The National Academy of Sciences Institute of Medicine's report America's Health Care Safety Net: Intact but in Trouble released earlier this year was important and long overdue. However, the traditional safety-net problems and related solutions are more complex than a lack of funds or overburdened services, as cited in the report.
Still, the report provides a real opportunity to address issues of access to healthcare for the poor (To view the full report, visit the IOM's World Wide Web site at www.iom.edu). A focus on primary and preventive services should be high on the priority list of important safety-net goals because that's the only long-term solution to caring for the urban poor.
Studies have documented that most of the urban poor could avoid the vast majority of hospitalizations and emergency-room visits if they received proper primary care. Despite higher utilization by the poor, most urban markets have excess inpatient capacity, and many safety-net providers serving the poor have lost significant market share. The competition for this hospital-dependent population has accelerated safety-net instability.
The challenge the IOM report presents is to simultaneously boost access to primary care while reducing excess capacity. What's needed is a dedicated redesign strategy that doesn't try to maintain the status quo by simply spending new healthcare dollars the same way.
The IOM report demonstrates that competition has inherent disincentives and negative results, especially in poor urban communities heavily populated with uninsured, low-income and immigrant populations. Most healthcare leaders would agree on the effects intense competition has had on urban providers serving low-income populations. Over the past decade, reimbursement incentives to reduce utilization as well as payment rates designed to cut costs have been a familiar pattern nationally. This approach to reducing private and public healthcare budgets has caused widespread destabilization in healthcare. While it's accepted that few communities are exactly alike, many of the healthcare delivery conditions and circumstances surrounding access for the poor in various cities are strikingly similar.
The HSC (Health Services for Children) Foundation in Washington conducted a report, which was commissioned by the Commonwealth Fund of New York, titled Health Care Challenges Facing Large Urban Communities: Assuring Access for Low-Income, Minority Populations. It notes that as urban hospitals compete to survive by improving services, reducing costs and enhancing marketing and revenue, they face formidable forces and sustained trends working against their efforts. Those include:
* Declining populations in the core of many cities (generally due to middle-class families relocating to the suburbs); and low-income and often chronically ill populations which are left behind.
* Reduced reimbursement from managed care, government and commercial payers.
* Decreased volume because of business incentives and measures that lower utilization.
* Growing numbers of impoverished and uninsured populations isolated in the urban core and having socially complicated chronic and acute-care needs.
These and other factors have exacerbated problems at urban hospitals, increasing barriers to access. Some cities such as Boston and Detroit have experienced a decline in inpatient days of more than 33% in the previous decade; others (Chicago, Houston, Los Angeles, New York, Philadelphia and Washington) have experienced declines of 25% or more. During the past 10 years many cities have lost up to 13% of their population, and urban hospitals have seen serious volume decreases.
The combination of smaller and poorer patient populations, less revenue and reduced volume has led to persistent excess capacity for urban hospitals. These chronic market conditions cannot be addressed by hospital productivity, closures, mergers or financial bailouts. If the community goal is to maintain access to care for the most vulnerable of its population, we must take steps that will work.
The development and maintenance of access to care for the poor must be built on primary and preventive health services. Rational redesign and implementation of effective healthcare delivery systems for the poor are a basic responsibility of public and private leaders. This planning can support efforts to expand insurance and include downsizing and reorganization of hospital capacity.
Many in healthcare believe market forces should be allowed to play out their natural cycle. The problem with this strategy is that access to care for the poor and low-income minority populations will deteriorate further and faster. The difficult aspect of healthcare competition and provider response is the inherent disincentive to care for the high-risk poor, especially the uninsured and those with complicated clinical and social needs. These populations require more time and attention and often exceed the available reimbursement to cover costs under these competitive conditions. Access to care is regularly sacrificed.
The safety net must be redesigned to meet the needs of the urban poor while sober consideration is given to the fact that throwing more money at urban hospitals won't address the excess capacity problem. The IOM report provides a chance to begin this work. Uncontrolled competitive forces in healthcare markets have in recent years been a destructive and reckless phenomenon leaving a trail of urban communities that have weaker hospitals and poor populations with less access to care.
Ultimately, taxpayers and governments at every level will pay for these problems. Healthcare leaders must offer solutions. The alternative is more disparity between the haves and have-nots in our healthcare system.
Thomas Chapman is president and CEO of the HSC (Health Services for Children) Foundation in Washington.