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RESEARCH AND PRACTICE |
Sara Wilensky and Sara Rosenbaum are with the Department of Health Policy, School of Public Health and Health Services, George Washington University, Washington, DC. Dan Hawkins and Heather Mizeur are with the National Association of Community Health Centers, Bethesda, Md.
Correspondence: Requests for reprints should be sent to Sara Wilensky, JD, Department of Health Policy, School of Public Health and Health Services, George Washington University, 2021 K St, NW, Suite 800, Washington, DC, 20006 (e-mail: wilensky{at}gwu.edu).
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ABSTRACT |
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 TOP ABSTRACT INTRODUCTIONMETHODSRESULTSDISCUSSIONReferences |
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Objectives. We analyzed responses to the 2000 Comprehensive Primary Medical Care programs for Medically Underserved Populations Survey and compared them with the 1995 survey results to identify trends.
Methods. Surveys were mailed to all primary care program offices. State primary care program associations reviewed primary care program offices’ responses and completed surveys for offices that did not respond.
Results. We identified 30 qualified primary care programs in 24 states that had an overall funding level of $215 million. Most states allowed funds to be spent on expanding service areas, buying equipment, and hiring and training staff.
Conclusions. Although state funding has increased overall, many states do not have comprehensive primary care programs, and an increasing number of states are experiencing budget deficits that may lead to reductions in existing programs.
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INTRODUCTION |
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TOPABSTRACTINTRODUCTIONMETHODSRESULTSDISCUSSIONReferences |
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Many of the concerns that served as the impetus for the original study remained in 2000, when there were approximately 39 million uninsured individuals in the nation.2 The State Children’s Health Insurance Program, which was established as part of the Balanced Budget Act of 1997, covered more than 3 million children in 2000. Yet, more than 8 million children were uninsured that year, largely because of welfare reform in 1996 that removed the link between welfare and Medicaid eligibility.2,3 Given the recent economic downturn, it is not surprising that the number of uninsured individuals has increased in recent years.
Many of the uninsured and underinsured live in medically underserved communities with a disproportionate number of poor and uninsured residents who have more health and social service needs than the general population.4 The need for health providers in these areas is great, but the likelihood of doctors setting up practices and of clinics opening in medically under-served communities is small unless outside financial support can be obtained. Health care providers, like all other businesses, have trouble securing capital to support their practices in impoverished communities, which results in a need for medical subsidies from external sources, such as the federal and state governments.
As in 1995, managed care is still the dominant mode of health care delivery in the United States. In 1999, 90% of the nonelderly privately insured population enrolled in some type of managed care organization.5 Policy reforms that have generated economic competition in the health care market have reduced providers’ ability to provide free or discounted care. Furthermore, low reimbursement rates have continued to deter providers from accepting Medicaid and Medicare patients. The use of discounted fees, capitated payments, and selective contracting by managed care organizations may result in greater competition for healthier patients and less ability to shift the cost of uncompensated care to other payers, all of which may lead to a reduction in the number of physicians who are willing to provide care to the medically indigent.6
Federally funded community, migrant, and homeless health centers, which have been consolidated under section 330 of the Public Health Service Act, are a vital source of primary care for uninsured and underinsured patients.7 In 2000, 730 federally qualified health centers served more than 9.6 million patients, almost 4 million of whom were uninsured and more than 3 million of whom were Medicaid beneficiaries (unpublished 1999 data from the Bureau of Primary Health Care, HRSA). Some health centers that are supported with funds other than 
330 grants from the federal government are designated by HRSA as having met all of the standards applied to federal health center grantees. In 2000, 111 such so-called "look-alike" health centers served more than 1 million patients (unpublished 2000 data from the HRSA). Even though federal funding levels for health centers are increasing, funding levels are not sufficient to meet the demand. In 2001 and 2002, only 1 in 3 new health center applications was funded; in 2003, the number dropped to 1 in 4.
Health centers are facing an uncertain financial future since the implementation of a new Medicaid prospective-payment system that became effective on January 1, 2001.8 A General Accounting Office report indicates that payments under the new system will be insufficient to maintain necessary growth of community health centers.9 An additional concern is whether payments will cover capital improvements and the construction of new sites. The current Bush administration’s initiative for expanding community health centers provides at least $2.2 billion in federal funds to expand existing and create 1200 new community health centers to serve an estimated 6.1 million additional patients by 2006. This proposal, which has gained considerable congressional support, resulted in a $175 million health center funding increase for fiscal year 2002 and a $161.6 million health center funding increase for fiscal year 2003. It also funded the establishment of 83 new health centers in 2002.
