for the Homeless Program ($88 million),
and the FY1999 appropriation to the Public Housing Program ($11.3 million), in
aggregate, these health centers received more than $1.2 billion in funding (BPHC
2000a). There are nearly 2,500 RHC’s serving nearly 4 million patients, 70
percent of whom are Medicaid or Medicare patients (Committee on the Changing
Market 2000, 63).
2.4.3.2 FQHC Cost-Based Reimbursement
FQHCs are reimbursed for the cost of care provided to Medicaid and
Medicare populations. Under the Medicaid prospective payment system (PPS),
states are required to pay FQHCs and Rural Health Clinics (RHCs) 100 percent of
the average of their reasonable costs of providing Medicaid services. Services
allowed under this program include services, supplies, and medical services
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provided by practitioners as well as support services provided by clinical
psychologists, clinical social workers, nutritionists, etc.
The highly regulated network of FQHCs facilitates state and federal
Medicaid Agencies as well as the Health Resources and Services Administration
(HRSA), now calling itself the access agency, to provide a targeted and limited
response to safety-net concerns and the increasing number of uninsured. The
number of uninsured treated by FQHCs grew 60 percent from 1990 to 1998, as did
their dependency on Medicaid. Program payments grew from $254 million in 1990
to over $1 billion in 1998 and went from 21 percent of total FQHC revenues to 34
percent. Medicaid funding replaced federal grants, which declined from 42 percent
of total revenues to 26 percent in the same time period. Total dollars for federal
grants increased 42 percent, growing from $508 million to $746 million as the
number of patients served increased (Committee on the Changing Market 2000,
120). Cost-based reimbursement as well as federal, state, and local grants enable
this group of safety-net providers to use revenues generated from Medicaid
patients to pay for organizational infrastructure and staffing which can be used for
both insured and uninsured patients.
As Medicaid and Medicare programs move into managed care, the new
funding for prospective payments was incompatible with cost-based
reimbursement and was threatening the unique funding mechanism for FQHCs. In
addition, the BBA of 1997 mandated a five-year phase out of cost-based
reimbursement. This provision was amended in 1999, delaying the phase out until
2003-2005, and called for a study to determine a replacement payment method for
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CHCs. At that time only 24 states were still paying FQHCs cost-based
reimbursement while other states were paying centers as little as $9-10 per visit
(Committee on the Changing Market 2000,102). Due to the unplanned elimination
of cost-based reimbursement; FQHCs were using grants intended for the
uninsured to subsidize the Medicaid program. To remedy the situation, the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA
of 2000) authorized cost-based payments for FQHCs to continue under PPS
beginning January 1, 2001 (Richardson 2000).
In a policy letter dated January 19, 2001, addressed to state program
directors, Medicaid Director Westmoreland clarified that states are required to
make supplemental payments to Federally Qualified Health Centers (FQHCs) and
Rural Health Clinics (RHCs) that subcontract (directly or indirectly) with managed
care entities and are to ensure that these centers will receive reasonable cost-
based reimbursement (Westmoreland 2001). State Medicaid programs are also
required to include ambulatory services in their state plans that are then paid
under cost-based reimbursement. Further, states are prohibited from imposing
any requirement on managed care organizations that would result in FQHCs
getting less than cost-based reimbursement (Richardson 2000).
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2.4.4 Business-Practice Considerations:
Community Health Centers
2.4.4.1 Community Need
Many CHC are mission-driven creatures of a community formed to respond
to a community need as opposed to serving a business interest. The governance
structure of FQHCs and their location in medically underserved areas contribute to
a social justice agenda and grassroots support.
2.4.4.2 Medicaid and Uninsured Inexorably Linked
Medicaid and care for the uninsured are inexorably linked because of the
transient nature of Medicaid eligibility. Medicaid beneficiaries are more vulnerable,
and have more diverse needs, less experience or capacity to deal with choice, and
less ability to go out of plan for care. This population needs non-medical services
such as transportation, translation, child care, and outreach. These are services
that may not be part of a managed care contract (Committee on the Changing
Market 2000).
Managed care contracting limits the ability of health centers to meet the
health needs of a growing uninsured population and, to a small degree, negatively
affects their financial performance (Mays 1999; Mays et al 2000-01). When
Medicaid beneficiaries seek care outside the safety net, the portion of patients
reimbursed at cost is reduced, and CHCs are handicapped in their ability to cross-
subsidize care for the uninsured.
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Like safety-net hospitals, CHCs seek federal, state, and local grants,
seeking strategic positioning to retain market share dominance in market niches.
In addition, cost-based reimbursement allows CHCs to hire case managers,
education specialists, clinical pharmacists, nutritionists, and other support staff to
enable them to care for complex patients with medical and non-medical needs
(Committee on the Changing Market 2000). However, cost-based reimbursement
insulates CHCs from market realities and creates disincentives to focus on cost
effectiveness.
2.4.5 Local Funding for the Safety-Net
Many local governments which are the designated providers of last resort
and legally responsible for care for the medically indigent meet these obligations
through subsidies to local health departments, public hospitals and clinics as well
as community health centers or other local health providers. Provider of last
resort, a legally complex term, generally means that local entities must make
provisions for the care for persons with urgent or emergency medical needs. The
local entity that is responsible is defined locally. Similarly, medically indigent, also
a legal term locally defined, does not mean the uninsured, but rather a segment of
the uninsured. Generally these are very poor adults with income below 100
percent FPL and chronic or acute medical conditions. Nationwide, more than
3,000 city and county Local Health Departments (LHDs) are responsible for core
public health functions (Lipson 1997). Core public health functions are (a)
assessment of population health status, (b) assurance of compliance with practice
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standards and public spending objectives, of access to needed health services
and of public health safety through disease surveillance and control and quality
monitoring, and (c) policy analysis and development to guide local health policy
and funding priorities. Many LHDs also provide targeted population-based
personal health services, immunizations, well child and disability-prevention exams
for children and adolescents, public health nursing, and alcohol and drug and
mental health services. Only 30 percent of local health departments provide
primary care services (Cunningham and Tu 1997).
Support from local and state governments is a critical factor to safety-net
viability and is especially critical to public hospitals. Devolution, the shift of
responsibility and accountability from the federal government to the states and
from the states to localities, has increased the role of local public policy, economic
and competitive forces, and community values as the principal drivers of change in
today’s healthcare market (Baxter 1998). For this reason, public hospital support
hinges on the actions of local policy makers and community leaders that believe
that the public sector should provide services directly and competitively. For some
urban safety-net hospitals, local support means a 17-fold difference in government
funding per bed (Gaskin and Hadley 1999). Between 1995 and 1997, state and
local appropriations for National Public Hospital Association member hospitals
grew from approximately $28 million to approximately $32 million on average.
However, this small increase has made little net difference in light of large drops in
Medicaid and DSH payments over the same period (NAPHHS 1999a). Local
subsidies financed 69 percent of uncompensated care provided in National
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Association of Public Hospitals and Health System member hospitals in 1997
(Committee on the Changing Market 2000, 59).
2.4.6 Business-Practice Considerations: Local Environments
The business practice considerations for safety-net providers are two-fold:
(a) continued local funding for essential public health functions as well as for direct
service delivery provided by safety-net hospitals and clinics, and (b) coordination
of public funding and health plan premiums for population-based personal health
services and preventive health promotion and integration of population-based
services with primary care.
2.4.6.1 Local Support for Safety-Net Providers
Local government support is more significant in some areas of the country
than in others. Some communities use local property taxes to support their public
hospitals (Norton and Lipson 1998) while other communities hold deeply
engrained anti-tax, anti-government attitudes that undermine the efforts of local
public health systems to reinvent themselves to operate in a competitive managed
care market (Baxter 1998). Even with recent budget surpluses, state and local
governments overall have not significantly increased spending for indigent care.
Some argue that as the uninsured numbers grow, local governments simply are
not assuming their financial, legal, or ethical responsibilities for those that do not fit
narrow program eligibility criteria (West 1999). Furthermore, between 1991 and
1997, 35 public hospitals nationwide were relinquished and converted into for-
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profit status (Thorpe, Curtis, and Seiber 2000). Active community advocates for
safety-net populations, and the tone of the local media coverage influence local
attitudes and politics and local public financial support for safety-net providers
(Baxter and Mechanic 1997).
2.4.6.2 Population-Based Cross Sector Approaches
Public health and primary care medicine do not work effectively together.
The reasons for this are a historical division of responsibilities and professional
cultures that have not placed value on building partnerships. Managed care,
through risk contracts and market competition, is increasing the importance of
prevention and early intervention and requiring providers to manage within per
capita reimbursements both controlling costs and achieving better outcomes for
enrolled populations (Welton, Kantner, and Katz 1997). The funding sources and
responsibilities for population-based health, a form of public health, and primary
care medicine are merging. Combining the two disciplines, yesterday s public
health and primary care will become “tomorrow’s population-health, clinical-and-
preventive-primary-care and community-based medicine" and will lead to the
growth of integrated community health systems in the context of a market-oriented
financing system (Welton, Kantner, and Katz 1997).
Business as usual will not work in today’s healthcare environment. In
recent years, despite managed care and competition, safety-net providers have
been able to maintain their commitments to serving the uninsured through quick
and strategic responses to the changing environment (Norton and Lipson 1998).
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Because the division of responsibilities between public health and primary care is
blurred, multidisciplinary, cross sector approaches are needed to support the
active involvement of communities in promoting health and preventing disease in
the presence of inequities in health status and growing economic, cultural, and
ethnic diversity (Welton, Kantner, and Katz 1997,287).
2.4.6.3 Social Justice
Social justice is a long held value of public health leaders and can be a
powerful force working in the interest of communities. Safety-net providers can
adopt a “servant” role and align themselves with communities or lead by example
by identifying and modeling best practices to shift public investments from acute
medical care to broader public health needs (Baxter 1998, 327). In addition,
safety-net providers, as enterprises of large highly unionized public entities such
as city or county governments and universities that are also purchasers of health
insurance, may be able to use these relationships to increase market share
(Baxter and Mechanic 1997).
2.4.7 Health Plans
Under Medicaid, managed care health plans as new conduits of patients
and Medicaid revenues to safety-net providers became important players in
maintaining the nations’ safety net. But, like hospitals, not all health plans hold
that distinction. The central goals for most state Medicaid agencies implementing
managed care are to control costs and improve access to and quality of care for
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beneficiaries. For some states the prudent buyer strategy proved to be in conflict
with their interest in preserving the healthcare safety-net for the uninsured
(Coughlin et al. 1999). Some argue that it is unrealistic to achieve cost savings for
health services provided to vulnerable populations because of the high level of
services these populations require (Shi 2000). Further, managed care
organizations have traditionally used risk-averse strategies, enrolling patients who
are healthy rather than working to make them healthy (Baxter 1998).
2.4.7.1 Transitioning Safety-Net Providers to Managed Care
State agencies addressed these and other related concerns by designing
managed care programs to retain safety-net providers’ participation in the
Medicaid program with special design features, premium subsidies, and benefit
packages (Coughlin et al. 1999). Defacto by extension, health plans that
assemble provider Medicaid managed care networks around safety-net providers
become part of the safety-net fabric.
Various program design features were developed to assist safety-net
providers to continue to serve the Medicaid population and to retain funds that
enabled them to care for the uninsured. At one extreme, California developed a
two-plan model that gave traditional Medicaid providers and county health delivery
systems the option to develop a local health plan that they would design and
oversee. Known as Local Initiatives, these plans were required to contract with
safety-net providers (CDHS 1993). Although limited, development dollars carved
out of state Medicaid OSH funds were allocated to counties willing to spearhead a
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local development effort.3 Permitting locally based safety-net provider systems to
form local health plans or MCOs allowed them to retain autonomy and to prepare
to operate in a managed care system (Gold, Mittler, and Lyons 2000).
2.41.2 Health Plans New Safety-Net Providers
Strategies used by state Medicaid agencies to contract with MCOs, include
(a) mandating contracts with safety-net providers, (b) imposing quality and access
standards to encourage collaboration with safety-net providers, (c) allocating
preferential selection points to health plans using safety-net providers in their
networks for Medicaid contracts, (d) using auto-assign options to give preferential
enrollment to safety-net plans, and (e) offering enhanced reimbursement to health
plans with provider networks comprised primarily of safety-net providers (Coughlin
etal. 1999; Lipson 1997).
Auto-assign or default enrollment mechanisms allow for Medicaid
beneficiaries to be automatically enrolled into a safety-net health plan when
beneficiaries fail to make a health plan selection. Enhanced reimbursement or
“transitional” payments are offered to reflect the higher cost structure of safety-net
providers, to protect cost reimbursement for federally qualified health centers, and
to enable safety-net providers to ramp up to participate in managed care (Lipson
1997, 103). States also use open access self-referral to select public health
service options to enable continued funding for public health services and to create
3
The writer was designated lead staff for one California county health system targeted for a Local
Initiative during these developments.
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incentives that would otherwise be tacking for managed care organizations to work
with safety-net providers and to consider ways to sustain critical public health
functions (Gold, Mittler, and Lyons 2000).
Health plans developed around safety-net providers become part of the
safety-net fabric when they adopt a dual role of principal-agent for (both the state
and safety-net providers) or when they serve that purpose for safety-net providers.
In the former, the state (i.e., principal) delegates purchasing responsibility to health
plans (i.e., agent) and health plans (i.e., principal) delegate delivery responsibilities
to providers (i.e., agents). Safety-net provider-owned health plans are examples
of the latter where the health plan (i.e., agent) is created to enable safety-net
providers (i.e., principals) to participate in Medicaid managed care contracts.
The viability of safety-net providers is important to the success of safety-net
health plans working as agents of state Medicaid agencies or as creatures of
safety-net providers. The principal-agent model appears to be the dominant
ethical platform in U.S. businesses (Quinn and Jones 1995) and is used to
understand situations where one party (i.e., the principal) delegates work to
another (i.e., the agent), generally through contract arrangements (Jensen and
Meckling 1976). In traditional business arrangements, agency theory is useful in
designing executive and managerial compensation practices such as salary-plus-
merit pay systems and commissions (Conlon and Parks 1990; Eisenhardt 1989;
Milkovich, Gerhart, and Hannon 1991; Tosi and Gomez-Mejia 1989) and to predict
occupation-based differences in job evaluation and pricing and in pay variability
(Newman and Huselid 1992). Agency theory has also analyzed government and
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employer efforts to finance healthcare and control healthcare costs (Politser 1991)
to illustrate incentives that exist for dysfunctional behavior within healthcare
(Goddard, Mannion, and Smith 2000) and to examine problems faced by MCOs
working with state Medicaid programs (Sekwat 2000). The effectiveness of
principal-agent relations is a factor of how well principal and agent goals are
aligned and ease and expense for the principal to monitor the agent's performance
(Eisenhardt 1989).
2.4.8 Business-Practice Considerations: Health Plans
Safety-net providers are collaborating with MCOs to continue serving
Medicaid beneficiaries and to retain associated patient revenues and subsidies
(Kinney et al. 1999). The “arranged marriages" of health plans with community
providers have both benefits and challenges (Lipson 1997, 106). The primary
challenges are differences in organizational cultures and priorities between health
plans and safety-net providers and aligning goals for functional principal-agent
relationships. The opportunities for these new partnerships are related to quality
assurance and reporting requirements and to work together to identify cost
effective strategies for treating populations that are on and off health insurance.
2.4.8.1 Consumer Interest in Quality
Consumers are demanding low-cost, high quality healthcare products and
services. Public accountability is driving improvements; for this reason, MCOs that
learn to keep people healthy will also leam how to keep them happy and as
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members (NCQA 2000). To be successful MCOs will need to change their focus
from cost management to quality and care management to deliver effective and
efficient healthcare services. MCOs will need to (a) collaborate with other
stewards of healthcare resources, (b) institute continuous quality improvement, (c)
provide incentives for consumers and employers to take responsibility for health
behavior, (d) determine how to ration healthcare products and services, and (e)
continue to advocate for universal coverage and integrated reimbursement for
healthcare (Savage et al. 2000,103).
2.4.8.2 Obligations and Prevention
Safety-net providers have no effective way to avoid treating acutely ill
patients that present themselves at their doorsteps. Focusing on “providers of last
resort and those who specialize in high-risk, seriously ill populations” may prove a
more effective strategy than risk-adjusted capitation and reinsurance
arrangements to eliminate the incentive for HMOs to enroll healthy populations
(Buchanan, Leibowitz, and Keesey 1996, 262). Appropriate capitation of safety-
net providers may enable them to prospectively manage the care of seriously ill
patients instead of dealing with the consequences of unmanaged care (Buchanan,
Leibowitz, and Keesey 1996). It is possible that when enrollments stabilize there
may be incentives to develop partnerships to promote the overall health of
Medicaid enrollees and to change the focus to one where the health of the
community is important (Baxter 1998).
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2.4.8.3 Marketing to the Uninsured
Another promising strategy is for networks of safety-net providers,
hospitals, and community clinics to provide comprehensive services designed for
the uninsured poor. Providers would monitor and coordinate care throughout the
continuum of care the uninsured poor require both in and out of public and private
health insurance programs (Kinney et al. 1999).
2.5 Changes in Healthcare Financing
Medicaid contracting with MCOs is one of the most significant and complex
transformations in the U.S. health system (Rosenbaum 1998). Although a
politically painful process in some states, managed care has produced predictable
program expenditures and savings that some states have used to expand
coverage to previously uninsured populations (Long and Kirsch 1998). In addition,
states have found that managed care has (a) increased access to a greater
choice of providers, (b) created medical homes for beneficiaries which help to
reduce inappropriate use of services such as emergency and inpatient services
while increasing access to primary and preventive care such as prenatal care and
more aggressive asthma care management, (c) integrated care for persons with
chronic illness and disability by managing high-cost cases and coordinating care
across medical and social needs, and (d) given states more and improved
information about the care of beneficiaries enabling them to measure outcomes
and provide public accountability (Somers, Hurley, and Oehlmann 2000, 520).
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However, Medicaid managed care is accompanied by financial incentives for
health plans to shift patients and revenues away from more costly traditional
safety-net providers, particularly hospitals with academic medical centers (Biles
and Abrams 1998).
In the following section the economic principles of managed care and
market competition are examined to understand how these are changing the
behavior of providers broadly and how these changes are affecting safety-net
providers more specifically.
2.5.1 Managed Care Economics
Managed care contracting has changed the financial underpinnings of
healthcare delivery. Although radically different than for fee for service, Cigich and
Mischler with Milliman and Robertson, Inc. (1996) suggest that the economic
principles of managed care are simple but difficult to achieve. The elements of
managed care economics are a) members generate provider revenue, b)
members are sold through “member groupers," c) members are moving to value-
based criteria in the selection of provider networks, and d) value is dependent on
clinical autonomy and accountability (Cigich and Mischler 1996, 2). This simplistic
model introduces two powerful concepts: the member and the member grouper—
neither of which existed under fee-for-service health delivery—that are the
cornerstone of important system changes. In this model, members replace patient
fees as the source of revenue for healthcare providers, while member groupers
refers to the role of health coverage buyers, such as government and employers in
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determining which providers will have an opportunity to serve the members for
whom they are purchasing health services. Absent from this model, when applied
to Medicaid managed care, is the inextricable link between Medicaid funding and
subsidies for the uninsured.
2.5.1.1 Members as Revenue Sources
Managed care changed the focus from patient encounters to membership
and turned patients into covered lives or potential members. It also shifted the
focus from illness or complaint-oriented care, to health maintenance and
prevention. Under fee-for-service health insurance, patients were free to choose
providers, and providers were paid for services rendered either by the patient
directly or, if insured by a third party, generally by an employer. With fee-for-
service or payment-by-the-piece, providers were rewarded for providing more
services. The service orientation, or a do-more-philosophy, served to develop
patient trust and produce income. Patient revenues that exceeded costs were
used to cross subsidize the care of non-paying or uninsured patients (Mann et al.
1997). In lieu of fee for service, under managed care providers are paid
prospectively a per-member-per-month (PMPM) fee for specified services or scope
of care. This prepaid, global fee arrangement created a basic shift in a provider’s
business model placing emphasis on managing to a fixed reimbursement and
motivating providers to join networks. Networks are important because enrolling
members results in revenues. The larger the network, the more potential it has to
acquire entire groups of members from purchasers.
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Providers that are able to attract and maintain members and to provide
cost effective care are rewarded. The change for safety-net providers is even
more radical. Because Medicaid reimbursement was low on a fee-for-service
scale, few providers, outside of safety-net providers, were willing to accept
Medicaid payment. In a recent survey of 442 physicians, one-third refused to
accept Medicaid patients because of non-financial barriers, malpractice risk,
bureaucracy, and/or the perception that these patients are more demanding and
less compliant (Friedman 1993). As health plans with private provider networks
attract more Medicaid managed care patients, the economic base for safety-net
providers, who are dependent on inpatient Medicaid days is eroded (Cunningham
and Tu 1997). By concentrating on Medicaid and the uninsured, as discussed
earlier, safety-net providers were able to secure subsidies and to develop a
patchwork of funding to remain financially viable. To retain the Medicaid base, the
challenge for safety-net providers today is to become part of networks to attract
and maintain members and to provide cost effective care. Network membership
will not solve the problem of subsidies that were constructed into the fee-for-
service world order.
2.5.1.2 Purchasers as “Member Groupers”
Employers, unions, Medicaid and Medicare programs, referred to as
“member groupers” by Cigich and Mischler (1996) went from a passive role of
payers of health bills to a more powerful role of prudent buyers or purchasers of
health coverage. With this shift in power from providers to purchasers came the
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decision-making ability to determine the benefits covered by the premiums paid
and to select preferred provider groups. Members are “packaged" in order to
leverage buying power, and provider networks must compete for preferred
provider status (Cigich and Mischler 1996, 2). Price-sensitive purchasers,
particularly in markets with surplus providers, have the ability to shift blocks of
patients to low-price locations (Schwartz 1996). With the aggregation of
healthcare dollars paid in the form of prepaid premiums, non-safety-net providers
are more interested in the Medicaid market, and beneficiaries have the opportunity
to enroll in private plans with a broader choice of providers and health facilities.
Though this has a less robust effect than the driving off of Medicaid beneficiaries,
the private market also competes for the safety-net’s private-paying patient base
(Norton and Lipson 1998).
2.5.1.3 Value-Based Provider Selection
Cigich and Mischler (1996) posit that, with the ability to generate
competition among providers and health plans, purchasers and members will
move to a value-based selection of provider networks. Cost of health coverage
has been a major concern for purchasers and has led most large employers to
managed care programs (Beauregard and Winston 1997). Cost continues to be
an overriding concern (Cross 1999). Some employers are using comprehensive
cost and quality analyses to evaluate and manage their health plans (Beauregard
and Winston 1997), but most purchasers fail to use data or quality measures to
select health plans (Parrott 1998). A few cutting-edge companies are beginning to
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demand clinical goals for child immunization rates, prenatal care, and
mammography screenings. Some healthcare purchasers are using contracts to
implement disease management programs (Cross 1999). Very large employers
such as those represented by the Pacific Business Group on Health, a purchasing
coalition for 32 large California employers, can wield their purchasing power to
improve performance. For example, the Pacific Business Group was able to
negotiate a two percent incentive for health plans to meet administrative targets in
customer service, member satisfaction, and some quality measures as well as
targets for electronic data transmission (Cross 1999).
2.5.1.4 Clinical Autonomy and Accountability
The fourth economic principle of managed care that Cigich and Mischler
(1996) put forward is that clinical autonomy and public accountability are needed
to produce value. Providers are under increasing levels of financial risk and are
being held more accountable for demonstrating their ability to provide cost
effective high quality care (Rosenstein 1999). Managed care is beginning to show
results in improving access and quality of care and is providing accountability for
publicly financed systems to measure results (Somers, Hurley, and Oehlmann
2000). Shifting the focus to value and cost effective improvements in health
outcomes should be the ultimate goal of changes in healthcare delivery (Kindig
1997).
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2.5.2 Market Competition
Medicaid managed care enrollment has grown rapidly as has market
interest by non-safety-net providers, including for-profit and niche providers.
Market competition for Medicaid managed care has intensified with increased
penetration of managed care in the commercial market and the presence of for
profit providers (Norton and Lipson 1998). Medicaid managed care enrollments
grew from 12 percent in 1992 to 50 percent in 1999, and the number of MCOs
entering the Medicaid market more than doubled from 100 plans in 1992 to 225 in
1996 (Somers, Hurley, and Oehlmann 2000, 521). Despite low capitation rates,
the growth in MCO participation came mostly from for profit plans interested in
profit from the large numbers of potential new “lives” (Somers, Hurley, and
Oehlmann 2000, 521). In addition, commercial managed care has stimulated a
proliferation of niche providers such as ambulatory surgery centers and disease
management companies that target more profitable lines of service (Fishman and
Bentley 1997).
Non-safety-net hospitals and clinics aggressively pursuing Medicaid
patients for services considered profitable have placed new stress on safety-net
providers in some markets (Baxter and Mechanic 1997). The trend among safety-
net providers seems to be a patient mix that is increasingly non-paying,
increasingly high risk, and thus increasingly more expensive. In one study of
urban safety-net hospitals discharges of uninsured patients increased by 15
percent while Medicaid market share for maternity care primarily low-risk maternity
patients, went down (Fagnani and Tolbert 1999). Medicaid deliveries decreased by
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more than 50 percent, from 25 percent to 12 percent between 1989 and 1994 in
public teaching hospitals, and in urban safety-net hospitals Medicaid births
declined by 36 percent in these hospital's between 1989 and 1996 while other
hospitals in the community experienced an increase from 27 percent to 37 percent
between 1989 and 1994 (Fagnani and Tolbert 1999,21). The loss in market share
of Medicaid deliveries was accompanied by an overall increase in high-risk
Medicaid maternity patients (Gaskin, Hadley, and Freeman 1998). Other studies
have shown that there is less competition for populations that tend to consume
more healthcare resources, such as the disabled or children with special
healthcare needs (Norton and Lipson 1998).
2.5.3 Business-Practice Considerations: Changing
Financial Structures
Historically, the federal money that safety-net providers receive through
Medicaid DSH payments and cost-based reimbursement to FQHCs has tacitly tied
them to caring for both the Medicaid population and the uninsured. As such, the
cost of caring for the uninsured has been offset with Medicaid payments. Medicaid
patients have had limited options for providers. Managed care contracts raise the
question of whether public delivery systems can compete against the private
market to retain their traditional patients by transforming themselves from
providers of last resort to providers of choice (Lipson 1997).
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2.5.3.1 Financial Pressures Limit Cross Subsidization
Growth in managed care and the competition that it stimulates may
ultimately deprive safety-net providers and academic medical centers the financial
support that allows them to care for the uninsured (Biles and Abrams 1998).
Financial pressures to achieve cost savings under managed care may also limit
cross-subsidization of care to the medically indigent, particularly in the Medicaid
dependent safety-net (Cunningham and Ginsburg 2001; Mann et al. 1997). In
addition, competition coming from vast consolidation of health organizations, the
phenomena of national investor-owned provider companies and health plans along
with a greater price sensitivity introduced by managed care contracts could lead to
pressures to reduce the amount of uncompensated care provided to the uninsured
(Mann et al. 1997).
2.5.3.2 Competition—A Two-Edged Sword
Market factors do have an effect on access to care for uninsured persons,
and the increasing dominance of managed care plans may impact healthcare
access for the uninsured (Cunningham and Ginsburg 2001). However, managed
care is often blamed for the results of specific economic, competitive, or
organizational changes arising from chronic under funding of public delivery
systems and the demise of cost shifting (Baxter 1998). But, if newly insured
patients continue to use the same providers they used when they were uninsured,
safety-net providers may benefit from increased revenues and reduced demand
for uncompensated care (Atkinson, Helms, and Needleman 1997). In addition,
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risk-based systems give buyers the ability to shift risk to providers and to create
incentives for prevention, primary care, care coordination, and more cost-
conscious care delivery (Somers, Hurley, and Oehlmann 2000). For this reason
state Medicaid agencies will continue to experiment with models that forego or limit
risk, adjust for risk more accurately, or tie bonus incentives directly to performance
measures and other models to care for special needs populations (Somers,
Hurley, and Oehlmann 2000).
2.6 Care Management
In the United States, for the majority of the population, market mechanisms
impose rationing of healthcare services either through limits on coverage or the
absence of coverage. A market approach to rationing produces inequities in health
services and health outcomes. The methods used to ration, in this case the
“primary care gate-keeping model," are rejected despite their success in containing
cost (Savage et al. 2000, 106). The aging population needs health systems
oriented toward chronic disease offering a continuum of care (Wagner, Austin, and
Von Korff 1996). In addition, the fragmented financing mechanisms in the U.S.
create impediments to reimbursing providers for the continuum of care needed by
the elderly, indigent, and working poor (Savage et al. 2000).
State Medicaid agencies are showing a willingness to invest in gathering
performance-based data to assess the results of their expenditures. One reason
for this is the potential to save money. In a pilot program in Florida, the amount
spent on case management fees and medical care under a disease model
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arrangement is less than the cost under a gatekeeper model (FAHCA 1999).
Other motivations include an emerging recognition that consumers are not getting
the care they pay for and that consumer interest in quality is growing. The
Foundation for Accountability (FAACT) provides the following examples of patients
not getting basic care: (a) 23 percent of teens say their doctor talked to them
about drinking, and only 20 percent say their doctor talked to them about
depression, although 51 percent reported experiencing depression; (b) 35 percent
of parents report that they get their questions answered about breastfeeding,
nutrition, and injury prevention; (c) in the best four health plans, only 54 percent of
patients with diabetes got a basic test; (d) few physicians say they follow practice
guidelines, 17 percent for cancer and 34 percent for hypertension; (e) 41 percent
of asthmatics are seen in the emergency room or in the hospital each year due to
poor ambulatory care; and f) 83 percent of physicians say they prescribe peak flow
meters, and only 28 percent of patients say they actually have one (Lansky 2000,
slide 2). Lansky (2000) also reports that the interest in quality is mounting
because 42 percent of the general public believe they have been the victim of
medical error, 89 percent seek a second opinion, and 86 percent want information
about physician quality (Lansky 2000, slide 6).
The literature holds convincing evidence on the potential of the market to
increase quality, efficiency, and accountability to patients. States with Medicaid
managed care are beginning to experiment with chronic care disease
management models that combine fee-for-service attributes with at-risk managed
care contracts for high-cost, high-volume diseases such as HIV/AIDS, heart
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failure, high-risk pregnancy, asthma, diabetes, and hemophilia. These states
appear to be prepared to “walk the talk of continuous quality improvement”
(Somers, Hurley, and Oehlmann 2000, 534). This next section examines Care
Management as an Intervention—What Is It? How and why is it being used?
What potential benefits does the approach have for safety-net providers or the
uninsured?
2.6.1 Evolution of Care Management
Care management originally evolved from a movement among practitioners
to improve health outcomes by standardizing clinical care. This movement was
driven by a burgeoning awareness that methods of care used by physicians for
similar conditions varied drastically, and that, consequently, health outcomes for
patients with similar conditions might be discrepant as a result of, at least in part,
these diverse provider practices. Health practitioners were not alone in their
interest in quality. The Malcolm Baldrige National Quality Improvement Act of
1987 (U.S. Code 1987) started with American business and industry
understanding “that poor quality costs companies as much as 20 percent of sales
revenues nationally and that improved quality of goods and services goes hand in
hand with improved productivity, lower costs, and increased profitability” (U.S.
Code 1987, Baldrige, paragraph 2). The Baldrige award is now coveted in
healthcare as well.
