As Mass. Goes, So Goes California? Questioning the Safety Net's Future

by Matthew Wayt, California Healthline Associate Editor

TOPIC ALERT:

"What will happen to safety-net health care facilities when their patients obtain insurance?" That's one of many questions that county officials in California are asking about how the Affordable Care Act will affect health centers that serve patients regardless of ability to pay.

The possibility of losing patients because of the ACA -- and of losing funding under state proposals to expand Medi-Cal, California's Medicaid program -- have led some to wonder what will become of the health centers.

The future may be bleak in the eyes of some California officials, but health reform efforts in Massachusetts tell a different story.

Dire Expectations

Experts estimate that about three to four million California residents -- about 10% of the state's population -- will remain uninsured even after health insurance coverage is expanded under the ACA. These people likely will keep seeking care at safety-net providers, such as county health centers and community health clinics.

However, a wealth of current safety-net patients will be newly eligible for insurance under the law. For example, the Medi-Cal expansion will offer coverage to individuals with incomes up to 138% of the federal poverty level, or $15,415 annually.

Some county officials predict that these people will seek care elsewhere once they are insured, according to the Los Angeles Times. Such a sea change could mean a significant loss of revenue for safety-net facilities.

Do all stakeholders in California expect such a dire outcome? "No," answered Carmela Castellano-Garcia, president and CEO of the California Primary Care Association. In an interview with California Healthline, she said of the sour prediction, "We have seen no evidence of that."

She said certain safety-net providers "expect to retain many newly insured individuals," noting, "We've already seen this play out in Massachusetts."

The Massachusetts Story

In 2006, Massachusetts began implementing a health care law that some say was a key inspiration for the ACA. The law has resulted in near-universal coverage among Bay State residents.

Newly insured individuals could have begun seeking care at physician offices rather than at safety-net facilities, but they did not, said Kerin O'Toole, public affairs director at the Massachusetts League of Community Health Centers. She told California Healthline, "We thought we would lose some of our patients once they had insurance cards in hand. In fact, the opposite occurred: not only did our patients stay -- we gained new ones."

According to a George Washington University study published in the Archives of Internal Medicine, Federally Qualified Health Centers in Massachusetts saw a 31% increase in patients -- or 134,000 more individuals -- between 2005 and 2009. O'Toole said that the uptick has continued: "We have added more than 50,000 patients since 2009." FQHCs are community-based health centers that provide primary and preventive care and receive federal reimbursements.

The study authors wrote that the facilities "remain a vital source of care even when people gain insurance" and that an overwhelming majority of patients who use community health centers do not view them as providers of last resort but rather "prefer the types of care offered there." According to the study, patients cited several reasons for preferring the facilities, such as convenience, affordability of care and the presence of providers who speak non-English languages.

The Problem of Staffing

One difficulty that Massachusetts has faced while providing care for more individuals through safety-net facilities is a lack of physicians willing to work at the centers, according to O'Toole.

California already has experienced that problem, even ahead of ACA implementation. Castellano-Garcia said community health clinics in the state "are having challenges with recruiting physicians; they are having challenges with retaining physicians, as there's increased competition now because everybody's trying to expand and gear up for health care reform. Not just the community health centers, but the entire health care industry is facing the impact of this crisis."

She is concerned that Massachusetts' problems staffing the health centers also will occur in California, noting that there was "tremendous demand" on community health centers in Massachusetts after the overhaul, causing the facilities to be "overwhelmed."

However, O'Toole said the Bay State is working on solutions to the problem. For example, it launched the Community Health Center Primary Care Provider Loan Repayment program, which offers medical and nursing school loan repayment to primary care physicians and nurse practitioners who make a two-to-three-year commitment to practice at one of the state's 49 community health centers.

The Problem of Funding

Although California could follow Massachusetts' example in efforts to boost physician staffing at community health centers, there may be no precedent for a unique situation in the Golden State that could jeopardize county funding for safety-net providers.

Although some community health centers -- FQHCs -- stand to gain more funding under ACA, others that rely on state funding could take a hit under Gov. Jerry Brown's (D) Medi-Cal expansion plans.

Brown's fiscal year 2013-2014 budget proposal earmarked $350 million to cover the increased Medi-Cal enrollment. Although the federal government will fund the expansion for the first few years, Brown has said that the state might try to cover costs in subsequent years by reducing the roughly $2 billion it provides counties each year to cover health care services for uninsured individuals.

County officials have expressed concern that such proposals could have a negative effect on their safety-net facilities.

Castellano-Garcia said, "While certainly the gravest problem for the state would be to not expand Medi-Cal, we would be concerned if the state moved on proposals that would take away county funding for health centers."

At a hearing of the Assembly Budget Subcommittee on Health and Human Services this month, Mitchell Katz -- director of the Los Angeles County Department of Health Services -- said state indigent care funding already does not cover county costs for providing treatment, even before the possible influx of new patients.

However, Toby Douglas -- state director of health care services -- said that counties should relinquish some of their indigent care funds because the Medi-Cal expansion "has to be sustainable in the long haul."

A Look Ahead

While Massachusetts may offer clues for how safety-net facilities might play out in California, it's also important to note that the Golden State's unique make up and sheer size make speculation difficult.

But perhaps all conjecture is for naught if the Golden State cannot boost the number of physicians willing to work at safety-net health facilities.

According to O'Toole, the ACA's "commitment to strengthening community-based primary care is tied to an unrelenting shortage of primary care clinicians across the country."

Weekly Roundup

Arizona: Republican Gov. Jan Brewer is battling with the GOP-led legislature -- and striking an unusual alliance with Democrats -- in hopes of pushing the state to adopt the Affordable Care Act's Medicaid expansion, the New York Times reports. Brewer is one of several governors facing resistance from state lawmakers over Medicaid.

Ohio: Gov. John Kasich (R), who also has come out in favor of the ACA's Medicaid expansion, is now negotiating with federal officials over adopting a model that resembles Arkansas' expansion plan, according to the Wall Street Journal.

ACA implementation: A slew of changes are coming to the health insurance market in 2014, such as limits on how much insurers can charge their oldest customers, the Washington Post notes. But a recent Commonwealth Fund report found that about two-thirds of states have yet to update their laws to allow them to enforce these changes.


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