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2.6.1.1 Total Quality Management
Beginning with Total Quality Management (TQM), also known as
continuous quality improvement (CQI), with these labels often used together or
interchangeably, the search for cost savings while retaining or improving the
quality of care has occupied healthcare providers. Early innovators of
improvement process measures, along the lines embodied in the Malcolm Baldrige
Award, used the Value Improvement Process (VIP), a forerunner of TQM, and
found that pre-operative procedures for hip replacement could be standardized,
care improved, and cost decreased by reducing the length of inpatient hospital
days before and after the procedure if the number of prosthetic device suppliers
were reduced (Gebran 1994).
TQM took American businesses by storm; it offered a unifying business
strategy to achieve and sustain growth by transforming organizations into one
smoothly working, quality focused team, and created a culture of total quality
management (Rowen and Nestlerode 1992). The same forces that motivated the
U.S. manufacturing industry—competition, customer satisfaction, perceived value,
market share and profitability—pushed healthcare organizations foreseeing health
reform on the horizon to adopt TQM (Huq and Martin 2000). Based on W. E.
Deming's fourteen principles of continuous quality improvement (Stockburger
1992) and with the promise of reducing the cost of poor quality (McCabe 1992),
the hospital industry embraced TQM strategies to strengthen their operations, to
improve clinical outcomes, cut costs, boost staff morale, and increase patient
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satisfaction (Lowder, Ingram, and Buser 1993). The application of TQM business
strategies spread rapidly throughout the health industry (Colton 1997).
Success, in terms of cost savings and improved quality, mounted quickly in
the early days of TQM in healthcare. TQM achieved cost savings and improved
quality in reference lab services (Armbruster 1991), and at blood banks (Beesley
et al. 1993). TQM was also used to improve or reduce nosocomial infections on
ventilator-associated pneumonia (Kelleghan et al. 1993), to improve
documentation of treatments and resource use in Emergency Departments (Lakier
1996); to improve discharge planning (Hedges et al. 1999), and to improve the
care in medical inpatient services (Curley, McEachem, and Speroff 1998) and in
orthopedic units (Aronow et al. 1994). However, to start and sustain organizational
adoption of a quality orientation, like TQM, required a top-down commitment and
an overwhelming amount of resources, both time and money (Yasin et al. 1999).
Critics contend that the quality programs of most hospitals have failed because of
operational realities, physician attitudes, staff resistance, and a short-term
orientation of administrators (Yasin et al. 1999) as well as because of poor
implementation (Huq and Martin 2000).
Less onerous alternatives such as the rapid assessment model (RAM), a
strategically driven assessment method emerged offering healthcare organizations
a way to initiate a TQM service quality orientation incrementally (Yasin et al. 1999).
Impressed with their potential, the Joint Commission for Accreditation of
Health Organizations adopted standards to encourage hospitals to use TQM/CQI
or similar approaches to improve performance (McCabe 1992). Hospitals
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embraced TQM/CQI strategies to strengthen their operations, improve quality and
clinical outcomes, as well as to decrease length of hospital stays (Curley,
McEachem, and Speroff 1998; Cigich and Mischler 1996), and to achieve overall
system cost savings (Armbruster 1991). Because TQM/CQI emphasizes
democracy and teamwork and focuses attention on making steady quality
improvements and keeping customers happy (Huq and Martin 2000), these efforts
were found to increase patient satisfaction (Padderatz 1999), to lead to greater
provider satisfaction (Spoon et al. 1996), boost staff morale (Lowder, Ingram, and
Buser 1993), and to have a positive impact on human resource development
(Barsness and Shorten 1993). Quality circles, a technique for quality
improvement, were used to meet the socialization and self-actualization needs of
employees, to increase employee morale and productivity, and to decrease
employee turnover rates (Farley and Hogan 1990). For some, TQM/CQI is seen
as the best way, in today's environment, to stimulate or enhance collaboration
between MCOs and healthcare providers (Savage et al. 2000).
2.6.1.2 Reengineering and Benchmarks
TQM/CQI tools such as reengineering and benchmarks were used to
redesign business processes in health organizations and to increase productivity
and quality while lowering cost. To enable skilled employees to perform their job
functions more efficiently, work processes are reengineered, often with the support
of computers and communication technology (Cigich and Mischler 1996). To
enhance the process of care, work processes are analyzed and modified to
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develop a best practice approach using worker feedback and process-owning
teams (McLaughlin and Kaluzny 2000). Like TQM, the success of reengineering is
determined by its implementation (McCabe 1992). The goal of reengineering is to
design care delivery so that the right people are in the right positions, with the right
amount of committed resources, technically supported to have access to the right
information to offer the best, most cost effective care (Rosenstein 1999). Whereas
reengineering is a business process approach, clinical process enhancement is
often called clinical quality improvement, evidence-based medicine, outcomes
management, and/or disease management (McLaughlin and Kaluzny 2000). With
process improvement and reengineering, performance indicators or milestones are
used to gauge success or progress toward desired changes. As a result,
benchmarks for clinical requirements as well as financial and administrative factors
were developed to enable comparison of actual results to expected results (Wu
and Johansen 1999). Reengineering and other care management interventions,
such as case management, are distinct but interdependent strategies for improving
productivity, efficiency and quality of care (Karr 1997; Lakier 1996; Sharp 1994;
Sharp 1995).
2.6.1.3 Clinical Guidelines and Pathways
Aware of how quality assurance activities and cost containment are related,
hospital workers looking for better quality outcomes for patients and ways to
reduce risk factors began to emerge (Kerrigan 1995). Experienced in developing
programs that demonstrated savings through improved quality, hospital workers
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began to put attention on the development of clinical pathways to reduce hospital
lengths of stay and contain costs (Velasco et al. 1996; Sharp 1994; Sharp 1995;
Naylor et al 1999). Clinical pathways are a form of modularization in which the
organization develops a series of modular approaches (based on the needs of a
target population) to early intervention, prevention, and care that can be deployed
efficiently in response to patient needs (McLaughlin and Kaluzny 2000). At the
high end are the centers of excellence and focus factories that are equivalents to
mass production in healthcare (McLaughlin and Kaluzny 2000).
One of the early areas of focus for clinical pathways was on populations
with chronic conditions because of the deficiencies in the delivery of routine care
that was resulting in avoidable use of resources or preventable outcomes for these
patients. Deficiencies included (a) delays in the detection of complications or
declines in health status because of irregular or incomplete assessments or
inadequate follow-up, (b) failures in self-management of the illness or risk factors
because of patient passivity or ignorance resulting from inadequate or inconsistent
patient assessment, education, motivation, and feedback, (c) reduced quality of
care because of omission of effective interventions or commission of ineffective
ones, and (d) undetected or inadequately managed psychosocial distress
(Wagner, Austin, and Von Korff 1996, 14). The best pathways are those that deal
with patient variability in problem constellations, anatomy, physiology, and
preferences as well as provider variability in terms of skills and preferences
(McLaughlin and Kaluzny 2000).
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Over time the principles of CQI were applied to streamline and standardize
the development of clinical pathways (Perez 1996; Schriefer 1994). These efforts
became precursors to disease management and a cottage industry with 170
disease management companies (Dalzell 2000) focused on the care of
populations with targeted diseases.
2.6.1.3.1 Disease Management
Changes leading to the “industrialization of health” have impacted how care
is organized, how professionals are motivated and incentivized, and the way that
risks are allocated (McLaughlin and Kaluzny 2000, 74). Population-based care,
such as the disease management model, involves the development and
implementation of a plan for the care of all patients with common clinical needs.
Because of limitations in medical practice, providers are unable to meet the
educational, behavioral, and psychosocial needs of patients with complex or
chronic conditions (Orleans 1985). In recognition of these limitations, pathways
are developed into protocols or plans specifying what needs to be done for
patients, at what intervals, and by whom to manage diseases across a spectrum of
clinical services (Wagner, Austin, and Von Korff 1996). This planning begins with
(a) the definition of the subpopulation of interest (patients with diabetes, elderly
patients, homeless, etc.); (b) development of clinical policies or guidelines based
on the literature of the assessment, treatments, and services shown to improve
outcomes in this target group; (c) adoption of the guidelines and implementation of
support structures required to provide optimal care; and (d) quality circles or team
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meetings with key staff responsible for components at different junctures of the
care pathway using the principles of CQI to change practice styles (Wagner,
Austin, and Von Korff 1996).
McLaughlin and Kaluzny (2000) identified three distinct patient groups
which when combined account for one-third of healthcare spending:
1. Acute—non-hospital. (Ninety percent of all patients) These are
individuals with acute, resolvable illnesses that do not require
hospitalization, such as minor injuries, infectious diseases, and chronic
illness as well as the worried well.
2. Medical/surgical. (Nine percent of all patients) Individuals with well-
controlled chronic diseases, normal childbirth, and elective surgery for
athletic injuries, generating claims of less than $7,000 per year.
3. Catastrophic illnesses. (One percent, such as those with AIDS,
hemophilia, and cancer) (McLaughlin and Kaluzny 2000, 80).
Preauthorization and utilization monitoring programs work effectively with
the first group; however, process improvement can also be used to rationalize the
enrollment process, provider assignment and orientation to the delivery network
and systems, how to access services and care components such as the first visit,
initial assessment and care planning (McLaughlin and Kaluzny 2000). More
comprehensive approaches such as disease management programs are
appropriate for the second and third group (NAPHHS 1999b). However, a
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limitation of disease management programs is that they are often constructed as if
patients have only one disease and focus on medical needs only. For this reason,
disease management programs may not work as well for the very sick or
especially the elderly with multiple diagnoses and social and behavioral issues that
affect their medical conditions (McLaughlin and Kaluzny 2000).
Patient-centered systems of care that include CQI and a variety of
interventions and models under the broad umbrella of care management are a
natural outgrowth of disease management programs. Patient-centered care
places the medical, psychosocial, financial, and spiritual needs of the patient at the
center of care delivery. This approach seeks to understand explicit and implicit
patient needs, to be supportive of behavior change, to use effective provider
feedback loops to support patient compliance with the treatment plan, and to use a
“negotiated" style of care-giving with the patient and family (Osmick and Varner
1999, 2-1).
2.6.1.4.2 Barriers to Change
Guidelines imply planned care and require providers to practice medical
care in a radically different way. Clinical guidelines and pathways require
providers trained to think and focus on individual patients, to shift their attention to
thinking about all patients with the same medical needs, as a group, and how
those needs can be met systematically based on what is known to be effective for
that condition. Despite availability of guidelines, protocols and evidence-based
recommendations for care by nearly all professional provider organizations, such
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as the American Academy of Pediatrics, American College of Physician and
Surgeons, etc. (Grimshaw and Russell 1993; James 1993), physicians are
resistant to using clinical guidelines, even those known to be effective (Diamond
1998). One reason may be that guidelines require health delivery system changes
as well as individual practitioner behavior change (Wagner, Austin, and Von Korff
1996). Health delivery organizations need to have the necessary resources and
policies in place to support a different way of practicing at the level of individual
practice (Wagner, Austin, and Von Korff 1996).
Another reason may be that there are over 1,800 medical practice
guidelines. As a result, guidelines have become ubiquitous and their cost and
benefits to quality have mixed reviews (Citrome 1998). Some claim that resistance
may also be due to the failure to include practicing physicians in guideline
development and that guidelines are seen as intrusive directives placed upon
physicians by health plans. This problem is compounded when physicians
participating in multiple health plan networks are faced with the demand to work
with multiple and different clinical pathways for the same condition. This lack of
consistency results in a loss of credibility, confusion, and unnecessary burden
(Diamond 1998).
Fee-for-service medicine lacks incentives to coordinate patient services
between sites of care and to coordinate medical and social services for patients
with both medical and socioeconomic factors contributing to health conditions
(Karr 1997, Weiss 1998). In contrast, the economics of managed care and market
incentives create a climate where standardizing care and practicing more
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effectively are rewarded (Boex, Cooksey, and Inui 1998). These financial
incentives motivate MCOs to aggregate physicians into groups and to implement
clinical guidelines to standardize care and achieve efficiencies. The concentration
of provider practices with sufficient scale to be supported by organization and
problem solving capacity may, over the long term, provide the “backbone" for a
transfer of knowledge among physicians and more ready acceptance of clinical
guidelines (Coye 2000, 5). One indication of the power of financial incentives is
that staff and exclusive group models that benefit directly from investments in
changing physician patterns are having more success with initiatives for clinical
change (Enthoven and Vorhaus 1997). But some argue that for the largest
number of health organizations real incentives do not exist, and as a result, CQI
remains a tactic, not a core business strategy (Coye 2000).
2.6.2 Elements of Care Management
Care management is a systematic population-based approach to care
delivery—in contrast to episodic, individual-based care—with the goal to reduce
cost and to improve health status overall by reducing disparities in access and
improving the quality of care. The National Chronic Care Consortium, dedicated to
improving the way care is provided to patients with chronic conditions, has
identified the following as key elements for integrated care management: (a)
providing person-centered care, (b) emphasizing disability prevention, (c)
integrating a full array of services, (d) targeting high-risk populations, and (e) using
interdisciplinary care teams and related tools and processes (NCCC 1995, 2).
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2.6.2.1 Providing Person-Centered Care
Providing person-centered care begins with an understanding that there
are many opportunities to influence health outcomes and recognizes the patient as
the primary care manager, thereby promoting patient choice, education, and
participation in the care process. A holistic view o f the patient recognizes that
many aspects of a patient’s life affect health, all at once and over time, and these
factors should be considered in all stages of care. Implementing care management
programs can lead to thoughtful redesigns of service delivery that maximize the
opportunity to influence health outcomes and support providers to give optimal
care.
2.6.2.2 Emphasizing Disability Prevention
Preventing, delaying, or minimizing the progression of disability is a critical
function of integrated care management. The Institute of Medicine views disability
as progressing through four stages: pathology, impairment, functional limitation,
and disability. At each of these stages, there are risk factors that affect the degree
of disability. Therefore, providers and patients can work to avoid, delay, and
lessen the disability arising from the condition. There are three levels of
prevention that can be directed at a disease: (a) Primary Prevention, which
focuses on avoiding the condition, educating patients about healthy behaviors; ( b)
Secondary Prevention, which works to slow the rate of decline and avoid disability,
ensuring that patients understand their disease and are able to self-manage their
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care; and (c) Tertiary Prevention, which seeks to avoid complications and
maximize function and quality of life.
2.6.2.3 Integrating a Full Array of Services
Care management integrates a full and flexible array of services where
patients can access services across settings with minimal disruption in the course
of care. Because care is delivered at specific sites with defined capabilities, care
management calls for a coordinating element that can follow the patient across
settings so that duplications and gaps in care are minimized. For this reason,
some form of case management is a basic strategy for most care management
programs.
2.6.2.4 Targeting High-Risk Populations
Often patients with a high risk of disability progression and high-cost care
are the focus of care management because they represent opportunities for
making real differences in outcomes, in system costs, or in both. Therefore, both
specific and comprehensive risk assessment tools are important to providing
quality and cost-effective service. After a patient’s risks have been identified, a
variety of methods is used to address the individual needs of the patient and,
therefore, to prevent disabilities. These methods include specific disease or
clinical care guidelines and pathways or protocols, interdisciplinary care teams
with expert knowledge on the condition, information and financing systems that
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provide data on outcomes and costs, and educational materials for patient self-
care and self-management.
Target populations for care management might be defined by clinical
conditions (e.g., diabetes), health seeking behaviors (e.g., using the emergency
room), insurance status (e.g., Medicaid, uninsured), and/or other social risk factors
(e.g., isolated elderly, homelessness, pregnant teens).
2.6.2.5 Interdisciplinary Care Teams, Tools, and Processes
An interdisciplinary team and guidelines are components of enhancing care
coordination across time and setting. As mentioned, many aspects of a patient’s
life affect health, and no one profession encompasses the background to meet all
of the patient’s needs. Having various disciplines work together ensures that
requirements placed on patients throughout the system are recognized in
planning. Care pathways or protocols, tools used by care teams, are often
techniques for integrating the management of a patient's condition because they
provide guidelines that address specific conditions over time and across service
settings.
Care management strategies require organizations to build a caring system
that sees patients within their social, economic, and behavioral contexts. Success
is based on looking beyond the specific disease process to ensure that the myriad
needs of both the patient and the family, whether medical, personal, social, or
otherwise are met. Therefore, a multidisciplinary team is important to facilitate this
broad focus on the patient and ensure that tools and processes are in place.
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2.6.3 Types of Interventions and Programs
Care management encompasses various models and interventions, such
as disease management, case management, utilization management, evidence-
based medical and psychosocial approaches, clinical guidelines and pathways,
and patient education. These models use the elements of care management
described above to varied degrees and are applied to populations with medical
conditions as well as with social and behavioral risk factors. In addition,
reengineering efforts produced a number of contemporary management models,
interventions, and tactics, such as patient-focused care, case management,
patient registries, 24-hour call centers, and product or program management that
fall under the broader rubric of care management (Carmichael 1994). For this
reason care management programs vary in foci, size, and scope, and they tend to
reflect the organizational structures and delivery capacities that exist in the
implementation environment as well as in response to the target population. As
result, as depicted in Table 2-1 (Care Management Interventions), a wide array of
interventions have emerged under the banner of care management. In general,
care management programs include common components, such as the following:
1. Intervention or tools such as clinical protocols or pathways and
patient registries that systematically standardize care, identify
opportunities for prevention or early intervention, or serve to prompt
practitioners to proactively anticipate care needs.
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2. Intervention or tools that teach patients how to better manage their
health condition and deal with the social, emotional, behavioral, and
health needs. Examples are patient education, self-management
training through individualized instruction, and free classes
“prescribed”4 by a physician taught by healthcare professional,
para-professionals, or through written materials.
3. Outreach interventions requiring providers to reach out to patients
in their home setting through telephone or home visits to assess
social or clinical risks, to identify opportunities for prevention or
early intervention, and to provide population-based care. Case
management or mentoring programs can be used to offer ongoing
support and guidance in self-care and to assure timely and
appropriate access to care.
4. Population-based health education and prevention programs to
identify health risks early, modify or change unhealthy behaviors
and practices, and tertiary prevention programs to identify training
and care needs and to address barriers to self-management.
4
Prescribed in quotes is used to emphasize the importance of a physician ordering patient education
instruction to impress on patients that this is part of their treatment.
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5. Administrative tools, such as tailored statistical reports of patient
care activity or claims data that provide practitioners information
about utilization patterns or patient outcomes.
Table 2-1
Care Management Interventions
Description and Attributes Focus
Utilization Review/Control
Concurrent or retrospective reviews of inpatient
hospital or ancillary care (e.g., rehab., surgical
procedures and lengths of stay)
Providers. Reduce spending by paying for
only those services deemed clinically
appropriate based on standardized severity
of illness
Preadmission Authorization
Authorization control system designed to deal
with over utilization
Pre Care. Patients that need specialty
care/elective hospital care
Clinical Components
Clinical Guidelines/ Disease Protocols Care Team. Evidence-based pathways
Risk Identification Patient. Assessment of risk factors, medical
and social. May involve home visits
Compliance Monitoring
Provider Education
Information sharing/physician education about
value of cost effective care
Providers. Increase understanding of care
alternatives and patient outcomes and cost
implications
Provider Decision Support
Via computers or other means Provider. Using computers to provide timely
patient or performance information
Incentives (financial or other) Provider. Reward system
Table continues next page
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Table 2-1 (Continued)
Care Management Interventions
Description and Attributes Focus
Patient Centered Care for Catastrophic
Illness
Replaces site-centered care; brings
information to the patient and local
clinical care team customized to each
patient
Continuum of care. Healthcare team is organized to
coordinate care; case manager used to help patient
with treatment choices
Patient Centered Care for Non-
Catastrophic Illness
Physician must motivate behavioral
change on the part of the patient; may
include disease management
processes; clinical guidelines.
Supported by information technology.
Standard CQI approach can be applied
Nature of the physician/patient relationship.
Standardized approach because variability is less
likely to be induced by co morbidity or the
seriousness of the illness
General Acute/Routine Preventable
High volume, low cost per episode,
sensitive to co-payments and
deductibles
Process rationalization for enrollment and primary
care provider assignments; orientation to system and
services; first visit; initial assessment and care
planning
Patient Education
Training— Behavioral Change and Self-
Management
Patient. Provide education on the disease process
and self-management
Secondary Prevention Programs Patients. Health promotions campaigns
Patient Support
Psycho-social Support Patient. Nurse/Social Worker or other team member
identifies and attends to social and emotional issues
Transportation Patient. Enabling service
Interpreter Services Patient. Enabling service
Linking to Social Services Patient. Enabling service
Table continues next page
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Table 2-1 (Continued)
Care Management Interventions
Description and Attributes Focus
Primary Prevention
Outreach Education Population-based. Health communication
message for behavior change
Patient Satisfaction
Patient Satisfaction Survey Patient. Feedback about performance
Case Management
Multidisciplinary, community-based
services to increase appropriate use of
health and social services
Attention to both medical and social needs of
patients within the context of family and community
Ancillary resource management, use of
formulary and inventory control
Nursing, Respiratory Care, Pharmacy. To improve
efficiency in use of ancillary resources—opportunity
to reinforce appropriate decision making at the time
of care
Gate Keeper for MCO Primary care providers. Responsible to coordinate
and authorize all of the care needed by patients
Community-based case management to
assess patients needs, refer patients to
appropriate services and advocate for
patients to assure access to care
Social workers, nurses or community health aides
Disease Management
Direct care programs offered by
established providers and treatment
protocols for individuals with specific
disease or set of symptoms
Disease/condition specific populations
Sen/ices offered by a disease
management company under a risk-
bearing insurance contract under specified
terms and conditions
Manage risk for defined population paid for under
the contract
Services offered by a hospital or
community clinic as part of care delivery
Manage or reduce cost of care for patients seeking
care
Source: Aliotta 1996; Cigich and Mischler 1996; Issel and Anderson 1999; Lipson 1997; NAPHHS
1999b; Rosenstein 1999; Schore, Brown and Cheh 1999.
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2.6.4 Cost Savings
The value of care management interventions, such as clinical guidelines, is
their purported capacity to achieve favorable clinical and economic outcomes.
Despite optimism about the cost saving potential of many care management
interventions and improvement efforts, the interventions may be cost-effective
without actually saving costs (Wu and Johansen 1999). For this reason,
measuring cost savings needs to include both hard cost and soft cost savings.
Soft savings are usually not real in the sense that overall hospital expenses will
probably not be reduced as a result of implementing change. Savings achieved
through cost avoidance or prevention is examples of soft cost savings. Hard
savings, on the other hand, are real dollar savings that increase a provider’s profits
as a result of reduced expenses from the intervention used (Holzman 1991,17S).
In addition, these care management interventions and improvement
programs add cost to the system (Rosenstein 1999; Schore, Brown and Cheh
1999). However, return on investment can materialize in different ways. For
example, major players such as the Cleveland Clinic and the Mayo Clinic have
experienced growth in new markets and services, lower operating costs, and
higher service quality as well as increased customer satisfaction when they
adopted a quality orientation in response to increased consumer sophistication
(Yasin etal. 1999,47).
The literature shows convincing evidence that care management
interventions result in improved quality and cost savings. Clinical pathways, as
part of larger disease management efforts, were shown to decrease the length of
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hospital stays and to reduce the total cost of treatment for child asthmatics (Kelly
et al. 2000; Mazur, Miller, Fox et al. 1996; Ross, Togger and Desjardins 1998),
adult asthmatics (Jowers et al. 2000); (McFadden and Elsanadi 1995), cystic
fibrosis (Kretz and Pantos 1996), upper respiratory infections (Joiner, Salisbury,
and Bollin 1996; Rohrbach 1999; Ross and Johnson 1997), cancer (Kolb 2000)
and diabetes (Sheils et al. 1997).
The use of teams has also been found to result in savings. Two, well
designed studies documented savings with the use of teams; an asthma team
reported a two-year, 40-percent reduction in admissions among 4,000 patients
with asthma, while a team working with low back pain reported a two-year, 35-
percent drop in spine surgery (Dalzell 2000,1).
Other studies demonstrate that case management (self-management and
education programs in asthma care are cost-effective for both child and adult
populations, producing savings from reductions in hospital admissions (Ross,
Togger and Desjardins 1998) and lost income (Liljas and Lahdensuo 1977; Taitel
et al. 1995). In the end, real-time interventions that prevent unwanted events from
occurring have the greatest potential for producing cost savings (Rosenstein and
Propotnik 1997). With most studies emphasizing cost savings and care process,
critics point to the need to go beyond financial and utilization outcomes to measure
patient outcomes (Perez 1996).
Most cost savings come from reduced length of hospital stay (Anderson-
Loftin, Wood and Whitfield 1995; Bemd 1992; Curley, McEachem, and Speroff
1998; Doran, Henry, and Anderson 1998; Gonzalez, and Smith 1998; Goldberg et
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al. 1998; Jungkind and Shaffer 1996; Koch et al. 1994; Shrier et al. 2000;
Patterson, Whitley, and Porter 1997; Velasco et al. 1996; Wammack and Mabrey
1998) and emergency department use (Evans et al. 1999; Greineder, Loane, and
Parks 1995; Rollins, Thomasson, and Sperry 1994; Wrenn and Rice 1994) or
redirecting patients to other less costly care locations, such as nonspecialized
hospital units (Lakier 1996), outpatient settings (Gould et al. 1999; Koch et al.
1995; Fairchild et al. 1998; McGovern 1998) or home care (Heam et al 2000;
O'Brien etal. 1999).
Reengineering efforts also result in cost savings with the reduction of staff
(Bergler, Reis, and Hormann 1997; Taylor 1997) and a more efficient organization
(Wurster and Koch 1995; Numerof and Abrams 1998; Amdt and Bigelow 1999) as
well as restructuring the care delivery team by using non-physicians to case
manage patients (Anderson-Loftin, Wood, and Whitfield 1995), or non-RN
personnel for tasks such as medication administration (Burruss, Ashworth, and
Arikian 1993). Multidisciplinary teams (Cooper et al. 2000; Curley, McEachem,
and Speroff 1998) or collaborative problem solving teams that include patients
(Jowers et al. 2000) or suppliers (Eavy and Conlon 1993) are also used to reduce
the cost of care.
Clinical pathways contribute to cost savings by achieving clinical resource
efficiency without major changes in staffing operations (Devaraj and Kohli 2000;
Kazzaz et al. 1997; Sharp 1995), with comprehensive population management
programs (Ketner 1999) as well as with lower rates of preventable complications
(Finley et al. 1999; Lakier 1996; Assal 1995; Brown and Smith 1993) and
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pharmacy management of medication usage (Dager et al. 2000; Foulke and
Siepler 1990; Finley et al. 1999). Cost avoidance, which means prudent use of
limited resources to enable other procedures to be performed, in contrast to direct
cost savings, is possible with the elimination of unnecessary procedures or
investigations and operations, (Brown and Coghill 1992; Hatoum, Witte and
Hutchinson 1992; Jacobs et al. 2000; Newby and Califf 1996; Peters, Cowley and
Standiford 1999; Taitel et al 1995; Wickizer, Lessler and Franklin 1999), with
reduced occurrence or readmissions (Jewell 1994; Lancellot 1996; Schriefer 1994;
Peters et al. 2000) or with less costly drug use (Hatoum, Witte, and Hutchinson
1992) as well as with coordinated and managed care (Kretz and Pantos 1996;
Shiell, Kenny, and Famworth 1993) or with decreased complications, such as
hospital acquired infections (Rogowski et al. 2001). Cost savings are also
reported with the application of computers, such as with the automation of ICU
documentation systems (Buttler and Bender 1999) or the use of clinically oriented
information systems, which allow patients to be tracked more efficiently (Cassidy
1993).
2.6.4.1 High Program and Administrative Costs
However, good care requires program expenditures. For example, the
prevention and management of a diabetic foot ailment requires a multidisciplinary
approach of regular monitoring of feet and footwear, patient education and
awareness about preventive foot care, continuous follow-up of high-risk feet, and
early recognition of revascularization (Apelqvist et al. 1999). Although one study
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demonstrated that this approach has reduced the incidence of low leg amputations
by 50 percent, this intervention, similar to other quality oriented interventions,
requires staff training, adds time to the patient encounter, and includes more
professionals in the care of diabetes. Intensive case management is another
example of the need to invest in additional program and administrative resources
in order to achieve cost savings (Schore, Brown and Cheh 1999). Although both
clinically and financially effective, intensive case management is expensive
because it requires intensive management time and technical sophistication, and
to be cost effective, providers must identify patients who are most likely to exceed
a threshold cost and will benefit from intensive services (Collins and Moore 1997).
Unfortunately many care management interventions are implemented without a
clear strategy for cost savings opportunities (Devaraj and Kohli 2000; Sharp 1995).
2.6.4.2 Limitations In Documenting Cost Savings
Although today’s technology offers the best means to share information
between healthcare providers, buyers and suppliers, implementing evidence-
based best practices requires onerous information gathering and analysis (Savage
et al. 2000). In addition, one of the greatest challenges is assessing the costs and
benefits and documenting the savings from care management interventions. This
challenge is due to the difficulty in gathering the necessary data from
administrative sources and the expense of using chart reviews which can provide
the data needed, such as cost, time, clinical resources, and patient satisfaction,
but are costly and time consuming (Hospital Case Management 1999, 65). Many
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studies fail to include economic reference values; as a result, few are able to
demonstrate the indirect aspects of costs and savings because study periods are
too short and more precise and strict methods for quantifying costs are needed
(Jarlier and Charvet-Protat 2000).
Accurate measures and access to reliable health information are important
for all providers today. It is also costly and difficult to manage when data reside
within independent organizational subunits (Currie 1998). Failure to document
savings is also the result of an inability to develop a collegial atmosphere, the
absence of consensus around clinical practice and cost linkages, and the lack of
detailed cost information (Lee 1995). In addition, many studies report difficulties
obtaining complete data for cases and a resistance among investigators to obtain
the additional data needed for cost analysis (Amdt and Bigelow 1999; Jadad
2000). For this reason, time and motion studies as well as actual and anecdotal
information are used to reach some preliminary conclusions about these cost
saving efforts (Bingham 1997).
As hospitals experience increased lengths of stay, some experts believe
that this is an indication that traditional utilization review has outlived its
usefulness, and more effective cost-containment efforts are needed (Hospital
Case Management 1999).
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2.6.5 Business-Practice Considerations: Care Management
2.6.5.1 Standardize Care
Care management has emerged from a growing awareness that methods
of care by physicians vary drastically, even when treating the same conditions. As
a result, the health outcomes for patients also differ. As TQM/CQI strategies are
applied in health organizations, healthcare workers have adopted the values of
democracy and teamwork and a focus on quality, particularly hospital workers and
oversight agencies such as Joint Commission for the Accreditation of Health
Organizations and National Council of Quality Assurance.
2.6.5.2 Quality and Cost Containment Are Related
Clinical guidelines and pathways have grown out of an understanding that
quality assurance activities and cost containment are related and that providers
are not able to meet the educational, behavioral, and psychosocial needs of
patients with complex or chronic conditions. Pathways enable healthcare workers
to avoid deficiencies in the delivery of routine care and to prevent the use of
unnecessary resources or preventable outcomes. These efforts have been
successful in reducing hospital lengths of stay and Emergency department use as
well as in avoiding unnecessary staff or expenditures of resources. Some
providers using care management have experienced growth in new markets and
services, lower operating costs, and improved customer and employee
satisfaction.
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Most studies reporting cost savings for targeted efforts focused on cost
avoidance or cost reductions through efficiencies of clinical resources, redirecting
patients to less costly care or settings, and by eliminating unnecessary
procedures. More comprehensive efforts across a continuum of services have
experienced problems in documenting savings and the need to add new staff or
new processes and cost, particularly administrative cost. However, in some
cases, improvements in quality and deterrence of advance disease through patient
education and awareness are impressive (Apelqvist et al. 1999). These findings
are supported by a growing movement among the chronically ill to reclaim their
role as primary caregiver, working in partnership with their physician; placing
increased emphasis on patient education to self-management (NCCC 1995;
Wagner et al. 1999). In an era of cost control and narrow margins, self
management strategies enable safety-net providers to meet growing demand with
fixed or declining budgets.
2.7 Chapter Summary/Preview
This chapter reviews the healthcare literature in four areas: (a) the
uninsured, (b) safety-net providers, (c) the changing financial structures in the
healthcare industry including managed care and market competition, and (d) care
management as a service delivery approach with a focus on business-practice
considerations. The extensive review sheds light on the complexities of the
business case and serves as the evidence base from which to identify drivers and
incentives that may contribute to safety-net provider decisions to use care
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management for the uninsured. In the next chapter, the research methods to
achieve the data sources used to conduct a Content Analysis and the approach
taken for the business case analysis are discussed.
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Chapter 3
M ethodology
3.1 Introduction
Safety-net providers are using care management for the uninsured. The
purpose of this study is to leam why financially strapped safety-net providers
would incur additional cost to serve the uninsured and to develop a theoretical
business case that can be used to understand how access to care for the
uninsured can be preserved in a managed care environment. Through an iterative
process using a force field analysis and a Content Analysis the business case
hypothesized for the study is refined.
In the force field analysis the literature review presented in Chapter 2 and
the experience of this writer as a safety-net hospital administrator and public
health official responsible for indigent health and public health is used to analyze
the organizational and environmental context of safety-net providers to identify
forces that push or move these organizations toward use of care management for
the uninsured. The force field analysis culminates with a Force Field Model
theorizing conditions or influencing forces in the safety-net organization that
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support care management for the uninsured. The force field analysis is the subject
of Chapter 4.
The Content Analysis is used to learn whether safety-net providers
considered the forces or conditions theorized in the Force Field Model in their
decisions to implement care management programs for the uninsured.
This chapter reviews Content Analysis as a research method and the
methodology to gather the data for the content analysis. Data sources for the
Content Analysis include interviews with national experts on care management
and safety-net providers with care management programs for the uninsured. The
results of the Content Analysis are discussed in Chapter 5. A synthesis of the
force field analysis and the Content Analysis serves as the basis for the final
chapter discussing the business case analysis.
3.2 Content Analysis Reviewed
Content Analysis is a method of research to understand the content of
communication messages, the producers of messages and the effects of the
content on receivers (Rubin et al. 1990) such as in advertising (Berelson 1971)
and health education (Duncan 1989). This research method has also been found
useful to understand human behavior (Budd et al. 1967) and with computer-based
analysis (Soloman 1992). Research using Content Analysis goes beyond
traditional methods of examining only frequency distributions of themes and
categories in texts; applying this technique to analyze different media for diverse
purposes. For example, Content Analysis is used to analyze consumer magazines
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for health promotion impacts of food, beverage, and nutrition advertisements (Pratt
and Pratt 1995), television news coverage to examine how local TV news
influence public perceptions of events and issues (Bernstein and Lacy 1992),
verbal behavior to measure psychological dimensions of children and adults
(Gottschalk-Gleser 1995), and to recreate a mental model of the psychology of an
individual (O'Dell and Weideman1993).
Content Analysis is a multistage process that focuses on the analysis of
concepts and their frequency in texts for both content and textual analysis (Carley
1993; Roberts 1997). The most common form of Content Analysis is thematic
analysis to capture information about frequencies and distributions of themes
within texts. The semantic and network approach are two other methods of
Content Analysis used to produce information about the relationships between
themes. The former uses semantic structures to identify themes within texts and
the latter groupings (Roberts 1997).
Content Analysis involves the systematic and objective classification of text
into a set of categories that represent the presence, frequency, intensity, or nature
of selected characteristics. The data can then be analyzed for intention and
meaning to describe and quantify specific phenomena (Downe-Wamboldt 1992).
The limitations of Content Analysis include problems with the classification of
objects or stimuli of interest or assigning words to categories (Kang et al.1993) and
identifying relationships between words (Roberts 1998). The approach also
assumes that words and sentences capture meaning.
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In this analysis interview notes taken during telephone interviews and
during site visits are analyzed. The analysis consists of counting the frequency
with which concepts defined as driving forces are mentioned and recorded in the
interview notes.
3.3 Data Sources for Content Analysis
The data sources for the Content Analysis include these components of the
RWJ study: (a) fourteen Case Management Subject Experts (CMSE) interviews,
(b) twenty-two Study Site telephone surveys of safety-net providers with care
management programs for the uninsured, and (c) six Case Studies of study
participants.
The fourteen CMSE interviews are with leading researchers and
practitioners across the country; these individuals are recognized in the literature
as experts in care management, chronic disease, or the uninsured as a population,
or because they are involved with organizations established to promote care
management or to work with safety-net providers. CMSEs were also asked to help
identify potential study participants, safety-net providers thought to be using care
management for the uninsured. Ninety organizations were identified by the
CMSEs in these interviews.
From the pool of safety-net providers that potentially met the study criteria,
twenty-two were selected for a telephone survey to learn the reasons why safety-
net providers are using care management for the uninsured. Six of the programs
surveyed were chosen for site visits to better understand how the programs work
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and to study how these organizations benefit from using care management for the
uninsured.
3.2.1 CMSE Interviews
To identify CMSEs, the literature and websites were searched for potential
informants on chronic care or care management organizations, those with a focus
on healthcare quality or those conducting research in quality, chronic care or care
management. Chronic care and quality were selected as search criteria because
care management frequently takes the form of care pathways designed for
evidence-based clinical guidelines (Franklin et al. 1990; Clare et al. 1995). Clinical
guidelines are prominent for populations with chronic diseases, such as diabetes
(Sharp 1994; Grayson 1997; Svensk 1996), hypertension (Latts 1999), and
asthma (Bames, Jonsson, and Klim 1996) and are used to standardize care and
improve quality (James 1993; Lakier 1996). Organizations dedicated to working
with safety-net providers and researchers concerned with the uninsured, such as
Alpha Center and Communities in Charge, associations such as the National
Association of Public Health Hospitals and the National Association of Community
Health Centers, and organizations such as the Institute for Healthcare
Improvement, the Center for Health Studies at Group Health Cooperative, and the
Chronic Care Consortium were targeted in the search.
Identified were fourteen researchers, policymakers, and providers from
across the country who were working with safety-net providers as well as
individuals that were supporting the adoption of quality or care management
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programs in safety-net organizations and who were willing to participate in a one-
hour telephone interview. The CMSEs interviewed are listed in Appendix A: List of
Care Management Subject Experts.
Telephone interviews were conducted between May 19 and June 5, 2000,
using a structured interview guide with seven basic questions and a series of sub
questions. A two-member interview team, consisting of the writer and a research
assistant who took notes during the interviews, conducted most of the interviews.
Interview notes were prepared by the research assistant and reviewed by the
writer to ensure accuracy and consistency.
The interviews began with a brief overview of the study, the study
hypothesis, and the purpose of the interview, which was to leam about the current
state of care management and to identify safety-net providers who may be using
care management for the uninsured. With a focus on the uninsured, care
management or safety-net organizations, CMSEs were asked to comment on (a)
research they were conducting or that they were aware of, (b) research or
personal experience related to safety-net providers and protective strategies due
to Medicaid managed care contracting, (c) research underway on care
management for the uninsured, (d) the definition of a safety-net organization, (e)
what healthcare executives would need to know before adopting care
management for the uninsured, (f) how prevalent they thought these programs
were, the incentives organizations have for developing care management
programs for the uninsured and what their opinion was based on—intuitive belief,
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or research, and (g) to provide the names of organizations that potentially had care
management programs for the uninsured.
3.2.2 Survey Sites
3.2.2.1 Selection of Survey Sites
The CMSE interview identified ninety sites as potential project participants.
The sites included programs sponsored by a variety of safety-net organizations,
such as integrated delivery systems, community health clinics, grant-funded
programs, disease clinics, health plans, and financing programs for the uninsured.
Using a six-question screening tool, 20-30 minute telephone calls were
made to 75 of the 90 organizations suspected to have care management programs
to select sites for further study. Incomplete identifying or contact information
precluded contacting all 90 identified organizations. The screening tool asked for
verification that the 75 organizations contacted had care management programs, a
description of the programs, and the populations served; the demographics of the
populations (age, ethnicity, uninsured), the percentage of uninsured served and
chronic conditions most frequently served as well as how each program was
funded and sources of program funding. Using a yes or no check list (see Table 3-
1: Screening Tool—Care Management) interviewees were asked whether the
care management program had the following; (a) clinical foci, (b) patient education
and support programs to help patients understand and manage their condition, (c)
data analysis and profiling, (d) utilization and cost tracking, and (e) staff and
physician training.
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Table 3-1
Screening Tool—Care Management Components
Components Y N
Clinical
• Disease protocols/clinical guidelines/pathways
• Compliance monitoring, case management
Patient Education and Support
• Group or individual patient education
• Outreach education and secondary prevention programs
• Enabling and support services
Data Analysis and Profiling
Utilization and Cost Tracking
Staff and Physician Training
3.2.2.2 Selection Criteria
Based on the RWJ project goals, two qualifying criteria were established.
These were that the programs serve the uninsured and be able to track utilization
and costs or collect data to determine the impact of these programs. Programs
that met these two criteria were then screened against secondary criteria: a)
programs operated by different types of safety-net providers, b) comprehensive
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programs with a focus on multiple populations, and/or c) programs serving the
Latino population and other ethnic groups with diabetes.
Programs in different types of host organizations, such as integrated
delivery systems, community health clinics, grant-funded programs, disease
clinics, and health plans were of interest because of their unique structural,
financial or environmental opportunities or limitations with regard to the uninsured.
The programs also provided the chance to learn whether different opportunities,
considerations, costs or benefits were associated with the different settings.
Comprehensive programs able to set forth a business rationale to secure higher
levels of investments and able to collect data were considered proxies for
successful programs. Programs serving groups with cultural and language
differences were also selected because they offered population challenges that
would be of interest to safety-net providers more broadly.
Based on the selection criteria, and a willingness to participate, 22 of the
75 sites screened were selected.5 A list of study sites is included in Appendix B:
Telephone Survey Participants and Sites Visited.
3.2.3 Telephone Survey of Safety-Net Providers
Telephone conference calls lasting about 90-minutes were conducted
between late July and early August 2000. Most were with a medical director and
5 The RWJ study included 24 study sites. The interview notes for two sites were incomplete because
sites did not meet study criteria. These sites are not used in this analysis.
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an administrative program director together. A two-member interview team,
consisting of the writer and a research assistant, conducted most interviews.
Notes from of the interviews were prepared and shared with the interviewee for
two reasons. The first was to assure quality and accuracy. The second reason
was to identify missing data elements and to make a second request for any data
that was not available or provided during the interview. Nearly all interviewees
provided the data requested if it was available.
3.2.3.1 Host Organization Research
Before each telephone survey, background information about the host
organization available from public sources and web sites was obtained. The host
organization was defined as the parent organization within which the care
management program budget would be found. In some host organizations, for
example large public hospital systems, care management programs are located
within multi-function units. Typically, quality departments are also responsible for
utilization. In other host organizations, such as small community clinics, the care
management program could be the entire operation. The data collected for the
host organization included information related to its creation, mission, services,
and catchment area as well as its aggregate budget, number of employees, and
sources of funding. This information was gathered to determine the organization's
relative size of investment in care management and how the host organization,
through its structure and purpose, may potentially influence the program design.
This background information was sent to the interviewees prior to the interview
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and was used to clarify the study’s scope and resource commitment or to add sub
questions to better understand relationships, history and other contributing factors
such as medical school affiliations, etc.
3.2.3.2 Survey Interview
The telephone survey covered four sections addressed in the telephone
interview: (a) General Observations, (b) Evaluation—Impact, (c) Cost Tracking,
and (d) Program Description. A fifth section was used to review background data
on the Host Organization.
3.2.3.2.1 Section 1 —General Observations
The General Observations section consisted of five questions designed to
help the researcher better understand the genesis and rationale for the program,
to learn how satisfied the sites were with what they were doing, and to assess
whether the goals of the programs had been realized. The first question in this
section delved into the program’s history and duration, the impetus for its
development, the goals at the program’s onset, the source of start-up funding as
well as the economic rationale behind the program. This question was followed by
a question about the lessons learned: whether initial goals were attained or
modified, the factors for the program's success, activities that made a difference,
and whether, if they were to start over today, would they change the design of the
program. Participants were asked about advice or warnings they would give
others interested in developing similar programs, and the barriers, facilitators, and
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the program’s potential for replication. Future intentions were probed. Did they
plan to continue the program and were there were any threats to the program?
3.2.3.2.2 Section 2—Evaluation
The Evaluation section consisted of two questions. The purpose of this
section was to gather data as to whether these programs achieved the stated
goals of reducing costs or realizing savings. Participants were asked about known
program impacts and for examples that showed that the program was helping
them care for the uninsured more cost effectively.
3.2.3.2.3 Section 3—Cost Tracking
The section on Cost Tracking also consisted of two basic questions. The
first asked about cost tracking systems, whether the program had a tracking
system, what they were tracking, the resources required for tracking, both at start
up and on an ongoing basis and the funding sources for the tracking system. The
second question asked about return on investment and how the program was
helping them manage costs.
3.2.3.2.4 Section 4—Program Description
Data were collected to compare with financial investments and program
results to learn the scope and level of effort undertaken by the sites to operate
their programs. In other words, how much were they able to do with the funding
they received? The section covered three different areas: program population,
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program structure, and information related to the clinical components of the
program. Program Population questions asked about the number and
demographics of the patients served as well as program growth over the last three
years. Program Structure questions asked about the annual budget for the care
management program, as compared to the host organization. Information was
also sought on employees and funding as well as the leadership structure for both
administrative and physicians’ program within the host organization. Participants
were also asked whether the program was self-sustaining and, if not, then how it
was funded.
The third category, Clinical Components, required the gathering of specific
data about the objectives for the program, activities and initiatives within the
program, their focus as well as how patients were identified and enrolled in the
program. Using Table 3-2, interviewees were asked to identify care management
activities, such as clinical components, patient education, and support and
activities to influence clinician practice for each of the initiatives they had.
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Table 3-2
Disease/ Program Focus
Program Focus Diabetes HTN Asthma Other
Clinical Components
Clinical Guidelines/ Disease Protocols
Risk Identification
Compliance Monitoring
Case Management
Other
Patient Education and Support
T raining— Self-Management
Training— Behavioral Change
Psycho-social Support
Outreach Education
Secondary Prevention Programs
Linking to Social Services
Transportation
Interpreter Services
Patient Satisfaction Survey
Other
Influencing Clinician Practices
Provider Education
Decision Support (via computers or other means)
Incentives (financial or other)
Other
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Interviewees were asked to identify specific clinical components used in the
program, such as clinical guidelines or disease protocols, risk identification toots or
processes, compliance monitoring or case management, and patient education
and support activities such as self-management training to help patients manage
their condition, training to help patients adopt behavioral changes, psycho-social
support, outreach education, secondary prevention programs as well as social
services such as community support services, transportation, and interpreter
services. Participants were also asked about the use of patient satisfaction
surveys as well as other program activities designed to influence clinician
practices, such as provider education, decision support (via computers or other
means), or the use of incentives (financial or other). A general category was used
under each component to identify other types of interventions used that were not
listed in each of the three areas.
3.2.4 Case Studies
Of those surveyed, seven programs were selected for additional study to
gain in-depth knowledge of the business rationale for the programs, their
implementation, and continued support. The two health plans selected were
Boston Medical Center HealthNet Plan, in Boston, Massachusetts, and Contra
Costa Health Plan in Martinez, California. The two hospital systems selected—
Jackson Memorial Hospital in Miami, Florida, and Parkland Health and Hospitals in
Dallas, Texas—were academic health centers, publicly owned. Health centers
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were community-based and not-for-profit. Three community health clinics were
selected for site visits, the Community Health Center Network in Alameda,
California, Project Oulce in San Diego, California, and the Grace Hill Neighborhood
Health Center in St. Louis, Missouri.
Community Health Center Network and Project Dulce were treated as a
single case study because the paired health centers both had community-based
diabetes programs for Latino patients. However, their implementation approach
and host organizations were different. Project Dulce is a centralized program with
project staff hired and trained by the host organization and placed in several
community health centers as adjunct programs. Community Health Center
Network is operated by a managed services organization that was developed for
managed care contracting; it uses centralized staff to guide medical directors and
clinic staff through the design and implementation of a prototype diabetes care
management program in the respective health centers.
3.2.4.1 Case Study Site Selection
To select the sites for visits and case study, potential sites were rated on
five criteria, using a + (plus), 0 (neutral), or - (minus) rating scale based on the
information gathered in the telephone survey. See Table 3-3—Definitions and
Rating. This rating scale was used because of the variability of the programs and
the inability to compare them one against the other. The ratings indicated that the
program met the criteria (plus), did not meet the criteria (negative) or, if there was
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insufficient evidence to say that the criteria were met or not met, the programs
were given a 0 or neutral rating.
The sites were rated on whether they used clinical guidelines, because of
the implications these have for restructuring the delivery system, their ability to
proactively identify opportunities for early intervention, and their potential for
replication. The criteria also were used to examine the degree to which programs
were able to achieve the program goals of improving access and health status and
reducing unnecessary emergency room and hospital use. Most programs had
poor or nonexistent data collection systems and, as a result, were unable to
demonstrate program impact. The ratings reflect comments made during the
telephone interviews about whether the goals were met.
Programs scoring the most +’s were eligible for consideration for case
studies. Selection was also based on an interest in selecting two programs from
each type of safety-net organization: health centers, hospital systems, and health
plans. The health plan group included uninsured financing programs that function
like health plans but are limited to overseeing global budgets for this single
population
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Table 3-3
Definitions and Ratings
Criteria
+
0 -
“Successful* clinical care management
program: A well-organized program that
includes clinical guidelines, clinical work
teams or committees.
Has a clinical
component
Has care
management
but no clinical
component
Does not have
care
management
in place
Provider and organization goals, cost,
duration, scope, and utilization: The program
is structured to proactively intervene or to
identify opportunities for early interventions.
Well-
organized
structure to
support effort
Has some
components of
a structure
Is organized
around
disease care
Improved access and health status: A
program has demonstrated qualitative or
quantitative measurements or both.
Improvements
reported
Believe
improvements
have occurred
No known
results
Potential for replication: A program operates
in an environment with which similar
organizations can identify and transfer the
experience.
Yes Under unique
circumstances
No
Reduced inappropriate emergency room and
hospital use: A program’s goals target these
areas, and there are efforts to document
these outcomes.
Reductions
reported
Believe
reductions
have occurred
No
3.2.4.2 Site Visits
Site visits were used to gather additional details about how the care
management programs were established, sources for start-up funding, barriers
encountered during implementation, how they were overcome, and successful
implementation strategies. The primary focus of this series of two-day visits was
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to understand the perceived benefits of each program to the host organization, the
community, and individual patients. The site visits allowed direct observation of
care management applications in the delivery setting and provided insights into the
business rationale for implementing and funding these programs.
All the programs visited serve the uninsured directly, except for a Medicaid-
only plan. The latter site was selected because it is a safety-net-provider-
sponsored plan. Additionally, the plan’s strong administrative care management
strategies and close ties to the city’s program for the uninsured enhanced its
applicability to the study.
Through multiple interviews the sites provided opportunities to delve further
into each programs’ history, financing and information systems, and care
management components from executive, clinical leadership, and program staff
perspectives. Over a two-day period each, interviews were conducted in each of
the seven organizations with the CEO, medical director, nursing director, program
manager, program staff, finance, and operations staff, when they were available.
The information gathered supplemented the program descriptions obtained during
the telephone survey and included more specific information about the overall cost
of implementation and project savings. The degree to which programs were able
to achieve the program goals of improving access and health status and reducing
unnecessary emergency room use and hospitalization was also further examined.
For a complete list of sites visited, please refer to asterisked organizations in
Appendix B—Telephone Sun/ey Participants and Sites Visited.
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Overall, the site visits provided an overview of prerequisites, ongoing
elements, and key stakeholders needed to implement and sustain care
management programs and enabled collection of the large variety of tools these
programs use. All site visit participants were willing to share the products
developed by them in hopes that others could build on their efforts. Case studies,
with program highlights, funding and reported impact, were prepared from the site
visits.
3.3 Next Chapter Preview
In the next chapter sources used to develop the hypothesized business
case are discussed and a force field analysis is presented. The force field analysis
examines the organizational context and operating environment of safety-net
providers to identify forces that influence business practices related to the
uninsured. In this way forces contributing to the business case for care
management are identified and the theoretical business case is refined.
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Chapter 4
Force Field A nalysis
4.1 Introduction
Because healthcare organizations are complex businesses and safety-net
healthcare organizations, with their melange of funding, represent another layer of
complexity, a business case analysis can be a daunting task. To organize the
business case and make the task of analysis manageable, the Force Field
Analysis Model (Lewin 1969) is used to represent forces (a metaphor for a broad
range of influences) affecting safety-net providers in the complex healthcare
environment.
Outlining the business case to assess whether the desired outcomes are at
least theoretically possible is usually the first step to gain approval to implement a
program according to Arthur Anderson's Method One for system development. A
business case is a high level abstraction that serves as a continuous benchmark
for decisions along the way and allows one to test different assumptions
(Fitzgerald 2001). As more information is acquired or available, the theoretical
business case is adjusted and modified. Through this iterative process the
business case is further defined enabling more rigorous study.
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In this chapter, the force field analysis used to develop the business case is
presented. The analysis specifically looks at how safety-net provider business
practices are influenced by forces related to characteristics of the uninsured and of
safety-net providers, and by forces from the healthcare industry and managed
care. The potential of care management as a business strategy is illuminated.
Several sources contribute to the theorized business case for care
management for the uninsured. First, findings of a study commissioned by the
RWJ Foundation (RWJ study) of safety-net providers using care management for
the uninsured are used to develop the study’s premises and suppositions for a
theorized business case. The theorized business case then guides a literature
review of the domains contributing to decisions by safety-net providers to
implement care management programs to care for the uninsured. These domains
include the uninsured, safety-net providers and their funding sources, the health
industry and managed care. Within the health industry domain are influencing
forces related to care management, the fourth domain included in the literature
review. Through a force field analysis of each domain, influencing driving and
restraining forces with business practice implications are identified and organized
into a force field model.
The chapter begins with an explanation of the Force Field Analysis Model
and a discussion of the sources contributing to the business case. This is followed
by an analysis of four domains contributing to the organizational context and
operating environment of safety-net providers. This analysis identifies driving and
restraining forces influencing safety-net provider business practices related to the
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uninsured. The chapter concludes with a critique by subject area experts, referred
to as Model Subject Experts (MSE), of the Force Field Model developed through
this analysis.
4.2 Force Field Analysis Model
The Force Field Analysis Model developed by Kurt Lewin (1969) is a way
to organize and systematically analyze relevant factors leading toward a desired
goal or state, in this case implementation of care management programs for the
uninsured. The Lewin model uses typology, a nonquantitative geometry to
represent structural relationships both within a person’s psyche and in his
psychological environment (Marrow 1969). Lewin defined “field” as “the totality of
coexisting facts which are conceived as mutually interdependent” (Yinger 1965,
39). Lewin posited that a broad range of influences presenting as both restraining
and driving forces arrayed against each other within a force field create an
"organizational equilibrium" (Fuqua, and Kurpius 1993,12). The "driving forces" in
the Force Field Analysis Model represent the factors that support the targeted
change and "restraining forces" are barriers to the change, factors that tend to
keep the organization in a static condition (Fuqua and Kurpius 1993,12).
Lewin (1969) conceived a concept of an equilibrium applied to
organizations and their environments, namely, that change in one component of
an environment reverberates onto other components in that environment and that
change occurs in the general condition of both components as a result. In
environments with high tensions, or quasi-stationary equilibria or dynamic
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equilibria, organizations maintain balance through a series of ongoing interactions
that co-act to control one another (Neel 1969, 289). The balance is determined by
offsetting forces. The concepts of equilibrium and disequilibrium in a social system
permit the consideration of a wide spectrum of organizational and environmental
influences as driving or restraining forces such as preferences, finances, fear of
change, mistrust, role perceptions, competition, and basic organizational cultures.
Lewinian field theory has gradually been expanded to include unconscious
motivations manifest in individual as well as group behavior as influencing forces
(Scheidlinger 1994).
The Lewin model applied in a social setting facilitates examination of both
psychological and sociological factors which is useful for planning and strategy.
Restraining forces can be understood as impediments to change, working against
change and driving forces pushing or moving toward change. When restraining
forces are collectively stronger than the driving forces, action can be taken to
mitigate these forces and driving forces supporting change can be strengthened
moving the organization toward a desired goal.
The force field model is used to conceptualize change as movement across
time and to model successive approximations of the desired state of affairs. Using
a Force Field Analysis Model to organize the forces theorized to influence the
business case provides a snapshot of the forces at play in the current situation
(the problem of access for the uninsured) and how these forces are likely to affect
or contribute to a future, more desirable state (the goal of using care management
to care for the uninsured). Conceptualizing restraining and driving forces arrayed
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against each other within safety-net organizations working against or pushing for
the application of care management for the uninsured can capture the relationship
between elements in the environment to explain the conditions that lead to a
desired goal. Analysis of the various push-pull, driving and restraining forces
facilitates the plausibility of the business case to be assessed. Conditions that
influence safety-net providers to use care management for the uninsured or the
reasons why they are not supportive can be illuminated.
Through a force field analysis the beginning premises for the business
case are refined. In the next section the logic behind and the sources contributing
to the business case are discussed.
4.3 Theorized Business Case
The first step of a business case is to theorize forces at play that create the
possibility for a business case. To develop a hypothesized business case the
findings from the RWJ study that confirmed safety-net providers are using care
management are examined.
The RWJ Foundation commissioned The Lewin Group to determine
whether safety-net providers are using care management to care for the
uninsured. The RWJ study concluded that several factors influence safety-net
provider decisions to use care management. These findings serve as a starting
point to develop a theorized business case to explain why safety-net providers use
care management for the uninsured.
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4.3.1 RWJ Study Findings
Twenty-two safety-net providers were interviewed in the RWJ study to
learn why they were using care management for the uninsured. The study
concluded with these 1 1 findings :
1. Safety-net providers are using care management strategies for the
uninsured.
2. Care management strategies and techniques used by safety-net
providers are similar to those used by private-sector providers, and
they are customized to multi-ethnic, low-income populations.
3. The incentives and rationale for safety-net providers to invest in care
management are different from the private-sector because of their
different economic structures.
4. Cost avoidance is real for safety-net providers because when
uninsured need care, safety-net providers bear the cost.
5. Care management increases the demand for primary care visits and
identifies gaps in care. Safety-net providers respond by developing
new programs.
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6. Providing quality care and generating patient loyalty are important
efforts to remaining competitive for patients who have a choice of
providers.
7. Care management programs increase safety-net providers'
marketability and overall public awareness that they are meeting their
mandate to provide high-quality healthcare to the uninsured.
8. Care management programs build employee morale and physician
satisfaction because these programs are addressing health needs.
9. The opportunity to affect health outcomes and utilization and to realize
savings from care management strategies is different for community
health centers, hospital systems, and health plans.
10. Funding for programs in the primary care setting is needed to support
and sustain care management.
11. Most providers are using programmatic approaches versus
organizational change strategy to implement care management
programs (Coye et al. 2000, 5-11).
These study findings confirm that safety-net providers are using care
management for the uninsured and provide useful insights to theorize a business
case. According to these findings, care management programs offer safety-net
providers benefits (e.g., cost avoidance, improved employee and physician
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morale, and patient loyalty), introduce new challenges (e.g., increased demand for
primary care, gaps in the system become more evident), and are difficult to fund.
The study findings also indicate that the incentives and rationale for safety-net
providers to invest in care management are different from the private-sector
because of their different economic structures.
Three conditions important to the business case are identified through this
study: (a) that at-risk contracts have increased competition for Medicaid patients,
(b) that safety-net providers are economically dependent on federal funding
mechanisms and these funding mechanisms reinforce their responsibility to care
for the uninsured, and (c) that because of their missions, safety-net providers have
a tradition and are oriented to serving hard-to-serve populations.
With this as background, a business case is developed theorizing that in
the organizational context of safety-net providers and in the context of managed
care economics care management for the uninsured is possible.
4.3.2 Business Case Suppositions
As noted earlier, the first step of a business case is to adopt premises
under which a desired outcome, in this case care management for the uninsured,
is at least theoretically possible. The theorized business case begins with the
study premise that safety-net providers, operating with limited funding, are
responding to health industry changes and business conditions evolving from
managed care that are affecting access to care for the uninsured. This
conceptualization of linking care management programs to safety-net provider
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responses to health industry changes prompted by managed care form the logic
for eight suppositions delineating the conditions for a theorized business case and
the relationship between elements in the environment.
The business case suppositions are the following:
1. Safety-net providers provide care to large numbers of uninsured; as
the number of uninsured grows, there is a corresponding increase in
the demand for safety-net services.
2. Safety-net funding encompass responsibility to care for the uninsured
and a structural dependence on Medicaid funding mechanisms,
primarily disproportionate share payments and cost-based
reimbursement.
3. Safety-net providers experience pressures to control costs because
their funding sources serve as fixed budgets; for this reason managing
the cost of care of the uninsured is important to their survival.
4. Safety-net funding to pay for the care of the uninsured is linked to
Medicaid patient volumes; as a result, changes in Medicaid market
share impact the ecosystem of funding for the uninsured.
5. Managed care economics attract non-safety-net providers to the
Medicaid market, thereby increasing beneficiary choice of providers
and introducing market dynamics and increased competition to safety-
net provider economic models.
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6. Safety-net providers are contracting with managed care organizations
to retain Medicaid market share and are exposed to cost control
incentives and requirements for population-based health maintenance
and preventive care.
7. Managed care organizations use care management programs to
standardize care and decrease unnecessary hospitalization and
emergency care.
8. Safety-net providers using care management for Medicaid patients
also use these programs to care for the uninsured to contain cost and
because of incentives arising from new evolving business structures.
These suppositions represent a high-level abstraction of factors theorized
to influence safety-net providers and illuminate prominent domains or spheres of
influence contributing to the business case. The organizational context of safety-
net providers is the focus of this analysis because the business case for care
management is realized when decisions are made to implement these programs.
The business case suppositions draw attention to four domains from which
safety-net providers may experience pressures that propel, dictate, motivate, or
otherwise influence their program decisions and funding priorities. These domains
are (a) characteristics of the uninsured population, (b) characteristics intrinsic to
safety-net providers, their missions, their accessibility to the uninsured, the
requisites of the funding base they depend on to exist and from their operating on
fixed budgets, c) market dynamics in the healthcare industry, those related to
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managed care in general and Medicaid managed care in particular, and d) care
management, the potential benefits this intervention may have for safety-net
providers when applied to the uninsured.
These domains are the focus of a literature search discussed in Chapter 2.
In the next section a Force Field Analysis Model is employed to understand the
organizational context and environment created by the confluence of forces from
each of these domains. The forces are analyzed to identify factors and conditions
that affect the business practices of safety-net providers, particularly those that
function as driving or restraining forces for the business case.
4.4 Environmental Context for the Business Case
Safety-net providers operate in a complex environment influenced by a
milieu of internal and external drivers, incentives, and rewards introduced from
multiple domains or spheres of influence. These forces and contextual factors are
examined for factors and conditions within the organizational context of safety-net
providers that serve as driving or restraining forces in the development of care
management programs for the uninsured. Forces, in the Lewin model are a
metaphor for a broad range of influences that are positive and negative, vary in
strength or prominence based on situations and are directional; that is, they
contribute to movement. This analysis looks at driving and restraining forces.
Driving forces are conceived as both drivers and incentives that influence
organizational decisions. The term “ drivers,” as used in this study, comes from
the American Heritage Dictionary (1982) definition of “drive”—to push, propel, or
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press onward forcibly; to force into or from a particular act or state; “incentives’’
are defined as fear of punishment or as expectations of rewards that incite to
action or effort—to draw or pull toward a particular act or state. By defining driving
forces as drivers and incentives in an organization, the push-pull effect of forces
can be better understood.
What follows is an analysis of driving and restraining forces that potentially
influence whether or not care management programs are implemented. The
analysis looks at four domains: (a) characteristics of the uninsured population, (b)
characteristics and funding base of safety-net providers, (c) the healthcare
industry; market factors related to managed care in general and Medicaid
managed care in particular, and (d) characteristics of care management. The
fourth domain is a subset of the health industry domain that is examined
separately because care management is in part a response to changes occurring
in the health industry prompted by managed care economics. Forces leading to
these responses are important to the business case and the application of care
management to the uninsured.
4.4.1 The Uninsured
Access to care for the uninsured continues to be a pressing public policy
concern. The number of uninsured increased by 1 1 million in the last ten years
primarily due to welfare reform and a rapid rise of jobs without health benefits.
Although most uninsured are low-income adults, the largest growth cluster among
uninsured are for those with incomes above 200 percent FPL.
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The uninsured face harsh realities when they need healthcare. Without a
medical home the uninsured seek care through Emergency Departments or take
chances with their health and well being by postponing or delaying care, or cutting
comers with reduced treatments or medications, and home remedies. The result
is that the uninsured often seek care for preventable health conditions or present
with advanced disease or untreated health conditions.
The business practice implications for safety-net providers from forces in
the uninsured domain are captured in Table 4-1. Most uninsured are working
adults, who are not on health insurance based on employer coverage or enrolled
in public insurance or other health assistance programs. Safety-net providers are
likely to serve these workers when they are in need of health services and are
medically needy. Preventable conditions and treatment for advanced or untreated
conditions represent potentially avoidable cost, and care through an Emergency
Department is even more costly. Controlling the cost of preventable conditions
and care provided through Emergency Departments is important particularly as the
number of uninsured increases. These untreated conditions represent potentially
higher operating costs and are driving forces to use care management for the
uninsured to prevent deteriorated health and to avoid Emergency Department use.
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Table 4-1
Force Field Model: Uninsured Domain
Driving Forces
Uninsured
D -1 Uninsured present for care with more advanced disease and preventable
conditions.
D-2 Uninsured gain access through the emergency department which is more
costly.
I-28 Uninsured go in and out of public and private health insurance programs.
Safety-net providers may also be motivated to use care management for
the uninsured because their care may be compensated through sources other than
health insurance. State legislatures and Congress, notorious for incrementalism,
respond to public pressures related to unmet health conditions by creating special
health programs to meet the needs of target populations or to pay for certain types
of conditions. The State Children's Health Insurance Program is one example.
The Breast and Cervical Cancer Treatment program enacted this year to pay for
the treatment of uninsured women with breast and cervical cancer is another
example. State Medicaid programs are comprised of several dozen-niche
programs designed to provide coverage for target groups. One example in
California is Limited Medi-Cal designed to pay for prenatal, pediatric, and
emergency care for undocumented immigrants. Through Share of Cost provisions
in the Medicaid program states are able to create a sliding premium health
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insurance product that is available to any uninsured individual; premiums are
based on a ratio of medical expenses to income. For uninsured individuals faced
with unexpected high healthcare cost this is a health coverage option. Safety-net
providers are aware of these programs and develop financial counseling programs
to identify funding sources for the uninsured. In terms of business practice, the
individual that walks in the door as uninsured may in fact be eligible for a special
program, may become insured with the next new job, or may be sick enough to be
eligible for public health coverage. The potential of a payment source is a driving
force in general. This force becomes stronger for care management when the
uninsured are medically needy.
4.4.1.1 Core Safety-Net Providers
Like politics, all healthcare is local. Community factors determine local
healthcare delivery systems and how well safety-net providers are supported. This
is one reason there is no single prototype safety-net provider. To simplify the
business case analysis three types of core safety-net providers are considered:
safety-net hospitals, community health centers, and safety-net health plans.
Health plans formed in response to the Medicaid program’s transition into
managed care or quasi health plans responsible for fixed budgets to purchase
healthcare services for indigent populations are considered safety-net health
plans. These health plans are part of the safety-net because they rely on safety-
net providers to meet managed care contract obligations or they were created to
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manage fixed indigent health budgets. Indigents are a special category of
uninsured, very poor and medically needy.
When they exist in a community, safety-net hospitals and community health
centers are often the primary source of access to care for the uninsured. Safety-
net health plans, similar to non-safety-net health plans, are fiduciary agents; and
unless they are responsible for indigent health programs, they do not serve the
uninsured directly. However, health plans formed to retain safety-net provider
participation in Medicaid managed care are considered in this analysis because of
an inextricable link between Medicaid and the uninsured. Collectively, safety-net
hospitals, community health centers, and safety-net health plans are considered
core safety-net providers in this analysis. Because core safety-net providers are
fundamentally different in several important ways, these differences are discussed
next.
4.4.1.2 Safety-Net Providers Have Different Business Case Considerations
Safety-net providers are different from one another in many ways. The
most obvious and important differences for a business case analysis are related to
structure, scope emphasis, and funding sources. Table 4-2 provides a high level
description of these differences. Structure refers to organizational form and
governance. Scope Emphasis looks at the primary focus of care delivery within
safety-net organizations. Funding Source refers to primary or dominant funding
mechanisms. These three components are each analyzed for driving forces
supporting the use of care management for the uninsured, and the results are
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summarized in Table 4-3. Table 4-3 presents the driving forces related to the
characteristics of safety-net providers as identified through the force field analysis.
Table 4-2
Differences in Safety-Net Provider Type
Public
Hospitals
Community
Health Centers
Health Plan
Structure Mostly government-owned
with elected boards. Many
linked to academic
medical centers
Non-profits with
community
boards
Most are corporations
with mixed boards which
include providers
Service
Emphasis
Inpatient care/services
Emergency and specialty
care
Primary care Fiscal and utilization
monitoring, risk
mitigation
Funding
Source
Patient fees,
disproportionate share
payments
Cost-based
reimbursement
Per member per month
prospective payments
4.4.1.3 Differences in Structure
Using the Institute of Medicine definition for safety-net providers partially
mitigates differences in structure for this business case analysis. With the IOM
definition, safety-net providers share two common characteristics: (a) they offer
access to services for patients regardless of their ability to pay, either by legal
mandate or stated mission, and (b) they serve mostly the uninsured, Medicaid, or
vulnerable populations. Other differences in structure are related to governance
and mission.
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Although many safety-net hospitals are private and religious organizations,
they are linked to government and academic medical centers, primarily due to
historical reasons and local conditions. These links influence structure and create
complex organizational environments sensitive to external pressures and subject
to contradictory and inconsistent objectives. Public organizations are subject to
layers of government responses to healthcare problems and funding. As public
organizations, they have a higher degree of exposure for negative outcomes
because of their tax-based funding they are often targets for court action to
establish public policy. Elected policy makers are directly impacted by public
opinion and community pressures. Because of a shift of responsibility and
accountability from the federal government to the states and from the states to
localities and their local public policies; economic and competitive forces and
community values are the principal drivers of change in today’s healthcare market.
Public sunshine laws and forces related to accountability and community or public
expectations are prominent business considerations for safety-net providers. The
prominence and strength of these driving forces are often related to triggers such
as when negative patient outcomes are made public, or during budget seasons
addressing budget shortfalls or when mismanagement is made public.
Universities are more isolated from community pressures, but they are
exposed to accreditation requirements. Academic medical centers create a culture
of learning and research within service-oriented organizations and depend on
large patient volumes with uncommon or complex care needs to satisfy their
educational objectives. The care-seeking behavior of the uninsured makes them
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ideal candidates for these organizations. This match of needs serves as a driving
force for these organizations. The differences in organizational missions and
goals—for example, service versus education—can create tensions in these
organizations and result in organizational priorities contrary to and inconsistent
with typical business objectives. For example, higher cost patients may be
desirable for teaching programs but not to budget-concerned administrators.
Mission-driven organizations may be interested in providing routine care for large
numbers of patients to meet community needs; this is not so for academic medical
centers. Care management facilitates clinical pathways to define care process
and to offer anticipatory care to prevent deteriorated health. When organizational
interests in cost control and education are combined, they serve as driving forces
for care management.
In general, CHCs are community-based organizations established in
medically underserved areas with a social justice mandate to provide access to
care. Consumer-dominated governing boards oversee CHCs. For CHCs,
organization structure is the result of contractual requirements imposed by their
primary funding source through Medicaid, cost-based reimbursement. These
structures are driving forces because they are highly sensitive to local community
influences introducing organizational objectives contrary to and inconsistent with
typical business considerations. Because health conditions are often intertwined
with social and economic conditions, these latter conditions become driving forces
for organizations with social justice missions.
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Under Medicaid managed care health plans or MCOs are new conduits for
patients and Medicaid revenues. Safety-net health plans are the products of
special design features, premium subsidies, and benefit packages to retain safety-
net provider participation in the Medicaid program. Health plans developed around
safety-net providers become part of the safety-net fabric when they adopt a dual
role of principal-agent for both the state and safety-net providers or when they
serve that purpose for safety-net providers. Adapting to managed care
requirements in order to retain Medicaid patients and associated revenues and
subsides is a driving force, but not necessarily for care management. For health
plans, helping safety-net networks become more cost-effective and provide care
comparable to non-safety-net networks is a driving force as well. As agents of
Medicaid agencies, safety-net health plans can wield provider contracts to achieve
compliance. Managed care contracts also serve as a driving force when they
require clinical pathways or standards for preventive care. In this way managed
care contracts are a driving force for care management.
Organizational structures, their missions, and governance influence
priorities and objectives and business and strategic plans, and in this way define
the business case specific for each organization. Common among core safety-net
organizations are their missions and the influence of local communities that
reinforce and hold safety-net organizations accountable for meeting their missions.
Safety-net hospitals have a legal mandate and many community health centers
have a funding mandate to assure access to healthcare irrespective of ability to
pay. Beyond that safety-net providers play an important role in communities
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meeting the needs of vulnerable populations and filling gaps in local health
systems. Bum units, intensive care units, and trauma centers are examples of
special services that typically fall to safety-net hospitals when these services are
not profitable. The distinction of being providers with open doors is a driving force
generally but by itself is not a driving force for care management. That the
uninsured seek care in medically needy conditions create for safety-net hospitals
and community health centers a moral responsibility to serve this population which
is a driving force for care management when the need for care is preventable or
avoidable.
4.4.1.4 Differences in Services Emphasis
Healthcare is provided along a continuum of services; public health
services and those to prevent illness or maintain health are at one end of the
continuum and tertiary or highly technical or specialized care is at the other end.
Differences in scope emphasis reflect services provided along this continuum.
The services offered determine the exposure to uncompensated care for the
uninsured and the potential uses and financial benefits of care management.
Safety-net providers have no effective way to avoid treating acutely ill
patients that present themselves at their doorsteps. Because of the nature of
healthcare delivery, the greatest burden of care for the uninsured falls on safety-
net hospitals. This is because of the special responsibilities hospitals have as
providers of urgent and life saving care, but also because patients seeking hospital
services tend to have more acute health conditions requiring more expensive
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diagnostic services and treatments. Acute conditions also increase hazards when
hospitals fail to provide timely care. These obligations are reinforced through
EMTALA with legal sanctions.
Community health centers, on the other hand, are challenged by
discontinuity in care; the uninsured patients are more likely to seek care when they
feel discomfort and to delay care when evidence of disease is absent. Because of
their mission and community and legal mandates to maintain open access, safety-
net providers incur uncompensated cost for the uninsured and for unprofitable
services. The more extensive the needs and/or the greater the number of
uninsured, the higher the proportion of uncompensated care safety-net budgets
must absorb. Uncompensated costs create budget pressures that function as a
restraining force—but uncompensated costs can also function as a driving force
for care management because of its potential to reduce costs. Uncompensated
care as a restraining force is discussed below.
The populations served, needs, and community expectations also
determine the services emphasis of safety-net organizations. Safety-net
organizations tend to serve low-income, ethnically diverse and vulnerable
populations with special needs such as the homeless, the mentally ill, and
substance abusers. As a consequence, safety-net populations have social and
behavioral needs as well as medical needs. To effectively treat these needy
populations safety-net providers use outreach programs and enabling services.
Outreach programs send healthcare workers out into the community or into the
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homes of the patients served. Enabling services include child care, transportation,
financial counselors, case managers, and a variety of other support activities.
Public programs such as Medicaid and Early Screening, Diagnostic and
Treatment Programs (ESDTP) also require non-medical services such as
transportation, interpreter, and translation services. These enabling sen/ices are a
driving force for vulnerable populations to use safety-net organizations and
possibly a force in support of care management because outreach and enabling
resources are common to care management programs.
Few of these services are directly or fully paid for by health funding
streams; yet, safety-net providers offer these services. Cross subsidies enable
safety-net providers to fund programs to care for difficult populations and complex
patients with medical and non-medical needs. For safety-net providers, offering
non-medical services is a business decision related to cost effectiveness. Costs of
services delivered or started materialize in improved health when care is
completed and when social and behavioral conditions are also addressed. Once
non-medical services are offered, the per unit cost is reduced with utilization
providing the rationale to use these services for the uninsured. This practice is a
strong driving force indicating that business practices in safety-net organizations
support the business case for care management.
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Table 4-3
Force Field Model: Safety-Net Provider Domain
Driving Forces
Safety-Net Providers
D-3 Core safety-net providers are the last refuge for the uninsured and have higher
uncompensated care.
D-4 Once the acutely ill patients present, SNPs must treat them.
D-7 SNPs that are also academic medical centers have educational requirements
that caring for the uninsured help to meet.
1 -1 7 SNPs are mission driven, established to serve a community.
1 -1 8 SNPs see themselves as a community resource as well as a business.
1 -1 9 For some SNPs, their governance structure requires them to be more responsive
to their local community.
I-20 SNPs are located in medically underserved areas, which contributes to a social
justice agenda.
1 -2 1 SNPs rely on local community support, which increases expectations to provide
access to care.
I-23 SNPs provide non-medical services (transportation, translation, child care and
outreach) for the Medicaid population and offer these to the uninsured to spread
out sunk cost.
I-26 SNPs are experienced in caring for complex patients with medical and non
medical needs.
I-27 SNPs incur the cost of deteriorated health for preventable conditions that result
from limited access/care.
I-29 Government-owned SNPs, as deep pockets, have a higher degree of legal
exposure for negative outcomes.
I-30 SNPs are predisposed to fill gaps in care and seek ways to create programs to
get patients what they need.
1 -3 1 SNPs are oriented to behavioral and social issues because they serve hard-to-
treat homeless, substance abusing and mentally ill patients.
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Differences in scope of services also contribute to differences in funding
because funding policies are influenced by health needs and the science and
technology bias in the health industry. AIDS and breast cancer are examples of
health needs influencing health funding policy. Neonatal and cardiac care are
examples of funding to support the triumph of technology to extend life. Funding
programs also determine services emphasis through program and population
requirements and eligibility criteria. Although these differences are important, they
are secondary considerations in a business case analysis. Of primary importance
are differences in funding mechanisms and the means by which the care of the
uninsured is funded.
4.4.1.S Differences in Funding Mechanisms and Subsidies
Funding mechanisms such as health insurance programs, managed care
contacts, and direct or cross subsidies such as DSH funding and cost-based
reimbursement, each have associated factors and conditions that influence
business practices and have the great ramifications for the business case.
Medicaid and associated subsidies are the backbone of safety-net funding, and for
this reason they are the focus of this discussion.
Even though DSH and cost-based reimbursement are different funding
mechanisms, the end result is the same. By pooling low-income Medicaid
beneficiaries and the uninsured, the federal government is able to pay less than
market prices. These funding mechanisms create unintended consequences: (a)
concentration of low-income Medicaid and uninsured populations, (b) pseudo
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monopolies that reinforce the image of providers of last resort by limiting provider
interest in the Medicaid market, (c) structural dependence on Medicaid to fund the
uninsured, and (d) subsidies for the uninsured that disconnect payment from
patient volumes creating fixed budgets. Contrary to managed care economics,
indirect funding of the uninsured through subsidies also unties health funding from
individual patients and links funding to provider organizations.
4.4.1.6 Policy-Based Dependency on Medicaid
Congress, through a series of legislative Acts (Omnibus Budget
Reconciliation Act o f 1981, Tax Equity and Fiscal Responsibility Act o f 1982,
Consolidated Omnibus Budget Reconciliation Act o f 1985 and 1986, and to a
lesser degree through Graduate Medical Education funding), developed cross
subsidy programs that concentrated Medicaid and uninsured individuals in safety-
net provider organizations. Not surprisingly, Medicaid represents a major portion
of total revenue for both safety-net hospitals and community health centers; it is
the primary source of subsidies for the care of the uninsured. Retaining Medicaid
revenues and associated subsidies is a strong driving force generally although not
necessarily for care management. In part this is due to a disconnect between
funding and patient care created by indirect subsidies and funding of care
management as general and administrative functions. Unlike managed care,
where funds are directly tied to patients creating a cost-accounting mentality,
subsidies are defused. For this reason, resources expended for care management
programs are not linked to any particular funding source. Retaining Medicaid
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funds is as important as retaining any other funds that support general and
administrative functions.
The consequences of policy-based dependency on Medicaid for the
business case are (a) that changes in the Medicaid program have course-altering
implications for safety-net providers, and (b) that loss of Medicaid market share
directly impacts subsidies for the uninsured and potentially a favored status for
categorical or grant funding targeting the low-income and uninsured. In addition,
these funding mechanisms create subsidies for the uninsured that are indifferent to
budget pressures resulting from increased numbers of uninsured. Another
consideration for the business case is that local community influences, specifically
accountability for outcomes and expectations to maintain open access, are
unaltered by changes at the healthcare industry level. Combined, these driving
forces push safety-net organizations to look outside the organization for relief or to
make course-altering structural changes within their existing structures such as
relinquishing their mission or safety-net status.
As other federal, state, and local funders develop population or health
condition-related programs (e.g., Maternal and Child Health [MCH] Services Block
Grant [Title V], Ryan White Comprehensive AIDS Research and Education [CARE]
Act, and federal, state, and local family planning programs) safety-net providers
with a concentration of low-income and uninsured populations are given special
consideration. Categorical programs for the uninsured are a driving force to seek
grants and categorical funds and may indirectly support care management
because the patchwork of this funding requires coordination and management.
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These programs fund functions that are typical in care management programs;
support staff such as social workers, health educators and nutritionist and activities
such as case management and outreach. Table 4-4 captures the driving forces for
care management from safety-net funding mechanisms.
Table 4-4
Force Field Model: Safety-Net Provider Domain—Funding Sources
Driving Forces
Safety-Net F u n d in g
D-5 SNPs face increased accountability when they receive grants or public funds.
D-6 SNPs receiving tax subsidies face higher expectations to serve everyone,
irrespective of ability to pay.
D-8 Medicaid funding is the backbone of the safety-net and linked to subsidies for
the uninsured.
D-9 Loss of Medicaid funding reduces SNP’s ability to financially survive and to
cross-subsidize care for the uninsured.
I-22 SNPs rely on grant funds to care for the uninsured.
I-24 Federal, state, and local grants enable SNPs to gain market share dominance in
market niches.
I-25 Cost-based reimbursement allows CHC's to hire support staff (e.g., case
managers, health education, etc.), which can be used to support Care
Management programs.
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4.4.2 Changing Healthcare Financial Structures
In aggregate, safety-net systems are a small part of the healthcare
industry. Under fee-for-service public and private delivery systems coexisted:
separate and unequal. Many poorly funded public delivery systems are shadows
of the private system. Academic medical centers, with their links to state funding
and research and education mandates mitigate discrepancies for many safety-net
hospitals. Now, with managed care the separate and unequal phenomenon is not
sustainable. When large employers concerned with uncontrolled healthcare began
using volume-buying strategies to reduce healthcare costs, market economics took
root in healthcare. Managed care contracts give purchasers control of health
benefit budgets. Faced with similar budget concerns, the Medicaid and Medicare
programs adopted similar strategies, even though business principles and public
policy make strange bedfellows. With Medicaid managed care, the business
environment for safety-net providers changed fundamentally.
Understanding how managed care is different from fee-for-service
healthcare helps one to understand how fundamental this change is. Managed
care economics (a) replaces patient fees with enrolled or covered members as the
source of revenue for healthcare providers and (b) turns payers (government and
employers) into purchasers with the power to determine which providers will have
an opportunity to serve the members for whom they are purchasing health
services. Under managed care, providers are paid based on enrolled members
rather than services rendered and are rewarded for cost controls over service
delivery. The economics of managed care changes the financial incentives for
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providers, increases interest in the Medicaid market and decreases interest in
charity care. Payments are tied to insured individuals, eliminating opportunities to
cross-subsidize care for the uninsured and other public goods such as medical
education. Through financial policies requiring payment at the time of service,
providers can discourage the uninsured unable to pay at the time of service from
seeking care at their facility. Safety-net providers by definition cannot adopt these
financial policies
Competition resulting from a price-based business environment has led to
vast consolidation of health organizations, the phenomena of national investor-
owned provider companies, health plans, and greater price sensitivity from
purchasers. Business principles of economies of scale, risk transfer, and
profitability today dominate over healthcare principles of service and access. As
the penetration of managed care increases, charity care by physicians and
hospitals is reduced and access for the uninsured is less. This places an even
higher burden of uncompensated care onto safety-net providers.
The business practice implications of managed care economics are deep
for all healthcare providers and more so for mission-driven safety-net providers
dependent on policy-based funding structures to provide open access. For safety-
net providers managed care creates a business environment incompatible with
charity care and eliminates the opportunity for indirect cross subsidies for the
uninsured. The immediate focus and strong driving force are for safety-net
providers to adopt market strategies to retain Medicaid patients. This force alone
does not support care management. An alternative response is to redesign safety-
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net funding mechanisms which requires legislative changes and is potentially a
long-term strategy. This driving force can potentially become the tipping point for
the use of care management for the uninsured.
4.4.3 Healthcare Delivery Failure: The Need for Care
Management
Managed care aside, the healthcare delivery system is not a system at all.
It never has been, although the Kaiser system comes closest to being a “system”.
Under fee-for-service reimbursement, providers had little incentive to look beyond
the services they billed. Under managed care, the theory is that health plans
create delivery systems from which enrolled patients receive services. Health
plans do enter into contracts with a wide spectrum of healthcare organizations
representing the gamut of services required to meet managed care contract
obligations. However, market mechanisms are designed to ration healthcare
services either through limits on coverage or the absence of coverage; the result is
inequities in health services and health outcomes.
Populations with chronic conditions are the first to experience deficiencies
in service delivery systems. Deficiencies are the result of irregular or incomplete
assessments or inadequate follow-up, failures in self-management, the omission of
effective interventions or commission of ineffective ones, and ignored or poorly
managed behavioral and psychosocial conditions. The consequences are
avoidable use of resources or preventable outcomes.
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American business understands that quality improvement activities and
cost containment are related. In healthcare there is a growing awareness that
methods of care by physicians vary drastically, even when treating the same
conditions. Standardizing care to avoid deficiencies in the delivery of routine care
and to prevent the use of unnecessary resources or preventable outcomes is good
business practice. As important is an understanding that providers are not able to
meet the educational, behavioral, and psychosocial needs of patients with complex
or chronic conditions.
The literature also holds convincing evidence on the potential of the market
to increase quality, efficiency, and accountability to patients. Disease
management programs, one form of care management, are an example of a
market response to poor outcomes for the chronically ill. The success of disease
management programs developed a cottage industry with advocates claiming
dramatic reductions in Emergency Department visits and other medical expenses
by 40 to 50 percent. MCOs readily adopt programs that decrease unnecessary
hospitalization and emergency care.
State Medicaid agencies subject to public accountability and sensitive to
public opinion also have an interest in gathering performance-based data to
account for public expenditures and outcomes. States with Medicaid managed
care are beginning to experiment with chronic care disease management models
that combine fee-for-service attributes with at-risk managed care contracts for
high-cost, high-volume diseases such as HIV/AIDS, heart failure, high-risk
pregnancy, asthma, diabetes, and hemophilia. Risk-based systems give
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purchasers the ability to shift risk to providers and to create incentives for
prevention, primary care, care coordination, and more cost-conscious care
delivery. Other motivations include an emerging recognition that consumers and
public and private purchasers are not getting the care they pay for and are having
increasing concern with quality. Watchdog groups like Foundation for
Accountability (FAACT) serve to draw public attention to poor results from market
mechanisms. Large employers, primarily through National Council of Quality
Assurance and Joint Commission for the Accreditation of Health Organizations
through accreditation standards, support attention to outcomes.
Medicaid managed care contracts have become vehicles with which state
agencies as well as other purchasers are redesigning healthcare delivery.
Through risk contracts and market competition Medicaid programs, similar to other
purchasers, are adopting quality measures and standards for prevention and early
intervention, and requiring health plans and, in turn providers, to monitor patient
satisfaction, implement clinical guidelines and pathways and other measures.
Through health plans, providers are required to manage within per capita
payments to both control costs and achieve better outcomes for enrolled
populations. In these arrangements safety-net health plans take on special roles
as a principal-agent for the state and/or safety-net providers. In the former, the
state (i.e., principal) delegates purchasing responsibility to health plans (i.e.,
agent) and health plans (i.e., principal) delegate delivery responsibilities to
providers (i.e., agents). A driving force, although not necessarily for care
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management, is that the viability of safety-net providers is important to the success
of safety-net health plans which are also dependent on Medicaid funding.
In addition, improvements in quality and deterrence of advance disease
through patient education and awareness are impressive and are supported by a
growing movement among the chronically ill to reclaim their role as primary
caregivers; these healthcare consumers want an increased emphasis on patient
education and teaching patients to self-manage their health conditions. The
movement to self-management is a force for care management.
In terms of business practices, safety-net providers are working with MCOs
and entering into at-risk contracts. Accepting managed care contracts brings new
contractual obligations for population-based health maintenance and preventive
care and exposure to cost control incentives. Success with these contract
requirements is important to retaining Medicaid beneficiaries and creating an
image of being comparable to other providers. These are strong driving forces for
care management as discussed below.
Table 4-5 presents driving forces from the health industry domain, including
care management. The strongest driving forces are related to at-risk contracts
and competition. At-risk contracts create driving forces to comply with contract
requirements. Managed care contracts include provisions for patient satisfaction,
disease prevention, and quality measures as well as specific care management
components such as clinical pathways and disease management. Managed care
contracts aligned with care management components are a strong driving force for
care management. The emphasis on quality and accountability is also a strong
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force for care management and may help safety-net organizations counter their
images of being providers of last resort. Once programs are established, there are
driving forces to use these programs for the uninsured because separate systems
are not functional and because of the enduring values of social justice and equality
held by safety-net providers. With competition there are a number of driving forces
related to being able to attract patients via amenities, perceptions of quality and
responding to consumer demands. A driving force supporting care management is
that these programs provide overt examples that patients can experience that
safety-net providers are concerned with quality and health outcomes.
Table 4-5
Force Field Model—Health Industry Domain
Driving Forces
Hea lth Industry
D-10 Medicaid eligibility is transient for low-income uninsured—SNPs need to retain
this population when they have coverage.
D-11 At-risk contracts have financial incentives to control cost and emphasize
preventive care.
D-12 Medicaid managed care patients have provider options other than SNPs.
D-13 To retain Medicaid managed care patients, SNPs must provide the same
amenities and services as non-SNP.
D-14 SNPs can use special medical services (bum unit, NICU) to draw paying patients
as well as the uninsured.
Table continues next page
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Table 4-5 (Continued)
Force Field Model—Health Industry Domain
Driving Forces
Health Industry
D-15 Public/consumer perceptions of comparable quality is critical in a market
environment.
D-16 Medicaid managed care market share depends on patient satisfaction and
perceptions of quality.
I-32 To save cost, SNPs teach patients to self-manage their medical conditions and
work to change health behaviors.
I-33 Managed care presents opportunities related to quality assurance and reporting
requirements.
I-34 Consumers are demanding low-cost, high quality health care products and
services.
I-35 SNPs need to focus cost control and to deliver effective and efficient health care
services.
I-36 SNPs are using clinical pathways to standardize care for Medicaid populations
and they apply these to the uninsured as well.
4.5 Healthcare Economics and Medicaid Managed Care
The force field analysis focuses on driving forces because the purpose of
this study is to understand why safety-net providers would use care management
when these programs increase demand for care and require additional
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expenditures for clinical and administrative resources. Under managed care, the
health industry adopts a competitive price-based business environment where
healthcare reimbursement is tied to insured individuals. Uncompensated care for
the uninsured is a barrier to healthcare generally and an overriding and dominant
restraining force to care management for the uninsured. Restraining forces in the
safety-net environment emerge from the business environment as well as the
human side of organizations. There are also economic implications present in
social and political forces that influence safety-net providers. In this section
restraining forces from these influences are discussed.
4.5.1 Price-Based Business Environment
As Medicaid programs adopt a price-based business environment with
managed care, the ecosystem of funding for safety-net providers is fundamentally
changed. Managed care applied to the Medicaid program affects safety-net
providers by (a) linking program dollars to insured individuals, (b) introducing
competition for the Medicaid populations by attracting non-safety-net providers to
the Medicaid market, (c) destabilizing subsidy programs for the uninsured, and (d)
adopting financial incentives that shift patients and revenues away from more
costly safety-net providers. With managed care, safety-net providers lose both
Medicaid revenues and the subsidies embedded to care for the uninsured when
Medicaid beneficiaries seek care outside the safety-net. For hospitals, the loss of
Medicaid market share decreases the DSH funding pool available for core safety-
net providers; annual allotments paid to safety-net hospitals in subsidies. For
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CHCs with cost-based reimbursement, loss of market share reduces overall
patient revenues. The strong driving forces from these dynamics are (a) to use
market strategies to attract and retain Medicaid beneficiaries, (b) to collaborate
with health plans and MCOs, and (c) to become competitive, possibly by adopting
care management programs.
These economic forces dictate how safety-net organizations respond and
contribute to both driving and restraining forces. Together these forces erode the
funding base with which care for the uninsured is cross subsidized and create
extraordinary pressures against expending resources on the uninsured. The price-
based business environment creates restraining forces discouraging serving the
uninsured or expending additional resources for care management. Restraining
forces related to economic factors include opportunity costs, fixed budgets, and
nuances of funding. For example, DSH subsidy formulas are based on inpatient
days. If the number of inpatient days goes down, subsidies are less. This
reduction of subsidies creates restraining forces for care management’s goal to
reduce hospital use.
Care management as a business strategy also directly creates restraining
forces with adverse selection and identifies gaps in the health delivery system.
First, because care management programs are designed to serve complex care
needs, these programs attract populations with high cost and high medical care
resource needs, a condition referred to as adverse selection. Second, care
pathways and patient tracking systems combine to define proper care and to
identify when patients are not receiving optimal care. Care management programs
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enable providers to identify failed compliance and to leam why. In the case of the
uninsured, failed compliance is often due to lack of money. For example,
medications prescribed are not purchased, or specialist or diagnostic
appointments are not kept because of lack of funds. Both of these anomalies
require additional expenditure of time and/or money.
There are also other economic forces such as administrative burden,
increased workload, and training issues that function as restraining forces.
4.5.2 Political and Social Restraining Forces
The healthcare system is one of the most sensitive social barometers.
What occurs in the larger society can be expected to occur with at least equal
force in healthcare (Friedman, 1994). The organizational structures of safety-net
organizations and their local funding base also contribute political and social
forces. The discussion on organizational structures will not be repeated here. The
problem of the uninsured is partly a problem of political will and social values. For
safety-net providers the restraining forces that arise for care management are
related to their funding base and the social consciousness behind these funds.
These forces include a complex array of political influences and social values that
can only be touched on superficially in this study. One example of political and
social factors in the health care environment is the phenomena of health
disparities.
Health disparities research has found that being a member of a minority
group can, in and of itself, constitute a barrier to access. What accounts for these
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disparities is still not well understood, but they provide evidence that there are
social and political restraining forces at work in health care in general. Because of
the high number of uninsured minorities, these forces are central to the question of
health access for the uninsured. Because safety-net organizations sen/e large
numbers of immigrants and minority populations, these forces are at play in safety-
net organizations. These restraining forces include racism and anti-immigrant
attitudes and values and less willingness of the body politic to commit public funds
for these populations. These forces also join a complex set of influences related to
safety-net organizations as providers of last resort. The role of providers of last
resort is a strong restraining force in a price-based business environment.
4.5.3 Human Resource Restraining Forces
Typical of most organizations, safety-net providers are faced with human
resource challenges. Care management programs introduce a radical change in
orientations to care delivery; for example, away from episodic care to thinking
about care as a continuum, and away from a single person focus to a population-
based focus. These programs also require proactive and anticipatory practices
that require workers to be initiators and forward looking, and require a reordering
of work process and mindsets that are titanic in nature. This challenge is made
more difficult in an environment of resource constraints. Restraining forces from
the human side of organizations include a broad array of behaviors resistant to
change and learning and an absence of willingness and vision on the part of
employees in safety-net organizations.
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Because the primary focus of this research has been to set forth the
business case for care management by safety-net providers, the preponderance of
research effort has been directed to driving forces; therefore, this discussion of
restraining forces is limited. An effort similar to the treatment of driving forces in
this dissertation is merited for restraining forces.
Table 4-6 shows the restraining forces in various areas of care
management.
Table 4-6
Business Case for Care Management
Restraining Forces
Economic
R -1 Opportunity costs— there are other organizational needs that compete for limited
funds.
R-2 Seeing uninsured represents higher levels of uncompensated care.
R-3 For hospitals, current policy based subsidies are based on inpatient care.
R-4 Fixed budgets make funding these program elements difficult.
R-5 Adverse selection— these programs attract higher cost patients.
R-6 Continuing care responsibilities that come with patient-provider relationships.
R 7 Pathways and care monitoring identify system gaps that become new
responsibilities.
R-8 Care management increase administrative burden and increase overhead cost.
Table continues next page
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Table 4-6 (Continued)
Business Case for Care Management
Restraining Forces
Political and Social
R-9 Racism and anti-immigrant mentality have influences that are not well understood.
R-10 Cost containment mentality of the body politic—particularly for undeserving
populations.
R-11 Provider of last resort image assumes a social contract for some undesirables.
Human Resources
R-12 CM programs increased workload—require more primary care visit; preventive
services.
R-13 Guidelines and pathways threaten provider autonomy, leads to resistance to
change.
R-14 SNP are overwhelmed organizations due to high demand and limited resources.
4.6 Model Subject Experts
The utility of the Force Field Analysis Model is in reducing complex
environments to manageable and meaningful simplicity. This analysis describes
the complexity that comes with safety-net organizations. Through the analysis,
thirty-six driving forces are identified as supporting care management for the
uninsured and fourteen restraining forces work against implementation of these
programs. Driving forces are conceptualized as drivers and incentives to further
understand the push and pull relationships of these driving forces. The analysis
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also supports the structural bias created by managed care economics regarding
the primary factor posited as a restraining force; costs. Costs dominate provider
decisions broadly, and provision of care for the uninsured specifically.
The analysis also facilitates refinement and modification of the theorized
business case. To achieve another level of refinement the of the thirty-six driving
forces identified through the force field analysis are sent to eight leaders in
healthcare delivery and academia for comment. These reviewers drawn from
safety-net organizations, academic centers, policy researchers and regulators as
well as not-for-profit associations concerned with the uninsured and the safety-net
are referred to as Model Subject Experts (MSEs). An early draft of drivers and
incentives was sent via email to MSEs. MSEs were asked for their critique and
agreement that these statements are sources of influence or considerations for
safety-net providers and their decisions to operate care management programs for
the uninsured. MSE received the study purpose and premise as background.
Comments and suggestions received from the MSEs are incorporated in
the final set of Drivers and Incentives used for the Force Field Model or are
addressed in the comments that follow. One expert suggested examining the data
from a rural-urban perspective, and another cautioned about general statements
that are true for some regions of the country but not others. Another noted that
County Safety-net Providers may be concentrating on care for adults and
chronically ill where there is no Medicaid managed care, as is the case in most
California counties. MSEs also suggested that many safety-net providers serve
immigrant communities with limited access to Medicaid. As a result, these
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providers may not be exposed to managed care influences and may be less
inclined to use care management for the uninsured. Another MSE suggested that
many of the Medicaid beneficiaries (mostly mothers and children), looking for
private-sector provider options, have already left safety-net providers. As a result,
retaining the Medicaid market may be an uphill battle for these providers. The
comments provided by MSEs were incorporated into the force field analysis.
4.8 Next Chapter Preview
In the next chapter interviews of safety-net providers who are using care
management for the uninsured are used for a content analysis. The Content
Analysis serves to further refine the theoretical business case and to ascertain
whether the forces theorized were considerations in the decisions of the twenty-
two safety-net providers using care management for the uninsured. The results
are presented in the next chapter.
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Chapter 5
Co n ten t A nalysis Results
5.1 Introduction
Safety-net providers are using care management for the uninsured even
though these programs increase demand for safety-net services, require additional
expenditures to serve a population unable to pay for care, and have the potential
for adverse selection.6 In this chapter, the objective is to leam from safety-net
providers the rationale behind their decisions to implement care management
programs and use them for the uninsured. Underlying the work is the assumption
that strategic plans and business plans reflect business realities and that safety-
net providers using care management for the uninsured have concluded that at
least a potential business case exists for implementing these programs.
The objective of the Content Analysis is to leam whether the driving and
restraining forces hypothesized in the Force Field Model are considerations in the
development and operation of care management programs for the uninsured and
Adverse selection is an insurance industry term describing conditions where higher risk and
potentially higher cost participants are attracted into a risk pool, adversely affect the economics
of the pool.
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to better understand whether or not managed care is introducing influences in the
healthcare industry that may support the business case for care management for
the uninsured. The analysis consists of assessing the frequency with which
theorized driving forces conceptualized as Drivers and Incentives are mentioned in
these interviews and whether these forces are sufficient to counter the disincentive
of uncompensated cost of caring for the uninsured as a major restraining force.
This chapter presents the results of the Content Analysis and includes
observations made by MSE when they reviewed the driving forces proposed for
this analysis. The analysis examines driving forces conceptualized as drivers and
incentives as a means to better understand the push-pull of specific driving forces.
The sources for the Content Analysis include (a) fourteen Case Management
Subject Experts (CMSE) interviews, (b) twenty-two Study Site telephone surveys
of safety-net providers with care management programs for the uninsured, and (c)
six Case Studies of study participants. For each of these sets of interview notes
the results present Drivers and Incentives mentioned in the interview notes and the
Drivers and Incentives not mentioned. By examining driving forces not mentioned,
inconsistencies or anomalies can be recorded. CMSE interview results are
presented first, followed by interviews for the twenty-two study sites. An overview
description of the types of providers included in the study is set forth to provide a
better understanding of the safety-net organizations in the analysis. The study
sites include three types of safety-net providers: hospital systems, health centers,
and health plans. These results are examined for differences among provider
types as well as for Drivers and Incentives not mentioned. Concepts or rationales
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that safety-net providers gave during these interviews, not reflected in the force
field model, are also reported. A subset of the study sites, the case study sites are
examined separately and these results are compared with all sites by provider
type. Because these sites are examined in more detail, individual descriptions are
provided. Finally, the results of all groups are compared.
In addition to the content analysis, a word count of key words was
conducted. These results and a discussion of the limitations of the Content
Analysis conclude the chapter. Before discussing the Content Analysis results, a
brief overview of the driving and restraining forces identified through the force field
analysis is provided.
5.2 Driving and Restraining Forces Reviewed
The Force Field Analysis Model (Lewin 1969) facilitates relevant factors
leading toward a desired goal or state, in this case implementation of care
management programs for the uninsured, to be organized and systematically
analyzed. Relevant factors or influences are conceived as both restraining and
driving forces arrayed against each other within the context of an organization.
Driving forces in Force Field Analysis Model represent the factors that support the
targeted change, and restraining forces are barriers to the change. In this analysis
driving forces are conceived as both drivers and incentives that influence
organizational decisions. The term “drivers" refers to forces that push, propel, or
press onward and “incentives" pull or prompt action toward a change due fear of
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punishment or as an expectation of reward. By analyzing driving forces as drivers
and incentives in an organization, the push-pull effect of forces can be better
understood.
Chapter 4 presents a force field analysis that examines four domains to
identify driving and restraining forces in the organizational and environmental
context of safety-net organizations. The force field analysis concludes with a
Force Field Model with thirty-six driving forces, sixteen Drivers and twenty
Incentives. One factor is posited as a restraining force: cost. The force field
analysis focuses on driving forces because care management increases demand
for care and requires expenditures for additional clinical and administrative
resources. In a competitive price-based business environment, uncompensated
care for the uninsured is a barrier to health care generally and an overriding and
dominant restraining force to care management for the uninsured.
These forces are arranged by domain in a force field model in the following
table (Table 5-1). Because the Content Analysis examined driving forces as
Drivers (Table 5-2) and Incentives (Table 5-3), these are presented in separate
tables for the ease of readers.
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Table 5-1
Force Field Model
Driving Forces
Uninsured
D -1 Uninsured present for care with more advanced disease and preventable
conditions.
D-2 Uninsured gain access through the emergency department, which is more
costly.
I-28 Uninsured go in and out of public and private health insurance programs.
Safety-Net Providers
D-3 Core safety-net providers are the last refuge for the uninsured and have higher
uncompensated care.
D-4 Once the acutely ill patients present, SNPs must treat them.
D-7 SNPs that are also academic medical centers have educational requirements
that caring for the uninsured help to meet.
1 -1 7 SNPs are mission driven, established to serve a community.
1 -1 8 SNPs see themselves as a community resource as well as a business.
1 -1 9 For some SNPs, their governance structure requires them to be more
responsive to their local community.
I-20 SNPs are located in medically underserved areas, which contributes to a
social justice agenda.
1 -2 1 SNPs rely on local community support, which increases expectations to
provide access to care.
I-23 SNPs provide non-medical services (transportation, translation, child care, and
outreach) for the Medicaid population and offer these to the uninsured to
spread out sunk cost.
Table continues next page
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Table 5-1 (Continued)
Force Field Model
Driving Forces
Safety-Net Providers (Continued)
1-26 SNPs are experienced in caring for complex patients with medical and non
medical needs.
1-2 7 SNPs incur the cost of deteriorated health for preventable conditions that result
from limited access/care.
1-2 9 Government-owned SNPs, as deep pockets, have a higher degree of legal
exposure for negative outcomes.
1 -3 0 SNPs are predisposed to fill gaps in care and seek ways to create programs to
get patients what they need.
1 -3 1 SNPs are oriented to behavioral and social issues because they serve hard-to-
treat homeless, substance-abusing and mentally ill patients.
Safety-Net F u n d in g
D-5 SNPs face increased accountability when they receive grants or public funds.
D-6 SNPs receiving tax subsidies face higher expectations to serve everyone,
irrespective of ability to pay.
D-8 Medicaid funding is the backbone of the safety-net and linked to subsidies for
the uninsured.
D-9 Loss of Medicaid funding reduces SNP's ability to financially survive and to
cross-subsidize care for the uninsured.
I-22 SNPs rely on grant funds to care for the uninsured.
I-24 Federal, state, and local grants enable SNPs to gain market share dominance
in market niches.
I-25 Cost-based reimbursement allows CHC's to hire support staff (e.g., case
managers, health education, etc.) which can be used to support Care
Management programs.
Table continues next page
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Table 5-1 (Continued)
Force Field Model
Driving Forces
Health Industry
D-10 Medicaid eligibility is transient for low-income uninsured—SNPs need to retain
this population when they have coverage.
D-11 At-risk contracts have financial incentives to control cost and emphasize
preventive care.
D-12 Medicaid managed care patients have provider options other than SNPs.
D-13 To retain Medicaid managed care patients, SNPs must provide the same
amenities and services as non-SNPs.
D-14 SNPs can use special medical services (bum unit, NICU) to draw paying
patients as well as the uninsured.
D-15 Public/consumer perceptions of comparable quality is critical in a market
environment.
D-16 Medicaid managed care market share depends on patient satisfaction and
perceptions of quality.
I-32 To save cost, SNPs teach patients to self-manage their medical conditions and
work to change health behaviors.
I-33 Managed care presents opportunities related to quality assurance and
reporting requirements.
I-34 Consumers are demanding low-cost, high quality health care products and
services.
I-35 SNPs need to focus cost control and to deliver effective and efficient health
care services.
I-36 SNPs are using clinical pathways to standardize care for Medicaid populations
and they apply these to the uninsured as well.
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5.2.1 Restraining Forces
The U.S. healthcare system is a competitive, price-based system with
financial structures that link healthcare dollars to insured individuals. Public and
private purchasers are highly price sensitive (Mann et al. 1997) seeking fixed-
price, managed care contracts for defined populations (Fishman and Bentley
1997). In addition, financial pressures and utilization control measures associated
with managed care reduce opportunities to cross-subsidize the care of the
uninsured. These conditions make the uninsured undesirable in the market place.
Although economic restraining forces are the most evident and significant
in a business case analysis, there are other social and political forces as well as
workforce and human influences that function as restraining forces. Among
economic restraining forces, uncompensated cost of care for the uninsured is the
most significant restraining force working against the business case for care
management. A variety of other economic drivers function as restraining forces
upon safety-net providers such as opportunity costs and incurring new financial
liabilities from these programs. In addition to economic forces, there are social,
political and human resource forces that serve as restraining forces working
against care management programs. Restraining forces are as complex as driving
forces. However, because of the challenge of examining both driving and
restraining forces in detail and the weight of changes introduced by managed care
economics, which are redirecting the flow of healthcare dollars, this Content
Analysis focuses on driving forces.
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5.2.2 Drivers as Driving Forces
Sixteen driving forces are noted that motivate safety-net providers to adopt
care management strategies for the uninsured. Drivers are presented in Table 5-
2. Drivers include conditions that exist as a result of the characteristics or care-
seeking behaviors of the uninsured, such as Driver 1 and 2; characteristics of
safety-net providers (Drivers 3,4, and 7) and their funding streams (Drivers 5, 6, 8,
and 9); the health industry, its financial structures (Drivers 10 through 16) with two
specific market dynamics present as a result of managed care (Drivers 12 and 13).
Table 5-2
Driving Forces that Push—Drivers
Drivers
1 Uninsured present for care with more advanced disease and preventable conditions.
2 Uninsured gain access through the emergency department, which is more costly.
3 Core safety-net providers are the last refuge for the uninsured and have higher
uncompensated care.
4 Once the acutely ill patients present, SNPs must treat them.
5 SNPs face increased accountability when they receive grants or public funds.
6 SNPs receiving tax subsidies face higher expectations to serve everyone, irrespective of
ability to pay.
7 SNPs that are also academic medical centers have educational requirements that caring
for the uninsured help to meet.
Table continues next page
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Table 5-2 Continued)
Driving Forces that Push—Drivers
Drivers
8 Medicaid funding is the backbone of the safety-net and linked to subsidies for the
uninsured.
9 Loss of Medicaid funding reduces SNP’s ability to financially survive and to cross-subsidize
care for the uninsured.
10 Medicaid eligibility is transient for low-income uninsured—SNPs need to retain this
population when they have coverage.
1 1 At-risk contracts have financial Incentives to control cost and emphasize preventive care.
12 Medicaid managed care patients have provider options other than SNPs.
13 To retain Medicaid managed care patients, SNPs must provide the same amenities and
sen/ices as non-SNPs.
14 SNPs can use special medical services (bum unit, NICU) to draw paying patients as well
as the uninsured.
15 Public/consumer perceptions of comparable quality are critical in a market environment.
16 Medicaid managed care market share depends on patient satisfaction and perceptions of
quality.
5.2.3 Incentives as Driving Forces
Similar to Drivers, twenty Incentives are theorized as conditions or
elements that present a rationale for safety-net providers to invest in care
management programs for the uninsured. See Table 5-3 (Driving Forces that
Pull—Incentives). Incentives are numbered consecutively, with eleven (17 through
21, 23, 26, 27, 29, 30, and 31) related to characteristics of safety-net providers;
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three to their funding streams (Incentives 22, 24, and 25) as well as five Incentives
(32 through 36) related to conditions within the health industry, managed care and
market dynamics. Also, one Incentive is related to the behavior of the uninsured
(Incentive 28).
Table 5-3
Driving Forces that Pull—Incentives
Incentives
17 SNPs are mission driven, established to serve a community.
18 SNPs see themselves as a community resource as well as a business.
19 For some SNPs, their governance structure requires them to be more responsive to their
local community.
20 SNPs are located in medically underserved areas, which contributes to a social justice
agenda.
21 SNPs rely on local community support, which increases expectations to provide access to
care.
22 SNPs rely on grant funds to care for the uninsured.
23 SNPs provide non-medical services (transportation, translation, child care and outreach) for
the Medicaid population and offer these to the uninsured to spread out sunk costs.
24 Federal, state, and local grants enable SNPs to gain market share dominance in market
niches.
25 Cost-based reimbursement allows CHC's to hire support staff (e.g., case managers, health
education, etc.), which can be used to support Care Management programs.
26 SNPs are experienced in caring for complex patients with medical and non-medical needs.
Table continues next page
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Table 5-3 (Continued)
Driving Forces that Pull—Incentives
Incentives
27 SNPs incur the cost of deteriorated health for preventable conditions that result from limited
access/care.
28 Uninsured go in and out of public and private health insurance programs.
29 Government-owned SNPs, as deep pockets, have a higher degree of legal exposure for
negative outcomes.
30 SNPs are predisposed to fill gaps in care and seek ways to create programs to get patients
what they need.
31 SNPs are oriented to behavioral and social issues because they serve hard-to-treat
homeless, substance abusing and mentally ill patients.
32 To save costs, SNPs teach patients to self-manage their medical conditions and work to
change health behaviors.
33 Managed care presents opportunities related to quality assurance and reporting
requirements.
34 Consumers are demanding low-cost, high quality healthcare products and services.
35 SNPs need to focus on cost control and to deliver effective and efficient healthcare services.
36 SNPs are using clinical pathways to standardize care for Medicaid populations and they
apply these to the uninsured as well.
5.3 Analysis of Interview Notes
The interviews used in this analysis were collected as part of a project
funded by the Robert Wood Johnson Foundation (RWJ). RWJ commissioned The
Lewin Group to determine whether safety-net providers are using care
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management strategies for the uninsured.7 The purpose of the RWJ project was
to leam whether safety-net providers are using care management for the
uninsured and to develop a tool kit to help facilitate replication of those programs
which are.
The analysis consists of a study of interview notes to count the frequency
with which theorized driving forces from the force field model, categorized as
Drivers and Incentives, are mentioned in the interviews. Driving forces are
conceptualized as drivers and incentives provide a means to better understand the
push-pull of forces that are supportive of care management.
An Excel spreadsheet listing the sixteen Drivers and twenty Incentives is
used for the Content Analysis to allow tabulation of drivers and incentives
mentioned by study site and CMSEs. The analysis looked for Drivers and
Incentives mentioned in the interview notes and the Drivers and Incentives not
mentioned. Tabulations were organized by type of providers and case study as
well as for all study sites to enable comparisons of different types of study sites.
The interview notes were also examined to learn (a) whether these forces
are sufficient to counter the disincentive of uncompensated cost of caring for the
uninsured as a restraining force, (b) whether or not managed care is introducing
influences in the healthcare industry that may support the business case for care
management for the uninsured, and (c) to identify other forces or factors that are
given as explanations for implementing care management programs and using
7 The writer was Senior Manager with The Lewin Group and Project Manager for this study.
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them for the uninsured. Concepts or rationales that safety-net providers gave
during these interviews, not reflected in the force field model, are also noted.
The sources for the Content Analysis included (a) fourteen Case
Management Subject Experts (CMSE) interviews, (b) twenty-two Study Site
telephone surveys of safety-net providers with care management programs for the
uninsured, and (c) six Case Studies of study participants.
The CMSE interview results are presented first, followed by interviews for
the twenty-two study sites. The study sites are reported by type of provider:
hospital systems, health centers, and health plans. These results are examined
for differences among provider types as well as for Drivers and Incentives not
mentioned. Results from case study site interviews, a subset of the study sites,
are reported separately; these results are compared with all sites and by provider
type. Finally, the results of all groups are compared.
5.3.1 Analysis of Care Management: Subject Expert
Interviews (CMSEs)
Although the primary focus for the Content Analysis is the study site
interviews, the one-hour interviews with thirteen of the fourteen CMSEs are also
examined to determine whether Drivers or Incentives are mentioned by these
experts to support the work they are doing. Because this study looks at the
domains of the uninsured, the safety-net and care management, subject experts
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included researchers, policymakers, and providers associations, from across the
country. The fourteen CMSEs interviewed included the following:
• experts from organizations dedicated to working with safety-net
providers or working to advance understanding of chronic care, and
care management;
• those with a focus on healthcare quality or those conducting research
concerning the uninsured, quality, chronic care or care management;
• individuals supporting the adoption of quality or care management
programs in safety-net organizations.
Many informants, when asked, did not know whether safety-net providers
are using care management for the uninsured. As a result, and because of the
experience of the experts interviewed, many of these interviews had a narrow or
single focus, concentrating on the experts’ particular area of expertise. For
example, one researcher could speak only on the demographics and care-seeking
behavior of the uninsured, while another limited his comments to recent study
results of protective strategies for the safety-net at the community level. One of
these interviews, primarily due to the focus of the interview discussion, failed to
mention any of the Drivers or Incentives and is excluded from the sample
considered here. Other CMSE interviews took a broader view because these
experts are working directly with safety-net providers to design and implement
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chronic care or care management programs, primarily for insured or Medicare or
Medicaid populations.
The results of the analysis of these one-hour interviews, in terms of
whether Drivers and Incentives are mentioned during the interviews, are presented
below. Results are tabulated for Drivers and Incentives mentioned as well as
those not mentioned. Incentives mentioned during the interviews are presented
first, followed by Drivers Mentioned, and then Incentives or Drivers Not Mentioned
at all. In presenting results, Drivers and Incentives statements included in Tables
5-2 and 5-3, respectively, are listed in italics and underlined with the number from
the statement model in parenthesis. For example, Driver 1 is Uninsured present
for care with more advanced disease and preventable conditions [ 1).
5.3.1.1 Drivers and Incentives Mentioned by CMSE
Table 5-4 (Driving Forces Mentioned in CMSE Interviews) reports
Incentives and Drivers mentioned during CMSE interviews. The table presents the
number of interviews that mention each Driver and the percent of total interviews.
The results presented are for thirteen CMSE interviews. (One interview was
eliminated from the results because Drivers and Incentives were not discussed.)
Overall, nearly half (46 percent) of the CMSE interviews mentioned three
Drivers and five Incentives. The percentage of total interviews is based on thirteen
interviews. The Drivers mentioned are the following: Uninsured present for care
with more advanced disease and preventable conditions (1); Once the acutely ill
patients present at safetv-net sites. SNPs must treat them (4); and At-risk
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contracts have financial Incentives to control cost and emphasize preventive care
(11). Each of these statements, respectively, is related to the characteristics of the
uninsured, those of safety-net providers, and the financial structure o f the health
industry.
Table 5-4
Driving Forces Mentioned in CMSE Interviews
Drivers In centives
Frequency %
Frequency %
1 7 54 17 6 46
4 8 62 27
6
46
11 9 69 28 8 62
32 8 62
35 6 46
The five Incentives mentioned in these interviews are
1. SNPs are mission driven, established to serve a community (17).
2. SNPs incur the cost of deteriorated health for preventable conditions
that result from limited access/care (27).
3. Uninsured go in and out of public and private health insurance
programs (28).
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4. To save cost. SNPs teach patients to self-manaae their medical
conditions and work to change health behaviors (32).
5. SNPs need to focus on cost control and to deliver effective and efficient
healthcare sen/ices (35).
One each, Driver (1) and Incentive (28) mentioned in CMSE interviews, is
related to the characteristics of the uninsured; namely, the uninsured tend to
present with preventable health conditions and the problems related to
discontinuity of healthcare coverage. CMSE also mentioned one Driver (4) and
two Incentives (17 and 27) related to the characteristics of safety-net providers;
namely, safety-net providers are mission driven, strategically positioned to care for
the uninsured and that the uninsured depend on this group of providers for their
care. Factors related to the health industry are also mentioned: Driver 11. Two
Incentives (32 and 35) refer to strategies safety-net providers use, and Driver 1 1
suggests pressures requiring competitiveness.
5.3.1.2 Drivers and Incentives Not Mentioned by the CMSEs
Among this group, five of the Drivers (6, 7, 14, 15, and 16) and seven of
the Incentives (19, 22, 23, 24, 29, 31, and 33) were not mentioned at all during the
interviews. See Table 5-5 (Driving Forces Not Mentioned by CMSE). These
Drivers and Incentives are primarily related to the characteristics of safety-net
providers, factors within the health industry and to a lesser extent, safety-net
provider funding streams.
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There are several reasons why many Drivers and Incentives may not have
been mentioned. As discussed earlier, many interviews are concentrated on the
informant’s area of expertise and some of these Drivers and Incentives point to
specific conditions that may require direct knowledge of certain type of safety-net
provider organizations. For example, Driver 7 suggests that academic medical
centers with program requirements for medical training that require complex
medical conditions or large numbers of patients may have motivations that
contribute to the development of these programs, while Incentive 19 suggests
governance structures are influencing factors. In addition, the interviews are
designed primarily to elicit information about the current state of knowledge on the
problems of the uninsured, the safety-net, and care management. As a result,
common factors such as safety-net characteristics may not have had an
opportunity to surface during these discussions.
Although it is important to note the absence of these Drivers and Incentives
in the discussion, caution is warranted in any attempt to interpret what this may
mean because of the complex and diverse nature of safety-net provider settings.
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Table 5-5
Driving Forces Not Mentioned by CMSE
Drivers Incentives
6 SNPs receiving tax subsidies face
higher expectations to serve
everyone, irrespective of ability to
pay
19 For some SNPs, their governance
structure requires them to be more
responsive to their local community.
7 SNPs that are also academic medical
centers have educational
requirements that caring for the
uninsured help to meet.
22 SNPs rely on grant funds to care for
the uninsured.
14 SNPs can use special medical
services (bum unit, NICU) to draw
paying patients as well as the
uninsured.
23 SNPs provide non-medical services
(transportation, translation, child care
and outreach) for the Medicaid
population and offer these to the
uninsured to spread out sunk cost.
15 Public/consumer perceptions of
comparable quality is critical in a
market environment.
24 Federal, state, and local grants enable
SNPs to gain market share dominance
in market niches.
16 Medicaid managed care market
share depends on patient satisfaction
and perceptions of quality.
29 Government-owned SNPs, as deep
pockets, have a higher degree of legal
exposure for negative outcomes.
3 1 SNPs are oriented to behavioral and
social issues because they serve hard-
to-treat homeless, substance abusing
and mentally ill patients.
33 Managed care presents opportunities
related to quality assurance and
reporting requirements
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5.3.2 Analysis of Study Site Responses
The interviews with twenty-two safety-net providers operating care
management programs are the primary focus of this analysis. The interviews
provide an understanding of the genesis for the care management programs
implemented by study sites, to leam the impetus for their development as well as
the business rationale behind these programs. Interviewees are also asked about
barriers, facilitators, and potential for replication, as well as about future intentions
as to whether they plan to continue the programs. Whether Drivers and Incentives
posited as driving forces are mentioned during these interviews is important to
understanding the business case for these programs.
Before discussing the results of the content analysis, the study sites are
described.
5.3.2.1 The Study Site Sample
In this section, the study sites are described as groups in terms of their
organizational type (hospitals, health centers, and health plans) as well as by the
criteria used to select the sample of programs in this study. This discussion is
followed by a presentation of the tally of Drivers/Incentives mentioned during the
90-minute survey interviews. The results are described for all sites and then
separately by provider type: hospitals, health centers, and health plans.
Twenty-two sites with care management programs serving the uninsured
and able to track utilization and costs or to collect data to determine the impacts of
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these programs were selected from a pool of 75 safety-net organizations. The
study sites selected were drawn from an initial pool of 90 programs identified
through interviews with the CMSEs. In addition to the characteristics listed above
(serve the uninsured and collect data to measure program impact), the study sites
were also chosen because they met one or more of the following criteria:
1. Programs operated by different types of safety-net providers,
2. Programs offering comprehensive care management with a focus on
multiple populations or conditions, and
3. Programs serving the Latino population and other ethnic groups with
diabetes.
The study sites chosen include a broad array of organizational
arrangements with three categories of provider type: hospitals and health systems,
community health centers, and health plans. Of the twenty-two study sites, eight
are health centers not associated with a hospital system, nine are hospital and
health systems and seven are health plans or quasi-health plans. Quasi-health
plans are defined by this study as organizations using administrative structures
similar to those of health plans to manage funds earmarked for healthcare services
for an indigent population.
Consistent with the selection criteria, at least six of the study sites have
comprehensive care management programs, are able to collect data to evaluate
program impact, and cost at least a half million dollars annually to operate. These
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sites, because of their size, scope and duration, are considered surrogates for
successful programs. Most sites studied sen/e diverse populations, and some
programs specifically target groups with cultural and language differences. Over
two-thirds of the sites targeted diabetes, including all health center sites, five of the
hospital system sites and three of the health plans.
5.3.2.1.1 Hospitals and Health Systems
Nine of the study sites are hospital systems; all have both inpatient and
ambulatory care facilities and all are linked to academic medical centers. The
hospital study sites are mostly public hospital systems and are either multi
hospitals systems or are part of a delivery system with multiple organizations such
as faculty practice plans, specialty centers and medical training programs. The
hospital sites are listed in Table 5-6 and are located in mostly urban centers,
including New York, New York; San Francisco, California; Miami, Florida; Dallas,
Texas; Atlanta Georgia; Denver, Colorado; Cleveland, Ohio as well as
Philadelphia/Springfield Pennsylvania and Mason City, Iowa.
Eight hospital sites are public hospital systems or quasi-public systems in
that they evolved from public delivery systems and retained some characteristics
of public hospitals. Three hospital systems are public hospitals owned and
operated by local governments. Publicly structured health authorities oversee two
other hospital systems. Of the two hospital sites overseen by health authorities,
one is a multiple organization system and the other includes two former hospitals
and serves two counties. Three hospital sites are multi-hospital systems, and one
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is affiliated with a religious organization. Parkland Health and Hospital System
and Jackson Health Systems were selected for site visits.
Table 5-6
Health and Hospital System Sites
Health and Hospital System Site
Bellevue Hospital, Primary Care Asthma Clinic New York, New York
Community Health Network of San Francisco, Emergency
Department High User Program
San Francisco, CA
Crozer-Keystone Health System Springfield, PA
Denver Health and Hospital System Denver, CO
Grady Health System, Model Diabetes Control Atlanta, GA
‘Jackson Health System Miami, FL
MetroHealth Medical Center Cleveland, OH
North Iowa Mercy Health Center Network Mason City, IA
‘ Parkland Health & Hospital System Dallas, TX
* Site visit/case study sites.
Most of the hospital systems in this study are large, with both inpatient and
outpatient programs, and are linked to academic medical centers. Three hospital
sites see between 430,000 to 570,000 outpatient visits each year and all hospital
sites see patients through emergency departments. Several also have Level 1
Trauma Centers.
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Despite these similarities, however, the care management programs
hosted by these hospitals and health systems vary significantly in structure and
evolution. Some hospital systems have been focused on care management for
over ten years though most have programs at least 3 years old. Half of the
hospital systems in the study had formalized programs with advanced
understanding and application of care management programs throughout the
hospital system. At least two have staff that have published articles on care
management, and at least three mentioned receiving awards or public recognition
for their programs.
The programs focused on disease specific populations as well as on hard-
to-treat populations, such as substance abusers, the mentally ill, and the
homeless. One program consisted of a single disease-focused clinic and another
focused on a single entry point—the Emergency Department. Several programs
evolved from case management programs, to patient education initiatives, to more
formal programs focused on organizational change. Funding for these programs
came from hospital revenue, especially disproportionate share funding as well as
from grants and other external funds.
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5.3.2.1.2 Community Health Centers
Table 5-7 lists the seven health centers identified for the study. All health
centers are located in urban centers and operate care management programs for
diverse uninsured populations.8
Table 5-7
Community Health Centers
Health Center Location
'Community Health Center Network Alameda, CA
'Grace Hill Neighborhood Health Centers St Louis, MO
Huntington Beach Community Clinic Huntington Beach, CA
Latino Health Access Program Santa Ana, CA
'Project Dulce San Diego, CA
Puget Sound Neighborhood Health Center Seattle, WA
South Madison Health and Family Center Madison, Wl
* Site visit/case study sites.
The health center sites vary widely in their respective structures and
objectives: one site is a free clinic subsidized by donations and volunteer medical
o
There were originally eight health centers in the study, but one was excluded because the health
center did not meet the study definition for care management.
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staff; another site is a physician practice, supplemented with physician extenders;
one other site is a comprehensive social services and health center; two additional
sites are centralized units, independent of health center operations; and five sites
are based within or linked to Federally Qualified Health Centers. Four of the study
sites are located in California, in Santa Ana and Huntington Beach in Orange
County, Oakland, and San Diego. The other three study sites are located in St,
Louis, Missouri, Madison, Wisconsin, and Seattle, Washington. Site visits were
made to three health centers: Community Health Center Network, Grace Hill
Neighborhood Health Centers and Project Dulce.
All of the health center sites focus on diabetes disease management, and
most also focus on cardiovascular disease and asthma. Two sites are specifically
focused on catering to the needs of Spanish-speaking Latinos, while three other
sites serve large numbers of Latinos, immigrants or undocumented Latinos as well
as other cultural and linguistically diverse populations. Patient education and self
management are components of care management programming at all sites.
Three of the sites have used grant funding to start-up and continue their care
management programs. All except two sites also use existing health center
revenues, including FQHC payments, donations, and other fundraising to sustain
care management activities. At least three sites have direct relationships with
hospitals or health plans that help subsidize the programs operated by these study
sites.
Two sites are centralized disease management units for two clusters of
California community health centers that are using their trade associations in the
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vital role of contract negotiation with managed care organizations. As part of an
emerging strategy, health center providers developed a managed services
organization (MSO) to serve as a “trustee” on behalf of the health center for
collective managed care contracting that is now being used to implement care
management strategies. These new umbrella organizations are assuming formal
responsibility for discrete functions to enable disparate and independent
community health centers to operate more effectively in competitive environments
and to be represented as a network. The centralized structure facilitates these two
sites to facilitate implementation of diabetes disease management strategies for
thirteen health center providers, half in Northern California and the other half in
Southern California.
5.3.2.1.3 Health Plans
Six of the study sites are health plans or quasi health plans, as described
earlier, and all are linked to local governments and local funds. Except for one, all
health plans are directly responsible for administering a fixed budget for indigent
care funded with local government funds or special sales tax. All health plans in
the study are administered by a public parent organization, such as local
departments of health, health delivery systems or health agencies (which combine
public health, health delivery, and social services programs), and local public
agencies (that join public health and university-operated health delivery systems).
The administration of one program is contracted through a consortium of local
health providers.
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Table 5-8 lists the plans in the study. The plans are all located in urban
centers, St. Louis, Missouri; Tampa, Florida; San Antonio, Texas; Indianapolis,
Indiana; Boston, Massachusetts; and Martinez, California.
Table 5-8
Health Plans
Health Plan Location
*Boston Medical Center Health Net Plan Boston, MA
CareLink San Antonio, TX
*Contra Costa Health Plan Martinez, CA
Hillsborough County Healthcare Plan Hillsborough County, FL
Saint Louis ConnectCare Health System St. Louis, MO
Wishara Advantage Indianapolis, Indiana
* Site visit/case study sites.
Several of these plans are outgrowths of strategies to redistribute indigent
funding using managed care strategies as responses to competitive managed care
markets. Most of the health plans are linked to local safety-net provider networks
and serve both uninsured indigent and Medicaid populations directly through
enrollments of both populations or indirectly through their provider networks.
Three plan sites are quasi health plans which are primarily administrative
programs with direct responsibility for the indigent care budget; these plans
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contract with local safety-net providers to deliver care. In two of these programs
no dollars are actually exchanged. These programs use accounting functions to
track expenditures and utilization, and funding distribution is determined through
budgeting processes. Two other health plans enroll Medicaid beneficiaries and
the commercially insured as well as administer the indigent care budget. The fifth
health plan is a Medicaid only health plan. Although not directly responsible for
administering the indigent care budget, this health plan uses the same delivery
network as that used for indigent patients and through this link works with safety-
net providers to develop care management capacity for the uninsured.
The care management programs for most plans began as administrative
efforts to control utilization, particularly in difficult-to-treat populations such as the
mentally ill, substance abusers, or the homeless. Most health plans also have
financial triaging functions to enroll uninsured in existing publicly funded health
coverage programs, a logical step for providers motivated by financial concerns.
Several of the health plans have seen a natural progression towards care
management programming. Initially the focus is on the administrative and financial
aspects of treating high-cost populations. Later case management programs are
added to manage social and behavioral factors. Finally, clinical pathways for
disease management programs are put in place. Three of the plans studied also
have nurse call centers offering 24-hour medical advice and timely access options.
One plan is heavily invested in pharmaceutical assistance programs; four are
involved in secondary and tertiary patient education and health promotion.
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S.3.2.2 Drivers and Incentives Mentioned Across Groups
The telephone interviews confirmed that the study sites surveyed are using
care management to care for the uninsured and that organization structure, size,
and service type present different opportunities for care management programs.
Clearly, safety-net organizations design and apply care management differently.
Overall, health centers focused on primary care have the greatest opportunity to
influence health outcomes and utilization but have the least opportunity to realize
savings from care management programs. Most care management applications
are applied in an outpatient setting while most cost savings are the result of
reduced hospitalization and emergency department use. For this reason, the
elements that comprise a business case may be different for each provider type.
With this in mind, the Content Analysis examines responses by provider
type looking for Drivers and Incentives mentioned as well as Drivers and
Incentives not mentioned. The results of this analysis are first discussed for all
sites, followed by a discussion of the differences among provider types: hospitals,
health centers, and health plans. Table 5-9 (Frequency of Mention by Study
Sites), the first of five tables in this section, presents the results for all study sites
and for each provider type.
5.3.2.2.1 Drivers
Across groups, four Drivers are mentioned in nearly all of the study sites
while two are mentioned by half of the study sites. These are explained below
(Table 5-9) in more detail. The Drivers and Incentives mentioned by all study sites
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are shown in bold in the table below and Drivers and Incentives not mentioned are
shacpd.
Three Drivers are mentioned in 95 percent of the interviews, while a fourth
is mentioned in 91 percent of the interviews. The three Drivers are
• Uninsured present for care with more advanced disease and
preventable conditions (1).
• Core safetv-net providers are the last refuge for the uninsured and have
higher uncompensated care (3).
• Once the acutely ill patients present. SNPs must treat them (4).
The fourth Driver is Uninsured gain access through the emergency
department, which is more costly (2).
High agreement exists across study sites about two characteristics: (a) that
safety-net providers are providers of last resort with special responsibility for the
uninsured and (b) that the care-seeking behaviors of the uninsured present cost
implications for safety-net providers. Combined, these drivers support the premise
that it is in the best interest of safety-net providers to provide cost-effective care for
the uninsured. Drivers 1 and 4 are also mentioned by more than half of CMSEs
interviewed.
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Table 5-9
Frequency of Mention by Study Sites
Drivers Incentives
Frequency
(22)
Health
Plans
(6)
Hospitals
(9)
Health
Centers
(7)
Frequency
(22)
Health
Plans
(9)
Hospitals
(9)
Health
Centers
(7)
1 95% 1 00% 89% 100% 17 82% 67% 78% 1 00%
2 91% 1 00% 78% 100% 18 86% 67% 89% 100%
3 95% 100% 89% 100% 19
;V
0% : ' • 0% 0%
4 95% 100% 89% 100% 20 18% 0% 11% 43%
5 36% 50% 33% 29% 2 1 23% 0% 11% 57%
6 36% 50% 56% 0% 22 59% 33% 44% 100%
7 9% 0% 11% 14% 23 77% 67% 78% 86%
8 9% 17% 11% 0% 24 18% 0% 22% 29%
9 18% 17% 22% 14% 25 - 08t . 0% 0% 0%
10 50% 67% 56% 29% 26 77% 67% 78% 86%
1 1 50% 83% 44% 29% 27 95% 100% 89% 100%
12 9% 0% 11% 14% 28 95% 83% 100% 100%
13 41% 50% 33% 43% 29 0% 0%. 0% 0%
14 0% 0% 0% 30 50% 17% 56% 71%
15 9% 0% 22%
/ ' & ' / ' / ;
31 100% 100% 100% 100%
16 18% 33% 22% 0%. 32 100% 100% 100% 100%
33 0% 0% 0%
34 0% 0% 0% 0%
35 82% 83% 89% 71%
36 73% 67% 78% 71%
Note. Bold = Drivers and Incentives mentioned by all study sites; shaded = Drivers and Incentives
not mentioned by study sites.
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The following five Drivers (5, 6, 10, 11, and 13) are mentioned by at least
one-third of the study sites.
• SNPs face increased accountability when they receive grants or public
funds (5).
• SNPs receiving tax subsidies face higher expectations to sen/e
everyone, irrespective of ability to pay (6).
• Medicaid eligibility is transient for low-income uninsured—SNPs need
to retain this population when they have coverage (10).
• At-risk contracts have financial Incentives to control cost and
emphasize preventive care (11).
• To retain Medicaid managed care patients. SNPs must provide the
same amenities and services as non-SNPs (13).
This group of Drivers focuses on the funding streams for safety-net
providers and conditions present in the health industry. Two Drivers address the
increased accountability and higher expectations that come with public funding
and grants. Two other Drivers address issues related to competition and the need
for safety-net providers to retain Medicaid patients. These four Drivers, together
with the most frequently mentioned Drivers listed above, support the general
premise that safety-net providers provide healthcare to the uninsured because of
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their missions and their accessibility to the uninsured as well as the funding base
they depend on to exist. Collectively these Drivers address the relationship
between Medicaid managed care and safety-net provider funding streams and
support the premise that managed care is placing increased emphasis on
prevention and population-based strategies and changing the economic structures
on which safety-net providers depend.
The remaining six Drivers (7, 8, 9, 12, 15, and 16) are mentioned by less
than 20 percent of the study sites.
• SNPs that are also academic medical centers have educational
requirements that caring for the uninsured help to meet 17).
• Medicaid funding is the backbone of the safetv-net and linked to
subsidies for the uninsured (8).
• Loss of Medicaid funding reduces SNP’ s ability to financially survive
and to cross-subsidize care for the uninsured 19).
• Medicaid managed care patients have provider options other than
SNPs (12).
• Public/consumer perceptions of comparable oualitv is critical in a
market environment (15).
• Medicaid managed care market share depends on patient satisfaction
and perceptions of oualitv (16).
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Overall, these six Drivers, primarily related to safety-net funding streams
and the health industry, received less attention in the study site interviews. The
poor showing of these Drivers may be a function of the interview design and
discussion focus rather than an indication of relevance. The original purpose of
the study site interviews was to provide background and detail on the care
management activities and the rationale for implementing these programs. A
ninety-minute interview may not have allowed time for sufficiently detailed
discussions on generic funding mechanisms such as Medicaid or to discuss issues
related to competition and consumer expectations. For example, one Driver in this
group is related to academic medical centers. Many study sites and all hospitals
are linked to academic medical centers. Still, only one hospital and one health
center mentioned medical training.
5.3.2.2.2 Incentives.
Twenty Incentives are included in the analysis. Four Incentives are
mentioned by nearly all of the study sites. Of these four Incentives, two (31 and
32) are mentioned by all study sites. The other two (27 and 28) are mentioned by
95 percent of the sites. These Incentives, listed below, are related to safety-net
provider characteristics, the health industry and the uninsured.
• SNPs are oriented to behavioral and social issues because they serve
hard-to-treat homeless, substance abusing and mentally ill patients
(31).
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To save costs. SNPs teach patients to self-manaae their medical
conditions and work to change health behaviors (32).
• SNPs incur the cost of deteriorated health for preventable conditions
that result from limited access/care (27).
• Uninsured go in and out of public and private health insurance
programs (28).
The Incentives with the highest agreement among study sites describe
basic characteristics of safety-net providers that they have special roles and
responsibilities with regard to the uninsured, particularly the hardest to treat.
Together, these Incentives support the premise that safety-net providers, because
they are mission driven, develop organizations to deal with behavioral and social
conditions that, if unmanaged, can result in higher operating costs. This finding
also supports the concept that cost conscious safety-net providers work to control
costs by teaching patients to self-manage their medical conditions whether they
are insured or not.
Another eight Incentives (17, 18, 22, 23, 26, 30, 35, and 36) that relate
primarily to safety-net provider characteristics are mentioned by a least half of the
study sites. Together the Incentives listed below support the notion that safety-net
providers are mission driven, with responsibilities to a community. Safety-net
providers are prepared, predisposed, and experienced to care for complex patients
by meeting medical and non-medical needs.
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SNPs are mission driven, established to serve a community (17).
• SNPs see themselves as a community resource as well as a business
(18).
• SNPs relv on grant funds to care for the uninsured (22).
• SNPs provide non-medical services ftransportation, translation, child
care and outreach) for the Medicaid population and offer these to the
uninsured to spread out sunk costs (23).
• SNPs are experienced in caring for complex patients with medical and
non-medical needs (26).
• SNPs are predisposed to fill gaps in care and seek wavs to create
programs to get patients what they need (30).
• SNPs need to focus on cost control and to deliver effective and efficient
healthcare services (35).
• SNPs are using clinical pathways to standardize care for Medicaid
populations and they aoolv these to the uninsured as well (36).
These Incentives also support the premise that safety-net providers are
focused on cost control, adapt to a changing health industry, adopt new strategies,
such as clinical pathways, and are entrepreneurs in seeking funds to care for the
uninsured.
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Three Incentives (20, 21, and 24) are mentioned by less than 25 percent of
the study sites. These provide a glimpse of non-market factors, social justice,
community expectations, and grant funding, that are part of the safety-net provider
context.
• SNPs are located in medically underserved areas, which contributes to
a social justice agenda (20).
• SNPs relv on local community support, which increases expectations to
provide access to care (21).
• Federal, state, and local grants enable SNPs to gain market share
dominance in market niches (24).
The remaining five Incentives (19, 25, 29, 33, and 34) are not mentioned by
any of the sites.
• For some SNPs. their governance structure requires them to be more
responsive to their local community (19).
• Cost-based reimbursement allows CHC's to hire support staff (e.g..
case managers, health education, etc.). which can be used to support
Care Management programs (25).
• Government-owned SNPs. as deep pockets, have a higher degree of
legal exposure for negative outcomes (29).
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• Managed care presents opportunities related to quality assurance and
reporting requirements (33).
• Consumers are demanding low-cost, high quality healthcare products
and services (34).
As before, the absence of these Incentives may be due to the interview
design and discussion focus rather than an indication of relevance. Similar to
Drivers Not Mentioned, these Incentives tend to address specifics such as
governance structures or particular reimbursement mechanisms. As a result,
these Incentives may not have been mentioned because they require more direct
knowledge of specific types of safety-net providers or are not relevant to the
discussion during the interviews. In addition, Incentives 33 and 34 are related to
industry conditions where there is less consensus about quality and consumer
demand for quality and for this reason they may not have been mentioned.
5.3.2.3 Differences Between Groups
Table 5-9 (Frequency of Mention by Study Sites) above shows interesting
patterns and differences between hospitals, health centers, and health plans. This
section looks at Drivers and Incentives by type of provider. Table 5-10 (Drivers
Mentioned in at Least 25 Percent of Study Sites) and Table 5-11 (Incentives
Mentioned in at Least 25 Percent of Study Sites) illuminate differences between
groups.
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Drivers 1 through 4, as mentioned above, are mentioned with high
frequency, consistently across groups. It is interesting that hospitals mention
Driver 2, regarding uninsured access through Emergency Departments less often
than health plans and health centers. In part, this may be due to safety-net
hospitals having high numbers of admissions through the Emergency Department
which diminishes this as an outstanding factor for the uninsured. In addition,
hospital study sites mentioned reduced lengths of stays more often than either
health plan or health center study sites, which may have lessened emphasis on
Emergency Department admissions. Health centers, particularly those with
Asthma care management programs, and health plans identified reductions in
Emergency Department use as a care management program objective.
Only hospitals mentioned Driver 15—Public/consumer perceptions of
comparable quality is critical in a market environment. One reason for this may be
that hospitals have a longer history operating under accreditation standards that
require quality monitoring and quality departments. Three Incentives (20, 21, and
24), related to safety-net provider characteristics and their funding, are mentioned
by two of the three groups. Of these, health centers mentioned the two following
Incentives more frequently than hospitals, while health plans did not mention these
Incentives at all.
• SNPs are located in medically underserved areas, which contributes to
a social justice agenda (20).
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• SNPs relv on local community support, which increases expectations to
provide access to care (21).
The development of health centers and health plans may help explain the
differences in responses by these two groups. Most health centers, particularly
those relying on federal funding, are required to be located in medically
underserved communities and to have governing boards on which health center
users represent the majority of members. By design, health centers are closer to
the community. Health plans, on the other hand, are primarily administrative units
whose function it is to organize networks of providers to deliver care to populations
they are inclined to serve. For this reason, safety-net health plans have provider
networks comprised of safety-net providers.
5.3.2.3.1 Drivers Mentioned by Provider Type
Ten Drivers are mentioned by at least one-fourth of the study sites. Table
5-10 (Drivers Mentioned in at Least 25 Percent of Study Sites) presents the
percentage of study sites by provider type for these ten Drivers. For the ten listed,
33 percent of the hospitals and 29 percent of the health centers mentioned the
Drivers, with three exceptions. The exceptions are Driver 6, which is not
mentioned by any health center in the sample, and Driver 16—Medicaid managed
care market share depends on patient satisfaction and perceptions of quality.
which is mentioned by half or more of the health plans, none of the health centers,
and only 22 percent of the hospitals. Driver 6 is related to higher expectations to
serve the uninsured, and Driver 16 is related to market share based on patient
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satisfaction. These responses may reflect the priority these factors have for
different types of safety-net providers.
Table 5-10
Drivers Mentioned in at Least 25 Percent of Study Sites
Drivers Health Plans Hospitals Health Centers
33% 33% 29%
1 100% 89% 100%
2 100% 78% 100%
3 100% 89% 100%
4 100% 89% 100%
5 50% 33% 29%
6 50% 56% 0%
10 67% 56% 29%
1 1 83% 44% 29%
13 50% 33% 43%
16 33% 22% 0%
Note. Bold = Drivers mentioned by all study sites; shaded = Drivers not mentioned by
study sites.
Of the 10 Drivers listed in Table 5-10 above, four (5, 6, 10, and 11) are
mentioned by at least one-third of the hospitals, but they are noted by less than
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one-third of health centers. Driver (13) is mentioned by one-third of both hospitals
and health centers. These Drivers are related to safety-net provider funding and
industry conditions and may reflect higher volatility of funding sources for hospitals
than health centers. Health centers, with cost-based reimbursement, operate with
more predictable funding, whereas hospitals typically have a variety of funding
arrangements, such as discounted fee-for-service, per diem, partial risk, full risk,
global rates, etc.
These Drivers are listed below:
• SNPs face increased accountability when they receive grants or public
funds 15).
• SNPs receiving tax subsidies face higher expectations to serve
everyone, irrespective of ability to pav (61.
• Medicaid eligibility is transient for low-income uninsured—SNPs need
to retain this population when they have coverage (10).
• At-risk contracts have financial Incentives to control cost and
emphasize preventive care (11).
• To retain Medicaid managed care patients. SNPs must provide the
same amenities and services as non-SNPs (13).
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5.3.2.3.2 Incentives Mentioned by Groups
There is greater variance among Incentives mentioned by provider type.
Table 5-11 (Incentives Mentioned in at Least 25 Percent of Study Sites) reports on
fifteen Incentives mentioned in at least 25 percent of the study sites, with three
exceptions, Incentives 20, 21, and 24. For these exceptions, one-fourth of health
centers, no health plans, and only one hospital mentioned these Incentives.
These incentives are related to characteristics more typical of health centers being
located in medically underserved areas, having increased expectations due to
community support, and using grants to gain market share.
As noted earlier, all study sites mentioned four Incentives (27, 28, 31, and
32) consistently. Three other incentives (17, 18, and 22), listed below, related to
safety-net provider characteristics and grant funds to care for the uninsured are
also mentioned by all health centers in the study. The high frequency with which
these Incentives are mentioned by health centers and not by hospitals and health
plans may reflect the developmental history of health centers and their high
reliance on two funding sources, cost-based reimbursement, and grant funding.
• SNPs are mission driven, established to serve a community (17).
• SNPs see themselves as a community resource as well as a business
(18).
• SNPs relv on grant funds to care for the uninsured (22).
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Table 5-11
Incentives Mentioned in at Least 25 Percent of Study Sites
Incentives Health Plans Hospitals Health Centers
33% 44% 29%
17 67% 78% 100%
18 67% 89% 100%
20 11% 43%
21 11% 57%
22 33% 44% 100%
23 67% 78% 86%
24 0% 22% 29%
26 67% 78% 86%
27 100% 89% 100%
28 83% 100% 100%
30 17% 56% 71%
3 1 100% 100% 100%
32 100% 100% 100%
35 83% 89% 71%
36 67% 78% 71%
Note. Bold = Incentives mentioned by all study sites; shaded = Incentives not mentioned
by study sites.
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5.3.2.4 Drivers and Incentives Not Mentioned by Study Sites
Just as important in this analysis are Drivers and Incentives that are not
mentioned. One Driver and five Incentives are not mentioned in any of the
interviews.
5.3.2.4.1 Drivers
One Driver—SNPs can use special medical services Ibum unit. NICU) to
draw paving patients as well as the uninsured (14)—is not mentioned by any of the
sites. In addition, as shown in Table 5-12 (Drivers Not Mentioned) there are six
Drivers that are not mentioned by at least one type of provider. The Drivers Not
Mentioned by study sites are similar to those not mentioned by CMSE. These
Drivers are related to tax subsidies, educational requirements of academic medical
centers, competition and market impacts of perceptions of quality, and patient
satisfaction. In addition, health plans do not mention Driver 12, which relates to
managed care and increased choice of providers that Medicaid beneficiaries now
have.
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Table 5-12
Drivers Not Mentioned
Driver By All Health Plans By All Hospitals By All Health Centers
6 X
7 X
8 X
12 X
14 X X X
15 X X
16 X
Health centers and health plans did not mention more Drivers than
hospitals. The Drivers Not Mentioned are listed here. The first three are not
mentioned by health centers. The last two Drivers are not mentioned by any
health plan site.
• SNPs receiving tax subsidies face higher expectations to serve
everyone, irrespective of ability to pay 16).
• Medicaid funding is the backbone of the safetv-net and linked to
subsidies for the uninsured (81
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• Medicaid managed care market share depends on patient satisfaction
and perceptions of quality (16).
• SNPs that are also academic medical centers have educational
requirements that caring for the uninsured help to meet (7).
• Medicaid managed care patients have provider options other than
SNPs (12).
As noted earlier, some of these Drivers point to specific conditions that may
apply only to certain types of safety-net provider organizations. For example,
health centers and health plans are not likely to be benefactors of tax subsidies.
Tax subsidies are more typical of public hospitals. Hospitals are also more likely
than health centers and health plans to consider the training needs of academic
medical centers because they tend to host these programs and must deal with
these concerns. What is surprising is that health centers did not mention Medicaid
as critical to funding programs for the uninsured, and health plans did not mention
competition from non-safety-net providers. Looking more closely at the study sites
helps provide an explanation for what at first appears to be counter-intuitive
results.
The health center study sites varied widely in structure. Most are not the
typical independent federally qualified health center, which may have placed more
emphasis on Medicaid as a funding source for the uninsured. Health center study
sites are funded through donations, volunteer medical staff, speaking
engagements, and private foundation grants. Only one site is a Federally
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Qualified Health Center although it was originally structured as a social services
neighborhood program. Health center services were added later and are
supported by more traditional social sen/ice programs such as community
volunteers trained to mentor or coach target populations.
All health plans in the study are public organizations. Several were
initiated as strategies to respond to competitive managed care markets and as
vehicles to help safety-net providers retain Medicaid populations and related
subsidies and indigent funding that was redistributed by managed care initiatives.
Most of the health plans rely on local safety-net provider networks and have direct
responsibility for indigent care budgets. The care management programs these
plans talked about began as administrative efforts to control utilization, particularly
for difficult-to-treat populations such as the mentally ill, substance abusers, or the
homeless. Because these programs focus on indigents and hard-to-serve
populations, competition may not have been a priority for these interviewees.
5.3.2.4.2 Incentives
As with Drivers, differences exist among groups for incentives Not
Mentioned. These are listed in Table 5-13 (Incentives Not Mentioned). As noted
earlier, five Incentives (19, 25, 29, 33, and 34) are not mentioned by any study
site.
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Table 5-13
Incentives Not Mentioned
Incentive By All Health Plans By All Hospitals By All Health Centers
19 X X X
20 X
21 X
24 X
25 X X X
29 X X X
33 X X X
34 X X X
Health plans had the greatest number of Incentives Not Mentioned, a total
of eight. In addition to the five listed above, three other Incentives (20, 21, and 24)
are not mentioned by any health plan.
• SNPs are located in medically underserved areas, which contributes to
a social justice agenda (201.
• SNPs relv on local community support, which increases expectations to
provide access to care (21).
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• Federal, state, and local grants enable SNPs to gain market share
dominance in market niches (24).
These incentives are less relevant to health plans and may explain why
these Incentives are not mentioned by health plans.
S.3.2.S Case Studies
Another focus for the Content Analysis is the set of case study interviews.
To gather additional data on how care management programs are designed and
the rationale for these investments seven study sites were selected for case
studies. Case study sites have the following characteristics: they are located in
metropolitan areas, the funding for their care management programs comes from
existing revenue sources or external grant funding, and their programs serve both
uninsured and Medicaid populations. The case study sites represent a wide range
of approaches to care management and, in some cases, are illustrative of
programs in other study sites as well. The case study sites, in the order in which
they are described below, include the following:
• Two hospital systems: Jackson Memorial Hospital in Miami, Florida and
Parkland Health and Hospitals in Dallas, Texas
• Three health centers: the Community Health Center Network in Alameda,
California, Project Dulce in San Diego, California and the Grace Hill
Neighborhood Health Center in St. Louis, Missouri
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• Two health plans: Boston Medical Center and HealthNet Plan, in Boston,
Massachusetts, and Contra Costa Health Plan in Martinez, California
5.3.2.5.1 Jackson Memorial Hospital
Jackson Memorial Hospital is a public, tertiary teaching hospital, with a
network of countywide primary care clinics; and additionally, is the primary
provider of care for the indigent in Dade County, Florida. Forty-five percent of the
population in these programs are Latino and 20 percent are uninsured. Jackson
Memorial has a disease management department with patient education classes,
nurses/case workers, and providers and clinic staff trained to promote self-care.
The hospital is also host to disease management programs for Diabetes and
Renal Failure since 1995. Jackson Memorial's programs and providers
consistently use national clinical guidelines and conduct quarterly and annual
evaluations to track compliance and patient health outcomes. In addition, the
hospital is one of the few sites that has been able to specifically track its cost
efficiencies and savings in terms of reduced ER visits, hospital admissions, and
hospital length of stay.
5.3.2.5.2 Parkland Health and Hospital System
Parkland Health and Hospital System serves a large number of uninsured
with chronic illness. An extensive delivery system with 800 hospital beds,
Parkland provides 130,000 outpatient visits annually through several community-
based clinics and more than 144,000 Emergency Department visits. The aim of
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their care management program, at inception, is to remove barriers to care by
providing a coherent delivery structure to support continuity and a single standard
of care. Parkland uses a patient-centered model where the patient is considered a
partner in developing the treatment plan it and places high emphasis on preparing
and supporting patients with self-management. This is a highly evolved program
with six disease management initiatives and robust multidisciplinary involvement to
improve care delivery. Structured as quality improvement initiatives, this approach
to care management improves the training of key people (point of contact staff) in
the delivery pathway to first bring up proficiency in these point persons, and then
to identify clinical and administrative process changes that may be needed at
various levels in the organization and in the care pathway.
The hospital staff has developed both Internet and Intranet resources
around the topic of care management. The Intranet is used to make program
information readily available to providers everywhere in the system. Both Jackson
and Parkland are annually investing about $600,000 of hospital revenues for their
care management activities.
5.3.2.5.3 Community Health Center Network
Community Health Center Network (CHCN) was developed as a risk-
bearing Management Services Organization (MSO) for free standing community
health centers to jointly enter into managed care contracts. With funding from a
granting foundation, CHCN is implementing a diabetes care management program
for health centers that are part of the MSO structure. Using a diabetes care
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management program developed and piloted by a member health center, the
program is to be grown to scale and transplanted to all network health centers. In
the process, the initiative is to help health centers move their clinical practice from
a visit mentality to a population-based responsibility and to help health centers
become more outcomes-driven. A key component of the program is electronic
registries, customized for every health center site, which help clinics to track
patients, and leam about barriers to care and other problems in the delivery
system.
CHCN is using the information system installed for managed care contract
monitoring and the rapid change model (consisting of small activity cycles which
grow into larger change initiatives) to meet the goals of the American Diabetes
Association (ADA). The program also publishes a diabetes patient self
management manual in Spanish and English as well as a Diabetic cook book
using Latino menus (available in English and Spanish both.) The grant for this
project is $1.5 million, over three years.
5.3.2.5.4 Project Dulce
Project Dulce is a diabetes care management program under Whitter
Institute for Diabetes that is primarily a research organization. The program uses
a clinical pathway developed by the Whitter research team and adapted for a
community health center’s patient population with its high socioeconomic needs to
treat Latino patients with diabetes. Project Dulce combines two different
approaches: a stage diabetes management program developed by a Whitter
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Endocrinologist to stratify risk using a nurse management team, and a patient
education program developed by Latino Health Access to educate and empower
patients to take control of their healthcare using community health workers.
The combined model is used by six independently operated health centers
in the San Diego region. Medical Directors from all six health centers are involved
in implementing the program. As such, each health center sees the program as
it’s own. The program uses trained laypersons or promotoras, also called
community health workers, to teach patients about diabetes management. The
program has shown good outcomes and reduced Emergency Department and
hospital use; program staff have conducted an intensive evaluation of the
influences of culture, belief systems, and self-efficacy. The administrators of the
program are beginning to expand the program into a multi-hospital delivery system
and a fixed-cost model for county indigents. This program was developed with
grant funding and is now exploring other financial arrangements with local health
plans and hospitals, and granting foundations.
5.3.2.5.5 Grace Hill Neighborhood Health Center
Grace Hill Neighborhood Health Center is a network of community clinics
serving neighborhoods of St. Louis City for over 30 years. Grace Hill participated
in the U.S. Health and Human Service Agency, Health Resources and Sen/ices
Administration's (HRSA) Breakthrough Series to gain an understanding of the
models that are in place for diabetes management and ways they can be adapted
to serve low-income populations. The experience helped with the development of
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the Center’s Diabetes management program in 1998 and a cardiovascular
program in late 1999.
Approximately 10 percent of the patients the clinics serve are Latino, the
majority are African American and over 80 percent of the patients in the diabetes
program are uninsured. Grace Hill's programs place great emphasis on patient
education and self-management and use health coaches or community volunteers
to promote the idea of individual and community teaching and learning. The
agency itself is well established with a sound infrastructure, supportive leaders,
and care management programs that have clear and achievable goals. Grace Hill
also has an information system that allows staff to track their patients at different
sites throughout the delivery network to coordinate care. These programs are
funded through grants and other health center revenues including a contract with a
large Medicaid managed care organization.
5.3.2.5.6 Boston Medical Center HealthNet Plan
Boston Medical Center HealthNet Plan, established by Boston City Hospital
in November 1995, this center runs has a full risk managed care plan with 23,000
Medicaid patients and a program for the uninsured with 71,000 members. Boston
Medical Center and 14 affiliated community centers serve as the delivery system
for both. The program for the uninsured is administrative and is concerned with
enrolling members that qualify for the state’s Free Care program into a medical
home or a provider relationship.
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Boston HealthNet started their care management efforts with the
assumption that under fixed reimbursement they would have to control costs and
manage a population whose care has been mostly unmanaged. This concern
increased as providers enrolled high using patients into Medicaid managed care
capitated contracts. In order to survive financially, Boston HealthNet elected to
look at utilization patterns and to implement a utilization and authorization review
process.
Boston HealthNet is focused on efforts to prevent illness or reduce
inappropriate use of hospital stays, Emergency Department visits, and other
unnecessary services. The strategy has been successful. With hospital and
emergency utilization down, Boston HealthNet is now looking to further
decentralize care management by helping affiliated community health centers
increase their capacity to manage more difficult patients in the primary care
setting.
Boston HealthNet is a provider-owned health plan which funds its care
management programs with an augmented Medicaid premium. The premium
augmentation is in recognition of having a delivery network comprised primarily of
safety-net providers.
5.3.2.5.7 Contra Costa Health Plan
Contra Costa Health Plan uses a hybrid care management program for a
population that is constantly undergoing change. The genesis of the care
management program can be traced to a targeted case management grant for
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high-cost patients in 1988-90 and a pilot project proposal to develop a social HMO
for the frail elderly and populations on both Medicaid and Medicare (referred to as
Medi-Medi patients). Through this early experience plan, administrators learned
that patients that are frequent users o f the health system, also known as “frequent
flyers,” are only a portion of the high-cost patients. Administrators now believe
patients with substance abuse and mental health problems represent high-cost
saving opportunities.
The core component of the CCHP care management program is a
dedicated unit of experienced, culturally competent, and bilingual nursing and
social work staff. The RNs have psychiatric and medical nursing backgrounds,
and the social work staff have master's degrees and a psychosocial and
community orientation. The program includes a comprehensive risk assessment
for all referred patients and regular case conferencing.
Contra Costa recently started using the FS12 (functional status)
questionnaire on all new patients. In addition, the health plan employs a panel of
providers and ancillary staff to confer on the patient’s medical, social, and support
circumstances to develop a treatment plan, and to address clinical and delivery
system issues related to patients. The health plan emphasizes health promotion
and patient education, and offers plan physicians a variety of services to enable
them to better manage hard-to-care for patients.
Contra Costa staff first started monitoring patients by phone, but now its
staff are firm believers in home visits and frequent contacts because they are
better able to assess the patient and home situation and to identify other risks or
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problems. A program evaluation found 70 percent savings in the utilization and
cost pattern in a small sample of 20 patients under case management. The care
management programs, including case management, are available for uninsured
indigent, Medicaid and commercial plan members. Program expenditures are paid
for with both indigent pool funds and Medicaid and commercial managed care
premiums.
S.3.2.6 Drivers and Incentives Mentioned by Case Studies
Case study sites offer more in-depth information about these safety-net
providers and the reasons behind the choices these sites made to offer care
management programs for the uninsured. An analysis of Drivers and Incentives
mentioned during these interviews is informative and can serve as a point of
contrast for other study sites.
5.3.2.6.1 Drivers
As would be expected, case study interviewees tended to mention more
Drivers and Incentives than hospitals as a group, or health plans and health
centers. Table 5-14 (Drivers and Incentives Mentioned in at Least 25 Percent of
Case Studies) presents fourteen Drivers and fourteen Incentives mentioned in
case study interviews in at least 25 percent of the sites.
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Table 5-14
Driving Forces Mentioned in at Least 25 Percent of Case Studies
Drivers Incentives
Driver# Percent Incentive# Percent
1 100% 17 86%
2 100% 18 86%
3 100% 21 29%
4 100% 22 57%
5 43% 23 71%
6 29% 24 29%
7 29% 26 71%
8 29% 27 100%
9 43% 28 100%
10 71% 30 29%
1 1 57% 3 1 100%
12 29% 32 100%
13 71% 35 86%
16 29% 36 100%
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Consistent with earlier results, all case studies mentioned four Drivers (1,
2, 3, and 4) and do not mention Driver 14. Only one case study site mentioned
Driver 15. Of the remaining eleven Drivers mentioned in the case studies, Drivers
10 and 13 are mentioned more often.
• Medicaid eligibility is transient for low-income uninsured—SNPs need
to retain this population when they have coverage (10).
• To retain Medicaid managed care patients. SNPs must provide the
same amenities and services as non-SNPs (13).
These Drivers are related to the health industry and the competitive
environment within which safety-net providers operate. That these drivers are
mentioned more often by case study interviewees may reflect that these aspects of
the business case are more deeply rooted and surface only after deeper probing.
5.3.2.6.2 Incentives
With regard to Incentives, consistent with earlier results, four (27, 28, 31,
and 32) are mentioned by all case study sites and five (19, 25, 29, 33, and 34) are
not mentioned by any. In addition, Incentive 36, SNPs are using clinical pathways
to standardize care for Medicaid populations and they apply these to the uninsured
as well, which is mentioned by less than three-fourth of all study sites, is
mentioned by all case studies.
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S.3.2.7 Results: Comparison Across Groups
The primary reason most study sites gave for developing care
management programs is because of the potential to reduce costs while improving
quality. Consistent with the literature, most hospital system and health plan sites
targeted reduction of unnecessary hospital and emergency department utilization.
Hospital systems and health plans are more likely to realize savings from reduced
cost through reduced lengths of hospital stays and decreased emergency
department use. In contrast, the health center study sites ail focused on disease-
specific care management programs, most commonly those that addressed
diabetes, asthma, and cardiovascular conditions. These programs are developed
as a means to address populations that present with preventable health conditions
due to poor self-management or care delivery failures. For this reason care
management programs within health centers place more emphasis on preventing
preventable health complications. As a consequence, the Drivers and Incentives
mentioned by these groups are likely to reflect these differences in priorities.
5.3.2.7.1 Drivers
Table 5-15 (Group Comparison of Drivers Mentioned) presents the
number of interviews that mention each Driver and the percent of the total for each
group: all study sites, provider type, and case studies. Drivers mentioned by 100
Percent of study sites within groups are shown in bold, Drivers not mentioned at
all are shaded and Drivers mentioned by less than 25 percent of study sites in
each group are [boxed in light shading"]. Consistently across groups and for all
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study sites, Drivers 1, 2, 3, and 4 are frequently mentioned, and Driver 14 is not
mentioned at all. Case study sites, however, tend to mention Drivers with more
frequency than other groups, while health centers mention Drivers the least of all
groups.
Drivers 10, 1 1 and 13, related to the health industry, show great variability
across groups. Driver 10, related to Medicaid eligibility, was mentioned more often
by case studies (71 percent) and less often by health centers (25 percent). Health
centers (25 percent) also mention Driver 11, related to at-risk contracts, less often
than health plans (83 percent). Case study sites (71 percent) mentioned Driver
13, related to retention of Medicaid patients, more often than other groups; Driver
13 is mentioned by less than 50 percent of sites in other groups.
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Table 5-15
Group Comparison of Drivers Mentioned
All Study
Sites
Health Plans Hospitals Health Center Case Studies
Drivers— Pressures or D yn am ics in the Environment
1 21 95% 6 100% 8 89% 7 88% 7 100%
2 20 91% 6 100% 7 78% 7 88% 7 100%
3 21 95% 6 100% 8 89% 7 88% 7 100%
4 21 95% 6 100% 8 89% 7 88% 7 100%
5 8 36% 3 50% 3 33% 2 25% 3 43%
6 8 36% 3 50% 5 56%
r ::0
0% 2 29%
r 2 9% C f
'j:.'
.
Ni- 5 , Vi*-
1 11% 1 13% 2 29%
8 2 9% 1 17% 1 11% 0% 2 29%
9 4 18% 1 17% 2 22% 1 13% 3 43%
10 1 1 50% 4 67% 5 56% 2 25% 5 71%
11 1 1 50% 5 83% 4 44% 2 25% 4 57%
12 2 9% 0
o % v *
1 11% 1 13% 2 29%
13 9 41% 3 50% 3 33% 3 38% 5 71%
14 0 Q % r 0
1
m
' -.'i
;.o> 0% 0 0%
15 2 9% O r 2 22%
im
0% 1 14%
16 4 18% 2 33% 2 22% 0% 2 29%
Note. Bold - Drivers mentioned by all study sites; shajjjd = Drivers not mentioned by study sites;
boxed in light shading] = Drivers mentioned by less than 25 percent of study sites in each group.
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What is important about these results is that the differences indicate that
driving forces influencing safety-net providers will differ for different types providers
and that some elements of the business case, irrespective of the type of care
management program, may be more fundamental to the economic structures of
the safety-net or to conditions unique to specific settings.
5.3.2.7.2 Incentives
Overall, Incentives are mentioned more often by health centers and least
often by health plans, and there is more consistency when looking at Incentives
across groups. Table 5-16 (Group Comparison of Incentives Mentioned) reports
the number of interviews that mention each Incentive. Incentives mentioned by
100 percent of study sites within groups are shown in bold, Incentives not
mentioned at all are highligfifefl in gray, and Incentives not mentioned in at least
25 percent of study sites in a group are Iboxed in light shading.
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Table 5-16
Group Comparison of Incentives Mentioned
All Study
Sites
Health Plans Hospitals Health Center Case
Studies
Incentives—Conditions That Provide Rationale or Motivation
17 18 82% 4 67% 7 78% 7 1 0 0 % 6 86%
18 19 86% 4 67% 8 89% 7 1 0 0 % 6 86%
19 0 0 % ' j :: : ' ; 0 -0 •
■ 0%. o
0 %
2 0 4 18%
% •
1 11% 3 43% 1 14%
2 1 5 23% 0 1 11% 4 57% 2 29%
2 2 13 59% 2 33% 4 44% 7 100% 4 57%
23 17 77% 4 67% 7 78% 6 86% 5 71%
24 4 18% * < > .:•
; ■ ■ ■;4m M
2 2 2 % 2 29% 2 29%
25 0
: .0 %
j.::0v :&•- v - 0 % 0 0 %
26 17 77% 4 67% 7 78% 6 86% 5 71%
27 21 95% 6 1 0 0 % 8 89% 7 1 0 0 % 7 1 0 0 %
28 21 95% 5 83% 9 1 0 0 % 7 1 0 0 % 7 1 0 0 %
29 0 0 % • 0 . - Q 3 6 '' 0 0 % 0 0 % 0 0 %
30 1 1 50% 1 17% 5 56% 5 71% 2 29%
31 22 1 0 0 % 6 1 0 0 % 9 1 0 0 % 7 1 0 0 % 7 1 0 0 %
32 22 1 0 0 % 6 1 0 0 % 9 1 0 0 % 7 1 0 0 % 7 1 0 0 %
33 0
0 % .
. © '' 0 5 6 y v/-
•T svi
'■ •oV fed; .0% 0 0 %
34 0 0 % . ;o v :; o % • ;
• - d ; •..,\/d*v ";0 :‘ 0 % 0 0 %
35 18 82% 5 83% 8 89% 5 71% 6 86%
36 16 73% 4 67% 7 78% 5 71% 7 1 0 0 %
Note. Bold = Incentives mentioned by all study sites; shaded = Incentives not mentioned
by study sites; I boxed in light shading] = Incentives mentioned by less than percent of
study sites in each group.
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Overall, Incentives 17, 18, 27, 28, 31, 32, 35 and 36 are mentioned most
often across groups. These Incentives relate primarily to characteristics of safety-
net providers and health industry conditions: collectively they support the premise
that safety-net providers see themselves as mission driven. (171 community
resources (181. oriented to behavioral and social issues of the populations they
treat (31) and willing to incur the cost of preventable conditions for the uninsured
that results from limited access (27) and responsible for populations that are in and
out of public and private health insurance programs (28). These data also support
the contention that safety-net providers are concerned with cost control and
effective and efficient healthcare delivery (35), use of clinical pathways for
Medicaid populations that are also applied to the uninsured (36), and patient
education to self-manaae their medical conditions and to change health behaviors
(32).
5.3.2.8 Other Considerations
In addition to analyzing study site interviews, a word count was performed
for select words which may provide further evidence of trends and emphases
carried across interviews. The word count was grouped into seven general areas
as well as for key words cosf and quality. The seven areas selected were based
on the underlying assumption that care management is based on twin goals: (a) to
reduce cost and (b) to retain or improve quality. As expected, underlying all the
interviews is an emphasis on cost. Cosf is mentioned 177 times in the study site
surveys and quality is mentioned 55 times.
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To better understand the strength of the comments related to cost, other
key words associated with cost are counted. These include reference to cost
containment in terms of hospitalization, Emergency Department, reduction,
emergency, acute, or unnecessary, or cost savings or efficiency. Together
these words are mentioned 236 times.
Also dominant in the interviews are references to self-management and
patient education. Keywords such as education, patient education, prevent,
chronic, self-manage, and early intervention are used to gage mention of
collective efforts to change patient behavior. Together, these words are
mentioned 162 times. Related to the issue of self-management are words to
describe patient characteristics such as uninsured and risk as well as behavior
related terms such as psych and social. Together, these words are mentioned
142 times during the interviews. Words such as commitment, mission, and
accountability are mentioned 31 times.
Program funding and market dynamics are also posited as contributing
factors to these programs. For this reason words such as funding and grants are
counted as well as FQHC and DSH. The word count results show that funding
and grants are mentioned 106 times, but the funding sources FQHC and DSH are
only mentioned 4 times. Finally, words related to the market such as managed
care, market, compete, and Medicaid/Medi-Cal are mentioned a total of 81
times.
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5.3.2.9 Study Limitations
The data for Drivers and incentives mentioned in interviews with safety-net
providers and care management experts present a quantitative approach to
understanding the business case for care management. The next step is to
consider these results using a Force Field Analysis Model, a qualitative approach
to the business case analysis. As these results are considered, it is important to
understand the limitations of this study and the data that are presented here. The
limitations include sample size and study site selection, use of interview notes and
the different note-taking styles of individual recorders, rater error or bias, and the
concepts of Drivers and Incentives. Each is addressed separately.
The sample size and study site selection lend caution to generalizations.
The sample size is limited to twenty-two safety-net providers identified through
interviews with national leaders in care management, quality, and chronic care.
The sites identified by CMSE may be ones that are more visible or actively
involved in programs familiar to the national informants. However, of the 90 sites
identified as potential study candidates, 16 percent could not be contacted for
interviews. The selection of twenty-two sites was based on brief 15-20 minute
telephone interviews with individuals at 75 prospective sites. Each of these factors
can contribute to sample selection bias.
In addition, study site selection included various criteria, such as selection
of different provider types, focus on diabetes and Latino and comprehensive
programs. These criteria could also introduce sample bias. The study sites
include health centers, hospital systems, and health plans with unique
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implementation environments and therefore potentially different Drivers and
Incentives. Interview notes are poor instruments to capture this variability and
could be influenced by events and priorities of the moment. For this reason, rater
error or bias in analyzing comments and interpreting these into Drivers and
Incentives could be reflected in the tabulations on which these results are based.
Finally, the Drivers and Incentives statements encompass broad concepts that
could be difficult to discern and extrapolate from interview notes.
Quantitative analyses such as those used to tabulate how often Drivers
and Incentives are mentioned by safety-net providers may not fully capture
complex issues reported in the interviews, for example, misaligned reimbursement.
The tabulation of Incentives mentioned does not capture the underlying reason
that providers conduct home visits when office visits will suffice, for example,
instances when providers are paid more for home visits. Another example is per
diem reimbursements for hospitals, where hospitals are reimbursed for each day
of hospitalization. These reimbursement schemes do not reward reduced hospital
stays.
Another important component missing from this analysis, in large part
because it is missing from most interviews, is information related to the financial
impact of these programs. Most study sites are unable to collect sufficient data to
determine the return on investment achieved by these programs. Small sample
analysis, anecdotes, and extrapolation of potential impacts and savings are often
cited as rationale for initiating, continuing, or expanding these programs.
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Another complex discussion that took place in many survey interviews is
about savings and where potential savings may be realized. For example, several
safety-net providers acknowledged that savings from disease management for
conditions such as diabetes might take a minimum of three to five years to
materialize. Providers seemed to rely on an intuitive logic that savings could be
achieved through prevention and management of illnesses to prevent advanced
disease states. Similarly, safety-net providers pointed to increased responsibilities
and costs for caregivers along the pathway; namely, physicians, nurses, and
clerical personnel, even though savings may be realized by different organizations
along the continuum of care. Typically hospitals, or within large hospital systems,
organizational units such as Emergency Departments or inpatient units are likely to
realize savings. These interrelated concepts are difficult to capture with a
quantitative study.
Further, several safety-net providers also placed high value on avoiding
medical complications for their patients and attributed these outcomes as direct
benefits of these programs. Although Incentive 27 directly captures the notion that
safety-net providers may find it more prudent to prevent deteriorated health, the
concept of cost avoidance is not well captured. Informants also acknowledge that
potential benefits are more likely to return to payers, the government, employers,
and society at large and that in the short run, safety-net providers will spend more
to implement these programs. The Incentive that safety-net providers are mission
driven does not account for other social goods that may also have value for safety-
net providers.
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Finally, counter or restraining forces presented by care management
discussed in several interviews are not captured through the tabulations. Counter
forces include increases in administrative cost, increased workload and increased
awareness of gaps in the delivery system that require more resources. Within
these limitations the results presented here represent a careful attempt to
quantitatively capture the pressures and Incentives faced by the safety-net
providers interviewed as part of this research.
The study premise is that safety-net providers, operating with limited
funding, are responding to health industry changes and business conditions
evolving from managed care and that these changes are affecting access to care
for the uninsured. Using a force field model to provide context for the business
case, and to theorize that care management for the uninsured is possible, Drivers
and Incentives are driving forces which counter the strong restraining force of
uncompensated cost. Interviews with safety-net providers using care
management for the uninsured are examined to team whether the driving forces
identified are mentioned as influences in developing these programs.
The Content Analysis focused on driving forces. The results presented
here provide insights about what safety-net providers say about driving forces and
the theorized business case for care management for the uninsured. The driving
forces frequently mentioned by study sites reflect influences from the interactions
between the uninsured, safety-net providers, their funding sources, and the
external healthcare market as well as the benefits of care management as an
approach to care for the uninsured. This new understanding can now be
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considered along with the restraining forces discussed in Chapter 4 to capture the
relationship between elements in the environment and to posit the business case
for care management for the uninsured in the next and final chapter.
5.4 Next Chapter Preview
Chapter 6 provides a discussion of the following: (a) whether there are
other explanations for the phenomena of care management for the uninsured and
how driving forces can be strengthened to counter the restraining force of cost, (b)
whether the driving forces are sufficient to counter the disincentive of
uncompensated cost of caring for the uninsured as a restraining force, and (c) how
to reduce restraining forces such as cost, organizational resistance to change and
lack of resource. This analysis allows an assessment of whether or not managed
care is introducing influences in the healthcare industry that support the business
case for care management for the uninsured and other forces or factors that are
given as explanations by the safety-net providers' interviewees for implementing
care management programs.
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Chapter 6
Busin ess Ca se
6.1 Peeling the Onion
The uninsured and those unable to play by market rules face increased
difficulties in accessing healthcare as the industry embraces business practices
aligned evermore with market principles irreverent to the ideals of equality and
justice. This study offers a business case for using care management as a
business strategy based on the experiences of pioneering safety-net providers.
The business case is presented within the theoretical framework of force field
analysis.
A business case analysis reflects the art of arriving at the elegance of
simplicity after an investigation into the chaos of complexity. Like peeling an
onion, analyzing the business case in complex environments requires an
examination of layer after layer of interrelated factors and conditions to identify
salient and enduring forces of influence and their relationship to one another.
Similar to strategic planning or budget forecasting, a business case for
implementing particular programs or strategies is rarely the product of detailed
analysis and is more often based on high-level abstractions. The business case
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developed in this dissertation serves as a benchmark to test different assumptions.
Through an iterative process the business case is further defined, enabling more
rigorous study.
The business case in this study is time sensitive simply because care
management is an evolving business practice. The concept of care management
is rooted in Total Quality Management and Continuous Quality Improvement
principles that poor quality represents unnecessary costs, and that improved
quality results in improved productivity, lower costs, and increased profitability.
However, the permutations of care management vary widely because of the
endless variety of opportunities for application and with organizational settings. As
a result, what care management is, is continuously evolving.
The business case for care management for the uninsured is somewhat
abstract because providers using care management for the uninsured are few,
pioneers in effect, and the idea of profit from caring for the uninsured is on first
blush counterintuitive.
This study draws upon several sources including the experience of twenty-
two safety-net providers using care management for the uninsured to develop a
theorized business case. Findings of a study commissioned by the RWJ
Foundation of safety-net providers using care management for the uninsured are
used to develop further the study's premise that safety-net providers are
responding to health industry changes and business conditions evolving from
managed care affecting access to care for the uninsured with care management.
Suppositions delineating the business case guide a review of literature of the
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domains contributing to decisions by safety-net providers to implement care
management programs. The results are arrayed in a force field analysis. Using a
Force Field Analysis Model, each domain is analyzed for forces influencing
business practices of safety-net organizations. The influencing forces identified
through the force field analysis are used to revise the business case based on a
Content Analysis of interviews with safety-net providers using care management
for the uninsured. The Content Analysis is used to learn whether driving and
restraining forces identified are mentioned as factors in decisions to develop care
management programs. The business case for care management as a prudent
business strategy to sustain access to quality healthcare for the uninsured is
refined and improved with each analysis.
This chapter concludes the business case analysis. The results of the
Content Analysis are synthesized using force field analysis, and a refined force
field model is developed. The business case framework can be used to illuminate
the conditions that support use of care management by safety-net providers and to
help guide policymakers and planners exploring approaches to maintain health
access for the uninsured.
Considerations important to maintaining access to care for the uninsured
are also discussed. In addition, this work identifies further research questions that
need to be explored in the future and offers suggestions for how safety-net
providers can manage the burden of the uninsured.
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6.1.1 The Business Case for Pioneering Safety-Net Providers
Safety-net providers are using care management for the uninsured, and
they are using strategies similar to non-safety-net providers. Understanding the
basis or business case premises of these providers provides useful insights for
understanding the forces at play in care management for the uninsured. The
Content Analysis described in Chapter 5 and the force field analysis presented in
Chapter 4 are used to integrate a body of literature and the experience of safety-
net providers into this business case analysis. The business case provides a
framework for understanding how care management may be used to provide
access to care for the uninsured. What follows is a brief review of the force field
analysis and the Content Analysis results. These analyses are then synthesized
and their implications for the business case are discussed.
6.1.2 Force Field Analysis Review
Force field analysis facilitates a systematic analysis of the organizational
context of safety-net providers to identify relevant factors that support the business
case for care management. Restraining and driving forces are conceived as
arrayed against each other within safety-net organizations working against or
pushing for the application of care management for the uninsured. The analysis
provides a snapshot of driving forces theorized to be at play in safety-net provider
environments. Thirty-six driving forces pushing and creating incentives for safety-
net providers to develop care management for the uninsured are identified in the
force field analysis. Although there are economic, social, political, and
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organizational restraining forces at work (see Table 4-6) for this analysis. Of the
14, one dominant restraining force, cost, or uncompensated care is identified as
working against the decision to develop these programs. More than half of the
driving forces theorized to counter the restraining force of costs are related to
economic influences from either safety-net funding sources or health industry
financial structures, including two forces specific to market dynamics resulting from
managed care. Three driving forces identified as pushing for care management
are related to characteristics or care-seeking behaviors of the uninsured and
fourteen to characteristics of safety-net providers.
The Force Field Model demonstrates the force and power of the
competitive business environment within which safety-net providers operate and
the significance of linking healthcare dollars to insured individuals which leaves
little room for the uninsured in an insurance-based healthcare system. The force
field analysis concludes that economic factors unleashed with this change make
the cost of providing care to uninsured individuals the dominant and overriding
restraining force for both safety-net and non-safety-net providers that must be
overcome or mitigated to achieve a business case for serving the uninsured
altogether, and more so for using care management. For this reason, the
business case analysis concentrates on driving forces that push and pull safety-
net providers toward developing care management programs.
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6.1.3 Content Analysis Summary
Safety-net providers are a distinguished group. They offer access to health
services to patients either by legal mandate or stated mission, regardless of their
ability to pay and they serve mostly the uninsured, Medicaid, or vulnerable
populations: the poor and hard-to-serve populations. In effect, safety-net providers
are in the business of providing healthcare to the poor and uninsured. In an
insurance-based industry where healthcare dollars are tied to insured individuals,
how will safety-net providers remain viable? For one group of pioneering safety-
net providers, a business strategy is using care management for the uninsured.
The Content Analysis of interviews with these pioneering safety-net
representatives help to gauge the strength and credibility of driving and restraining
forces and to further refine the business case.
Interviews with twenty-two of these pioneering safety-net providers have
been examined to learn the rationale and theorized business case leading to their
decisions to implement care management and to use these programs for the
uninsured. Twenty-one of thirty-six driving forces identified in the force field
analysis are mentioned as rationale or factors to be considered. These interviews
confirm that costs, both in terms of start-up funding and maintenance, are the
overriding concerns in initiating and continuing care management programs in
general and for the uninsured in particular. The Content Analysis of interviews
with these pioneering safety-net representatives highlights driving forces
commonly considered to counter the restraining forces associated with
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uncompensated care. Through the Content Analysis, the experience of pioneering
safety-net providers is used to further refine the business case.
When asked why safety-net providers are using care management for the
uninsured, there is high agreement across study sites about two characteristics:
(a) that safety-net providers are mission-driven providers of last resort with
organizations established to care for populations with behavioral and social
conditions, which—if unmanaged—can result in higher operating costs, and (b)
that the care-seeking behavior of the uninsured have cost implications for safety-
net providers. The next section provides a synthesis of the force field model and
the Content Analysis and their implications for the business case.
6.2 Business Case Synthesis and Implications
In nearly all interviews with safety-net providers using care management
for the uninsured, eight driving forces are consistently mentioned with high
agreement (90% to 100%). The forces include (a) all three driving forces in the
force field model related to characteristics of the uninsured, (b) four of the fourteen
driving forces related to characteristics of safety-net providers, and (c) one of
twelve driving forces related to the health industry. These forces are discussed
next. Driving forces related to safety-net funding sources are mentioned but with
less agreement. These are also discussed.
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6.2.1 Driving Forces Related to Uninsured Characteristics
With regard to the uninsured, safety-net providers establish care
management programs because of known characteristics of the uninsured, for
example, that they present with advanced disease or avoidable conditions (95%),
that they use higher cost emergency services (91%), and that the uninsured are on
and off health insurance (95%). These interviews reinforce the literature and what
is popularly believed: health insurance coverage affects access to healthcare and
that being uninsured results in more costly, avoidable, and acute healthcare
needs. Also a consideration for safety-net providers is that the uninsured are
mostly workers with on and off access to employer-based health insurance, low-
incomes and with on and off eligibility for public programs. Table 6-1 lists the
forces identified in the force field model. These forces underlie the business case
rationale for pioneering safety-net provider representatives using care
management for the uninsured.
Table 6-1
Force Field Model Based on Content Analysis—Uninsured Domain
Driving Forces
Uninsured
D -1 Uninsured present for care with more advanced disease and preventable
conditions.
D-2 Uninsured gain access through the emergency department, which is more costly.
I-28 Uninsured go in and out of public and private health insurance programs.
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The business case implications of these results are that establishing
relationships with the uninsured has potential benefits for safety-net providers in
two ways: cost avoidance and market share. For providers with few options to
avoid care of the uninsured, the opportunity to identify and intervene early for
preventable health conditions and to redirect uninsured care-seeking to more
appropriate and potentially less costly settings such as outpatient clinics
represents potential cost avoidance. The second potential benefit is market share.
If safety-net providers establish relationships with the uninsured, this may
predispose the uninsured to return when they are insured. As several safety-net
providers in the study indicated, “ the uninsured of today are the private pay
patients of tomorrow.”
6.2.2 Driving Forces Reiated to Safety-Net Provider
Characteristics
The driving forces related to safety-net providers that are most frequently
mentioned reinforce the distinguishing characteristics of safety-net providers, their
responsibility to sen/e populations rejected by market forces. That safety-net
providers are providers of last resort (95%) and that the uninsured seek care at
their facilities (95%) are common considerations. Pioneering safety-net providers
also consider the avoidable cost of preventable conditions for which the uninsured
seek care (95%) and their business practices of treating populations with high
needs and behavioral and social issues (100%).
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The business case rationale presented by pioneering safety-net providers
is based on a push-pull phenomena associated with safety-net responsibilities: (a)
because safety-net providers are providers of last resort (push) and the uninsured
seek care at their facilities (pull), (b) because the uninsured seek care late (pull),
safety-net providers incur avoidable costs of preventable conditions (push), and (c)
because safety-net providers develop programs to serve treat populations with
high needs and behavioral and social issues (pull), safety-net providers attract and
are predisposed to serve these populations (push).
Driving forces related to community influences are also considerations for
pioneering safety-net providers. Because of their community origins, safety-net
providers see themselves as a community resource (86%); they are mission driven
and were established to serve their community (82%). Two additional driving
forces that support the push-pull phenomena arising from the responsibility of
providers of last resort are mentioned as considerations in developing care
management programs: safety-net providers have experience in caring for
complex patients (77%), and their programs offer non-medical services to deal
with the social and behavioral needs of difficuIt-to-treat populations (77%).
Table 6-2 presents the driving forces related to the characteristics of
safety-net providers and their funding sources that were mentioned by pioneering
safety-net providers as rationale in their decision to develop care management for
the uninsured. These results echo the developmental history of hospitals today.
Many, both public and private hospitals had their beginnings in an era when the
medical needs of a target population went unmet in the larger healthcare system.
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The twelve driving forces serving as the business case rationale for pioneering
safety-net providers reinforce the mission and role safety-net providers were
originally established to fulfill, harking back to the days of tuberculosis hospitals.
Mission-driven, community-minded visionaries working in the public's interest
established and maintained medical homes of refuge for the tuberculosis
population.
Table 6-2
Force Field Model Based on Content Analysis: Safety-Net Domain—
Safety-Net Providers
Driving Forces
Safety-Net P roviders
D-3 Core safety-net providers are the last refuge for the uninsured and have higher
uncompensated care.
D-4 Once the acutely ill patients present, SNPs must treat them.
1 -1 7 SNPs are mission driven, established to serve a community.
1 -1 8 SNPs see themselves as a community resource as well as a business.
I-23 SNPs provide non-medical services (transportation, translation, child care and
outreach) for the Medicaid population and offer these to the uninsured to spread
out sunk cost.
I-26 SNPs are experienced in caring for complex patients with medical and non
medical needs.
I-27 SNPs incur the cost of deteriorated health for preventable conditions that result
from limited access/care.
I-30 SNPs are predisposed to fill gaps in care and seek ways to create programs to
get patients what they need.
1 -3 1 SNPs are oriented to behavioral and social issues because they serve hard-to-
treat homeless, substance-abusing, and mentally ill patients.
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In today’s healthcare environment, the new unwashed are the uninsured.
Faced with pressures emanating from managed care economics, non-safety-net
hospitals merge or convert to for-profit status in order to compete more effectively
in the new healthcare market; restricting access for the uninsured. These options
are the antithesis to safety-net providers’ missions. The economic reality for
safety-net providers is that as healthcare dollars move with insured individuals and
the number of uninsured and uncompensated costs increase, the less viable
safety-net providers become. These tensions are often referred to as a dilemma
and have given rise to the now popular refrain—no margin, no mission.
6.2.3 Driving Forces Related to Safety-Net Provider Funding
The force field analysis identified seven driving forces related to the funding
sources of safety-net providers that support the use of care management. Less
than half of these driving forces are mentioned by pioneering safety-net providers
as considerations in their decisions to develop their programs: the reliance on
grant funding (59%), accountability (36%), and community expectations (36%).
These results are unanticipated particularly because two driving forces not
mentioned are related to Medicaid funding and related subsidies for the uninsured,
which are the backbone of safety-net provider funding. Both of these forces are
critical to safety-net providers. One explanation for these omissions is that they
may be the result of the focus of the interviews which were used for the content
analysis. The interviews with pioneering safety-net providers had a dual purpose:
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to leam why they were using care management for the uninsured and to learn
about the programs. It is possible that a focus on the programmatic aspects
overshadowed larger funding concerns. A second explanation is that there is a
disconnect between funding concerns and program decisions. Two factors may
contribute to a disconnect: the strength with which the missions of safety-net
organizations are reinforced and thus the strength with which safety-net
organizations identify with their missions, and policy-based funding streams.
Low ratings for public accountability and community expectations are also
unexpected given the importance of local environments in funding safety-net
providers. Local resources and provider competition influence public funding
available for healthcare and determine the position of safety-net providers in that
market. In addition, quality improvement efforts such as those undertaken by
NCQA are also based on public accountability. Table 6-3 lists the forces related to
safety-net funding most frequently mentioned by the study sites.
Table 6-3
Force Field Model Based on Content Analysis: Safety-Net Domain—
Safety-Net Funding
Safety-Net F u n d in g
D-5 SNPs face increased accountability when they receive grants or public funds.
D-6 SNPs receiving tax subsidies face higher expectations to serve everyone,
irrespective of ability to pay.
1 -2 2 SNPs rely on grant funds to care for the uninsured.
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The business case implications from these driving forces are that the social
contract that safety-net providers have with their communities continues to have
merit for the uninsured and the core population’s safety-net providers serve—
those undesirable in a market environment. This contract includes the homeless,
mentally ill, substance abusers, incarcerated inmates, newly arrived immigrants,
those with social and behavioral needs, and those with unprofitable and high-cost
medical needs. A new and growing group reluctantly finding a home with safety-
net providers is the “health-coverage disenfranchised.” This is a population of
uninsured—low-income and not—who are confronted with a healthcare system,
prompted by managed care, where healthcare providers—responding to a health
industry that groups providers and consumers into members and nonmembers—
adopt protective strategies (e.g., requiring payment at the time of service).
Social justice can be a powerful force working in the interest of
communities and is a long held value of public leaders. Together driving forces
from the domains of the uninsured and safety-net providers suggests business
strategies that seek funding on public policy merits. That is a difficult task,
particularly in communities that hold deeply engrained anti-tax, anti-government
attitudes. As a business strategy, safety-net providers can adopt a “servant” role
and align themselves with communities drawing on local public leadership to
prioritize continued funding for the safety net or lead by example by developing
and modeling best practices to cost effectively care for populations left out of the
market. In some communities private hospitals are often the biggest supporters of
public hospitals because these private hospitals do not want the populations
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treated by public hospitals in their emergency departments. Although, with
managed care economics, this self-interested support is changing, certain
populations will continue to be undesirable (such as being uninsured in an
insurance-based health system) and better candidates for policy based funding. In
the end, local government leaders who are ultimately responsible for the health of
their communities may find market failure politically unaffordable and attempt to be
responsive to local solutions through target funding.
6.2.4 Driving Forces Related to the Health Industry
The force field analysis identified twelve driving forces related to the health
industry. Of these, six are mentioned in the interviews with pioneering safety-net
providers as rationale in their decisions to develop care management programs.
There is high agreement about three driving forces that are components of care
management programs: teaching patients to better manage their medical
conditions (100%), the need to control costs and deliver cost-effective services
(82%), and the use of clinical guidelines and quality improvement tools (73%).
Also mentioned, but less often, are financial incentives of at-risk contracts to
control costs and provide preventive services (50%). At-risk contracts with their
focus on cost effectiveness have specific implications for promoting the use of care
management.
Two other driving forces mentioned as rationale by pioneering safety-net
providers in nearly half of the interviews are related to transient Medicaid eligibility
(50%), and the need to offer comparable amenities and services to retain market
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share (41%). Table 6-4 presents the forces supported in the Content Analysis
related to the health industry.
Table 6-4
Force Field Model Based on Content Analysis: Health Industry
Domain
Driving Forces
Health Industry
D-10 Medicaid eligibility is transient for low-income uninsured—SNPs need to retain
this population when they have coverage.
D-11 At-risk contracts have financial incentives to control cost and emphasize
preventive care.
D-13 To retain Medicaid managed care patients, SNPs must provide the same
amenities and services as non-SNP.
I-32 To save cost, SNPs teach patients to self-manage their medical conditions and
work to change health behaviors.
I-35 SNPs need to focus cost control and to deliver effective and efficient health care
services.
I-36 SNPs are using clinical pathways to standardize care for Medicaid populations
and they apply these to the uninsured as well.
The dominant themes in these results is the focus on cost: costs control,
cost management, and programs to reduce cost, and an industry trend toward
care management components such as emphasizing prevention, patient self-
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management, and clinical pathways. Collectively these forces support actions to
reduce costs through a focus on quality improvement. The implication for the
business case is that, overall, these forces suggest that managed care through at-
risk contracts and a focus on cost controls is introducing influences in the
healthcare industry that support the business case for care management in
general. Whether these forces are sufficient and apply in the case of the
uninsured is another question—primarily because of the linkage of healthcare
dollars to health coverage.
Are these driving forces sufficient to counter the disincentive of
uncompensated cost of caring for the uninsured as a restraining force? That these
forces exist is an indication that care management for the uninsured is potentially a
business strategy for safety-net providers. This may be a question as some
suggest of a “tipping point.” The question is whether there is sufficient external
pressure on healthcare providers to make the “common sense" and cost/benefits
of care management through quality improvement widely known and accepted. It
is also a question of healthcare market consumer demand and purchaser
willingness to pay for quality. Cost of care management for the uninsured is an
important consideration for safety-net providers on fixed budgets, but in this
analysis, cost—related to care management and not, is illustrious and recognized
as a symptom of a larger debate precipitated by managed care economics. The
analysis begs the question; what does it mean to be a safety-net provider? In the
next section this question is examined and the business case for care
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management for the uninsured is redefined based on our new understanding of
the forces at work in safety-net organizations.
6.3 Theorized Business Case
The study begins with a business case that theorizes that safety-net
providers, with fixed budgets, are responding to health industry changes and
business conditions evolving from managed care affecting access to care for the
uninsured to care management. This analysis supports this basic premise.
However, through this analysis the business case for care management for the
uninsured is now understood differently. In an insurance-based health system
where healthcare dollars follow insured individuals the uninsured are
nonmembers. In a market environment, unless they are able to pay for care the
uninsured are not a consideration. These conditions require more than good
business acumen.
Safety-net providers are dependent on policy-based funding and local
community support—both political and financial support. Policy-based funding is
based on political will and values in regard to need. Safety-net providers working
with fixed budgets leam to be politically shrewd and financially prudent. Managing
within fixed budgets is important to their survival. Distinguishing themselves
(SNPs) from non-safety-net providers is also important to their survival and to
making the case for policy based funding.
Overall, the force field analysis identified driving forces within safety-net
organizations that lead to objectives and priorities that are inconsistent with typical
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business practices. Business strategies such as consolidations, mergers and
conversions to for-profit status are industry trends that further separate safety-net
providers from non-safety-net providers because these strategies result in reduced
access for the uninsured. The business environment for safety-net providers is
different from that of non-safety-net providers. Being competitive is important to
retaining existing markets but is not necessarily consistent with safety-net missions
as they were conceived—to fill community needs and gaps created by market
failure. For this reason, the business case is based on the notion that safety-net
providers have a unique role in the healthcare system and that care management
is a viable business strategy in a market-oriented industry.
Safety-net providers are distinguished because they offer access to health
services to patients regardless of their ability to pay, either by legal mandate or
stated mission, and they serve to fill gaps in local health delivery systems—caring
for populations undesirable in a market environment. This role is not a viable
business strategy without policy-based funding. Medicaid managed care impacts
the ecosystem of safety-net funding and is impervious to policy-based funding.
Managed care economics links healthcare dollars to insured individuals thereby
increasing competition for traditional patients and changing financial incentives
throughout the industry. Retaining Medicaid market share is important to retaining
current policy-based subsidies that were developed for structures not sustainable
under managed care.
The relationship between the uninsured and safety-net providers is a
circular one creating a push-pull environment. As nonmembers in an insurance-
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based health system and unable to pay for care, the uninsured delay or defer care,
only seeking care with advanced diseases and preventable conditions, thereby
incurring potentially avoidable costs for the providers that treat them. This circular
relationship is reinforced by protective strategies taken by non-safety-net providers
that restrict access and encourage the uninsured to seek care from safety-net
providers (push).
To retain Medicaid market share, safety-net providers enter into managed
care contracts. Managed care contracts expose safety-net providers to additional
cost control mechanisms to decrease unnecessary hospitalization and emergency
care. These contract requirements lead to care management programs for insured
patients. These programs also contribute to this push-pull compulsion. Once
available, offering care management programs to the uninsured is rational
organizational behavior, (pull) particularly when not using care management leads
to higher costs of care (push). Using care management for populations that delay
care results in cost avoidance related to preventable conditions (pull). Unlike non
safety-net providers that work to avoid unprofitable services, adverse selection is
by design a goal for safety-net providers as they develop programs and expertise
to serve vulnerable populations with social and behavioral issues (pull). These
unprofitable programs, many supported with policy-based funding, lead to
increased market share for unprofitable populations—the purview of safety-net
missions. One way SNPs can strengthen driving forces related to mission and
generate support for policy-based funding is by forging strategic alliances with
organizations concerned with vulnerable populations.
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Although care management is useful to contain costs and reduce
unnecessary use of services, cost savings from these efforts are illusionary for
several reasons. First, cost avoidance or savings from preventative steps are
difficult to document, then savings may materialize in one part of the system while
costs are incurred by a different part of the system. In addition, because subsidies
are not linked to individual patients, safety-net providers rely on economies of
scale to provide services to large numbers of individuals. This practice delinks
costs as well as savings from funding. In the end, savings that could potential lead
to staff or infrastructure reductions are difficult to isolate and to extract. The cost
per unit of service is one benchmarked that safety-net providers can use to
document savings from care management and to measure cost effectiveness.
Managed care is also creating new structures. Risk-based systems give
purchasers the ability to shift risk to providers and to create incentives for
prevention, primary care, care coordination, and more cost-conscious care
delivery. These are elements of care management. In similar fashion, Medicaid
managed care is also creating new structures such as health plans that develop
around safety-net providers. In these arrangements, health plans adopt a dual
role of principal-agent for the state and safety-net providers when they serve as
conduits of Medicaid funds to safety-net providers and when safety-net providers
own health plans. These health plans become part of the safety-net fabric,
particularly when they also have responsibilities for indigent care. Medicaid health
plans rely on safety-net providers to meet managed care contract obligations and
their success is intertwined. These somewhat symbiotic relationships create an
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opportunity to broaden the base for the safety net by transferring mission
responsibilities to safety-net health plans. Contract relationships can be used to
define roles and responsibilities so that funding can be used more efficiently and
saving redirected to offset cost of the uninsured. Health plans with overall
responsibilities for healthcare costs can a) provide incentives for enrolled
populations and employers to take responsibility for health behavior and b) ration
healthcare products and services more effectively through benefit plans and
provider contracts.
Table 6-5 lists the driving forces underpinning the theorized business case.
Safety-net health plans may enable state Medicaid agency to combine risk-based
contracts with policy-based funding to reestablish a funding source for safety-net
missions and the uninsured, non-members in today’s health system.
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Table 6-5
Force Field Model: Theorized Business Case
Driving Forces in the Theorized Business Case
T1. Safety-net providers are distinguished among other health care providers because
they provide access to care irrespective of ability to pay.
T2. Managed care economics links healthcare dollars to insured individuals, making
the uninsured undesirable in the market.
T3. An insurance-based health system creates members and non-members, and non
safety-net providers adopt protective strategies to keep non-members out.
T4. Restricted access to health care for the uninsured increase demand for safety-net
services.
T5. Working to remain viable under Medicaid managed care, SNPs adopt care
management programs and population-based strategies required.
T6. Faced with uncompensated care for populations seeking care for preventable
conditions, SNP adopt care management programs to control cost.
T7. As they develop programs and expertise to retain traditional populations, SNPs
increase market share of nonmember populations.
T8. Managed care economics, impervious to policy-based funding, erodes cross
subsidies for the uninsured, leading to budget pressures.
T9. Being competitive is important to retaining existing markets but not necessarily
consistent with safety-net missions.
T10. Safety-net missions to fill community needs and gaps created by market failure
depend on policy-based funding.
T11. With managed care contracts, purchasers influence provider behavior.
T12. Medicaid managed care is creating health plans with principal-agent roles.
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6.4 Conclusion
Care management is a prudent business strategy for providers concerned
with fixed budgets, but there is no viable business case when cost or
uncompensated care is the overriding restraining force and safety-net providers
operate in competitive markets. The problem of access to care for the uninsured
is both a market problem and a public policy question about the uninsured and
about the role of safety-net providers in today’s healthcare system. How should
society pay for healthcare for the uninsured? What does it mean to be a safety-net
provider? Are safety-net providers expected to compete in the market by the
same rules as non-safety-net providers?
The U.S. healthcare system is an employer-sponsored health insurance
system, with government substituting for employers for low-income and select
populations. Many of the uninsured are workers or dependents of workers.
Expanding health coverage for the uninsured through employers or government is
a market solution and answers the first question. With this solution, safety-net
providers would then compete for both Medicaid and the uninsured. Is competing
consistent with the safety-net mission? The answer in this writer’s opinion is
“no’’—by definition, safety-net providers have a mission to provide healthcare
access for those undesirable in the market. For this reason they are dependent on
policy-based funding.
In today's health industry, care dollars are linked to insured individuals, and
insurance is driving service delivery with a single-minded focus on cost. This
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reality creates haves and have-nots, members and nonmembers. Is universal
health insurance coverage the answer to the problem of the uninsured? The
answer in this writers opinion is again “no”—health insurance is intended to
mitigate risk for policyholders at prices that offset the risk for payers. Another
reason why universal health insurance is not the answer is because much of
health is unrelated to healthcare delivery. Primary prevention and public health
interventions play a greater role in improving health status than personal care,
traditionally covered by health insurance. In addition, there will always be
undesirables in the market place that will need a health care home, even with
health insurance coverage—assuming it was affordable. The undesirable today
are the uninsured as well as the undesirables of yesterday—the homeless, the
mentally ill, incarcerated inmates, etc. Tomorrow the undesirables may those in
need of new genome discoveries or technology unsustainable in a market
environment.
As Albert Einstein once observed, we cannot solve problems we create
using the same eyes we used to create them. Finding specific mechanisms by
which access for the uninsured can be improved is not straightforward. One
alternative to universal health coverage is thoughtful development of principal-
agent relationships between state Medicaid agencies, local health departments
and safety-net health plans where entire communities are the focus. Managed
care has created dual principal-agent roles for MCOs. Purchasers (the principal)
use at-risk contracts to delegate responsibilities to MCOs (the agents).
Transferring risk to providers, MCOs (the principal) delegate responsibilities to
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providers (the agents). Increasingly, purchasers are using at-risk contracts to
create incentives for prevention, more cost-conscious care delivery, and
monitoring of outcomes. The limitation is that these arrangements are restricted to
members. These efforts would be more effective if policy-based funding combined
responsibilities for public health, health promotion, and primary prevention and
were available on community or population basis to sen/e the uninsured and other
nonmembers. MCO's in these principal agent roles could also be instrumental in
generating involvement of communities in promoting health and preventing
disease.
Appropriately structured principal-agent relationships would enable
prospective management of the care of seriously ill patients instead of dealing with
the consequences of unmanaged care. Permitting locally-based safety-net
provider systems to form local health plans or managed care organizations allows
autonomy and flexibility to adapt to local conditions and delivery networks. State
Medicaid agencies should continue to experiment with models that forego or limit
risk, adjust for risk more accurately, or tie bonus incentives directly to performance
measures and other models to care for communities, particularly those with
demonstrated health disparities. Safety-net providers can also work with local
communities, developing servant roles and cost effective models of care to
engender local visibility and local funding to sustain safety-net missions.
Future research efforts should be undertaken to explore the reaches of
using agency theory for Medicaid managed care contracts and policy-based
funding to structure mission responsibilities as part of safety-net health plan
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structures. Research to better understand the restraining forces to care for the
uninsured is also warranted. How do social and political forces contribute to the
creation of a health system with over 40 million nonmembers? What special
implications are there for people of color, with different cultures and languages—
groups overrepresented in the ranks of the uninsured? Further, what is the role of
public accountability and how can it be used to stimulate healthcare business
practices that place primacy on quality and access.
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A p p e n d ic e s
Appendix A
Appendix B
Appendix C
Appendix D
: List of Care Management Subject Experts
: Telephone Survey Participants and Sites Visited
: List of Expert Interviewees
: Interview Guide for Care Management Subject
Expert Interviews
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A ppendix A
List of Care Management S ubject Experts
296
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List of Care Management S ubject
Experts
Experts who shared their knowledge about the development, location, and current
status of care management for chronically ill, uninsured populations:
Dennis Andrulis, Ph.D.
Department of Preventive Medicine,
NY Academy of Medicine
Brooklyn, NY 11203
Richard J. Bringewatt
President & CEO
National Chronic Care Consortium
Bloomington, MN
E. Richard Brown, Ph.D.
Director, Center for Health Policy
Research, UCLA
Los Angeles, CA 90095-1772
Carolyn M. Clancy, M.D.
Director, Center for Outcomes and
Effectiveness Research
Agency for Healthcare Research and
Quality
Rockville, MD 20852
Don Berwick
President & CEO
Institute for Healthcare Improvement
Boston, MA 02215
Karen Brodsky
Vice President for Programs
Center for Health Care Strategies
Princeton, NJ
Betsy Carrier
Vice President of Managed Care
National Association of Public
Hospitals and Health Systems
Washington, D.C. 20004
Tom Curtin
Clinical Director
Kathy McNamara National Association
of Community Health Centers
Washington, D.C. 20036
List continues next page
297
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Elinor (Elli) Hall, MPH
Healthcare Practice Management
Portland, Oregon 97221
Lisa Payne-Simon
Deputy Director of Quality Initiative
California Healthcare Foundation
Oakland, CA 94607
Edward H. Wagner, M.D., M.P.H.
National Program Director
Improving Chronic Illness Care
Initiative
Group Health Cooperative of Puget
Sound
Seattle, WA 98101
Denise K. Martin
President & CEO
California Association of Public
Hospitals and Health Systems
Berkeley, CA 94704
Kevin Piper
Vice President
Alpha Center for Health Planning, Inc.
Washington, D.C. 20036-1701
Lucien Wilson, Jr.
Project Director
Insure the Uninsured Project
Santa Monica, CA 90401
298
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A ppendix B
T elephone S urvey Participants and Sites V isited
299
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Study Sites
Safety-net providers with care management programs that also serve the
uninsured that participated in this study:
Judy Bulcroft
Director Care Management
MetroHealth Medical Center/Clinical
Utilization Management Improvement
Cleveland, OH
M r. Milt S. C am hi
CEO
Pauline Jones
Director of Nursing
•Contra Costa Health Plan
Martinez, CA
Andrea Castell
Program Coordinator, Managed Care
Puget Sound Neighborhood Health Center
Seattle, WA
Michael Earnest, M .D .
Linda Lenande
Denver Health and Hospital System
Denver, CO
Jacqueline C herew ick
CEO
Huntington Beach Community Clinic
Huntington Beach, C A
Larry Fields, M .D .
CEO
‘ Saint Louis ConnectCare Health System
St. Louis, MO
List continues next page
* Denotes case study sites.
300
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Frances Hoffm an
Admin Support Services
Nancy Halford
VP Patient Services, North Iowa Mercy
Health Center Network
Mason City, IA
Ian Jones, M .D .
Senior VP, Chief of Quality
Crozer-Keystone Health System
Springfield, PA
Peggy McLoughlin, R N
•Jackson Memorial Hospital
Diabetes Disease Management
Miami, FL
Cretta Johnson
Director
Hillsborough County Healthcare Plan
Hillsborough County, FL
Vicki Lam ar
Case Manager
Susan Jo Thomas
Program Admin., Wishard Advantage
Wishard Health Services
Indianapolis, IN
Gary McWilliams, M .D .
Juanita Simons
Director of Nursing
Carelink
San Antonio, TX
Jane Munger
Manager of Disease Management and
Quality
•Parkland Health & Hospital System
Dallas, TX
M s. Kathy O'Brien
Community Health Network of SF
Emergency Dept. High User Program
San Francisco, CA
Gloria Orellano
Latino Health Access Program
Santa Ana, CA
Joan Reibm an, M .D .
Bellevue Hospital Center
Primary Care Asthma Clinic
New York, NY
Veronica Richardson
•Grace Hill Neighborhood Health Center
St. Louis, MO
Bill Schlesinger
Co-Director
El Paso Project Vida
El Paso, TX
Ralph Silber, M .D .
Rhonda Aubrey
Project Director
•Community Health Center Network
Oakland, CA
Tom Traylor, Vice President
•Boston Medical Center HealthNet Plan
Boston, MA
List continues next page
This program serves the uninsured, but did not have a care management program at the time of the
interview.
301
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Chris Walker
Program Coordinator
Athena Philis-Tsimikas, M .D .
•Project Dulce
San Diego, CA
David Ziemer, M .D .
Barbara Boyd, Health Educator
Grady Health System—Diabetes Control
Atlanta, GA
Sarah Williams
Clinic Manager
Barbara Snell
Clinic Administrator
South Madison Health and Family Center
Madison Department of Public Health
Madison, Wl
302
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A ppendix C
List of Expert Interviewees
303
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Model S ubject Experts
Experts who contributed their insight to improve the business case
Drivers and Incentives:
Robert Beltran, M.D. Carmela Castellano
Medical Director CEO
Clinica de la Raza California Primary Care Association
Oakland, CA Sacramento, CA
Mickie Beyer Catherine Dobbs, R.N.
CEO Director
Council of Community Clinics Region 9, U.S.H.H.S.
San Diego, CA San Francisco, CA
Elena Rios Robert Valdez
President Dean
National Hispanic Medical Association School of Public Health
Washington, D.C. MCP Hahnemann University
Philadelphia, PA
Lucien Wilson, Jr. Irene Ybarra
Project Director President & CEO
Insure the Uninsured Project Alameda Health Alliance
Santa Monica, CA 90401 Oakland, CA
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A ppendix D
Interview Guide for
Care Management Subject Expert Interviews
305
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Interview Guide
Name:
Organization:
Email:
Phone:
BACKGROUND
Background information was obtained on the informant from web and
literature searches prior to the telephone interview.
INTERVIEW QUESTIONS
1. Are you or your organization doing research now in the area of uninsured, care
management or safety-net organizations? Please share with us your related
work?
306
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2. What have you learned in your work that would apply or contribute to this
project on care management for the uninsured? Either in the hypothesis that
mission driven organizations, on fixed budgets, migrate to care management
as a protective strategy or on the component parts—uninsured, safety-net
organizations, care management?
3. Are you aware of other policy or professional organizations that may be doing
research in care management for the uninsured?
4. What type of safety-net organizations do you believe are serving the
uninsured? We are using safety-net organization broadly—this may include
health care providers, health plans, counties, states, employers, religious
groups, etc.
5. Oo you know of any organizations that may have care management programs
for the uninsured?
• How prevalent do you think these programs are?
• What do you believe would be the incentives for organizations to develop
care management programs for the uninsured? (i.e., clinical or business?)
• Is that an intuitive belief, or do you know of research that has been done in
this area?
307
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6. If you were a safety-net organization, on a fixed budget, what would you need
to know about these programs to be convinced that care management for the
uninsured made sense?
7. Who else knows about access to care for uninsured?
• Do you have suggestions about anyone else we should speak with or;
• Other organizations that are now providing care, or planning to provide
care, to the uninsured that would be valuable for us to target or to leam
more about their programs?
INTERVIEWERS:
DATE:
308
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A ppendix E
Program Screening S u rvey
309
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Survey
QUESTIONS
1. Do you have a care management program?
What components does it have?
Care Management Components Yes/No
Clinical
Disease protocols, clinical guidelines, compliance
monitoring, case management
Patient Education and Support
Understand and manage patient’s condition
and help to change patient’s belief about their
condition
Outreach education and secondary prevention
programs
Social services
Data Analysis and Profiling
Utilization and Cost Tracking
Staff Training
310
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2. Whom does your program serve?
Chronic illness population
— Top ten diagnosis, diabetes, etc.
Demographics of patient population
— Adults, ethnicity, etc.
Uninsured
3. How is the program funded?
4. Would you be willing to participate in our survey?
5. Who would be the best person to talk to?
6. When would be a good time?
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A ppendix F
Study S ite T elephone S urvey
312
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Telephone Survey
Program Name
Interviewee Phone
Address City
Interviewed by: Date
GENERAL OBSERVATIONS
1. History: Let’s begin by talking about how your program started.
Purpose: From where did the idea for the program come? What was the
impetus for developing the program? What needs were identified?
What goals did you set out for the program at the onset?
Start-up funding: From where did the funding to get it started come?
Duration: How long have you been in operation?
2. Lessons learned: Looking back, what have you learned?
Goals: Are you satisfied that your program is meeting the need(s) you set
at the onset? Have your goals changed?
313
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What do you think were the most important factors that affected the
success of the program?
What activities do you think are making the greatest difference? How?
Based on your experience, how would you design the program differently?
Would you go about starting it differently?
3. “Warnings and advice”: What advise would you give to someone wanting
to start a care management program today?
Are there critical program components/decision junctures that they need to
know about?
Are there warnings that you would give them?
4. Future intent: What value has the program had for you?
Do you plan to continue the program?
5. What threats exist for your program?
EVALUATION—IMPACT
6. Known impact: Do you know whether any of the program activities
have made a difference in the health condition of your population?
Give examples.
Has it made a difference in your ability to serve the uninsured more cost
effectively? Can you give an example?
7. Evaluation: How is your program evaluated? (Ask for copies of
existing reports)
What did you learn from the evaluation?
314
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COST TRACKING INFORMATION
8. Cost tracking systems: Do you have systems to track utilization and/or
cost and benefits of your program activities?
How was the tracking system developed?
What are you tracking? (Please check all that apply)
Improved Access
Health status
Reduced or inappropriate ER use
Reduced or inappropriate inpatient use
Improved cost-effectiveness
Patient satisfaction
Other? Describe:
What are the staff and resource requirements necessary to maintain your
tracking system?
What did it cost to implement the tracking system?
Where did funds come from?
9. Return on investment: What savings have been achieved?
How has the program helped you managed your cost?
PROGRAM DESCRIPTION
ROGRAM DESCRIPTION—POPULATION
1. Program population: Whom are you serving?
315
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2. Demographics of population served
Number served by your program?
Number uninsured served by your program?
Number served by your agency?
Number of uninsured served by your agency?
3. Growth:
How much has the program grown in last 3 years?
Why? Program expansion? Demand?
4. Age and Ethnic breakdown of program participants. Please identify the
percentage (%) for each category.
% Age % Ethnicity
Children <12 White
Youth < 18
Black
18-40 Hispanic
40-64 API
65 +
Other
PROGRAM DESCRIPTION—PROGRAM STRUCTURE
1. What is your annual program budget?
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2. How many employees do you have?
Category of Employee
Number of
Employees
Physicians
Mid-level practitioners
RN’s
Other nursing staff
Total employees in program
3. How is your program funded?
Funding Sources %
Grants
Self-pay
Insurance
Medicare/Medicaid
Other: local, state, federal
Is your program self-sustaining? If not, how is it funded?
What would make the program self-sustaining?
4. Describe your leadership structure for the program.
Administration: Physician leadership:
317
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PROGRAM DESCRIPTION—CLINICAL CARE MANAGEMENT
1. What are the objectives of your care management program?
2. How are patients identified?
3. How are they enrolled in your program?
4. Describe care management components that are used.
Disease/ Program Focus
Program Focus Diabetes HTN Asthma j Other
I
C l i n i c a l C o m p o n e n t s
Clinical Guidelines/Disease Protocols
I
I
Risk Identification
Compliance Monitoring
!
Case Management
j
Other
P a t i e n t E d u c a t i o n a n d S u p p o r t j
T raining—Self-Management
Training—Behavioral Change
Psycho-social Support
Table continues next page
318
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Disease/ Program Focus (Continued)
Program Focus Diabetes H TN Asthma Other
P a t i e n t E d u c a t i o n a n d S u p p o r t ( C o n t i n u e d )
Outreach Education
Secondary Prevention Programs
Linking to Social Sen/ices
Transportation
Interpreter Services
i
i
Patient Satisfaction Survey
i
I
Other
I n f l u e n c i n g C l i n i c i a n P r a c t i c e s
Provider Education
Decision Support
(via computers or other means)
i
i
j
Incentives (financial or other)
j
Other
t
i
HOST ORGANIZATION
Name of Host Organization
Public or Private?
CEO Type of
Organization
1. When was the organization created?
319
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2. What is the mission?
3. What is the service area?
4. What patient services does it directly provide? (Check all that apply)
Inpatient Social services
Outpatient Other medical
Specialist Health Insurance
Ancillary services Other: Describe
Public health
5. What is the aggregate budget?
6. How many employees does it have?
7. Where does funding come from?
Funding Sources
% %
Grants Local
Self-pay State
Insurance Federal
Medicare/Medicaid Other
320
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Asset Metadata
Creator
Partida, Yolanda J.
(author)
Core Title
Care management for the uninsured: A force field analysis of the business case
School
School of Policy, Planning and Development
Degree
Doctor of Public Administration
Degree Program
Public Administration
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
health sciences, health care management,OAI-PMH Harvest
Language
English
Contributor
Digitized by ProQuest
(provenance)
Advisor
Clayton, Ross (
committee chair
), Coye, Molly J. (
committee member
), Newland, Chester (
committee member
)
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-c16-159645
Unique identifier
UC11334450
Identifier
3054790.pdf (filename),usctheses-c16-159645 (legacy record id)
Legacy Identifier
3054790-0.pdf
Dmrecord
159645
Document Type
Dissertation
Rights
Partida, Yolanda J.
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Access Conditions
The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...
Repository Name
University of Southern California Digital Library
Repository Location
USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA
Tags
health sciences, health care management