Despite the infusion of funds from the Bush administration’s expansion initiative, other factors have hindered the growth of community health centers. The administration’s proposal to place aggregate limits on federal Medicaid expenditures and to eliminate many of the program’s service and payment requirements might be expected to dwarf any modest discretionary appropriations increases.10 Additionally, many states are experiencing budget crises, which has resulted in a significant decrease in state funding. State primary care program associations reported $40 million in cuts to direct funding for health centers, which is a significant decrease but is much lower than the level of cuts projected earlier. The lower-than-anticipated level of cuts may have been caused, in part, by the temporary enhancement of the Federal Medicaid Assistance Percentage, which is used to calculate federal Medicaid matching rates for each state. Unfortunately, this matching rate enhancement, which is part of the Jobs and Growth Tax Relief Reconciliation Act of 2003, was a onetime funding increase that expired in June 2004.11
With all of these challenges to the health care system, state funding for primary care services remains a vital component of the primary care delivery network. At the time of the initial survey, there was a dearth of evidence related to levels of state funding for comprehensive primary care services, and anecdotal evidence suggested that states tended to focus on funding programs that furnished selected basic health care services. Additionally, managed care organizations may favor contracting with a few comprehensive primary care service providers to offer the full range of basic services in the most efficient manner instead of contracting with numerous single or limited-services primary care providers.
Our update of the 1995 survey tracks state funding levels over the past several years and evaluates changes in the types of programs that the states have chosen to fund. As an update of the previous comprehensive primary care survey, our article is limited in scope. To make our findings comparable to those of the previous survey, we used an almost identical survey instrument. However, because of the survey design, it was not possible to evaluate why certain states chose to fund new programs or to stop funding existing programs, to describe the impact of program changes in various states, or to assess how health outcomes varied on the basis of whether individuals used or did not use these state-funded programs. Although we cannot answer these important questions, our update provides background information that can be used for further research of these issues. Finally, this survey focused on state-funded comprehensive primary care medical programs as defined in the survey instrument; however, we recognize the importance of other targeted state and federally funded health care programs that fill additional needs in the community.
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METHODS |
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TOPABSTRACTINTRODUCTIONMETHODSRESULTSDISCUSSIONReferences |
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As was done in 1995, we surveyed primary care offices in all 50 states and the District of Columbia. We contacted the state primary care program associations and asked them to review the primary care offices’ responses. If primary care offices did not complete the survey, we asked the state’s primary care program association to do so. We received surveys from either primary care offices or primary care program associations or both in 48 states and the District of Columbia (no surveys were received from Louisiana and Rhode Island). After we reviewed the surveys, we identified 30 qualified programs (i.e., ones that fit all of the survey criteria) in 24 states.
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RESULTS |
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TOPABSTRACTINTRODUCTIONMETHODSRESULTSDISCUSSIONReferences |
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Since 1995, 9 states have established new programs and 4 states have terminated existing programs, for a net increase of 5 states operating qualified comprehensive primary care programs in 2000.12 Eighteen states had 1 comprehensive primary care program, whereas 6 states had 2 programs. Table 1
shows the number of programs (if any) in each state, the funding level for programs in 1995, and the funding level for programs in 2000.12 Table 2 shows a state-by-state breakdown of changes in both program availability and funding from 1995 to 2000.12
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The 2000 survey found that a significant portion of states allowed comprehensive primary care programs to fund 3 areas: expanding service areas (79.2%), buying equipment (79.2%), and hiring and training staff (75%). Approximately half of the states permitted program funds to be used for modernizing facilities (50%), recovering costs not met through third-party payments (50%), and developing and operating management information systems (45.8%). Other permissible uses of funds included renovating an acquired site (41.7%), developing a new practice (37.5%), and developing practice networks for the purpose of affiliation with 1 or more managed care plans (25%). Figure 1 shows how the permitted uses of state funds changed between 1995 and 200012; Table 3 shows permissible uses of primary care funds by state for 2000.12
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DISCUSSION |
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TOPABSTRACTINTRODUCTIONMETHODSRESULTSDISCUSSIONReferences |
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After reviewing the results of the 1995 survey, we questioned whether managed care companies would alleviate provider shortages by placing primary care providers in medically underserved areas. Unfortunately, no evidence exists that such placement has occurred. Instead, managed care companies often rely on established federally funded community, rural, and migrant health centers to be the primary care providers in medically underserved areas. However, payments from managed care organizations are not sufficient to cover the costs of providing contracted services. Aggregate losses incurred by community health centers are substantial enough that executive directors and chief financial officers must divert costs to federal grants that are properly attributable to Medicaid.13 Managed care organizations may be reluctant to expand into medically underserved rural areas because it is difficult to remain viable in rural areas with sparse populations. Furthermore, in providing primary care services to low-income patients, managed care entities often neglect the enabling services—such as transportation, translation, and night and weekend hours—that have proven effective in federally qualified community and migrant health centers.
Given this backdrop, state funding for comprehensive primary health care programs remains a vital component of the health care delivery system in the United States. In the aggregate, more funds were being committed to these primary care programs in 2000 than in 1995. Twenty-four states had qualified programs in 2000; however, the bulk of the funding came from only a handful of states. The 5 states with the highest funding levels—New York, Indiana, Florida, Arizona, and Texas—accounted for more than 60% of the overall state dollars dedicated to qualified comprehensive primary care programs in 2000.
Some of the increase in funding was made possible by the tobacco settlement. Only 21% of the states reported use of tobacco settlement money for their primary care programs, but it is likely that some of the general-revenue money used to fund these programs also could be traced back to tobacco settlement money put directly into state coffers. Several states, such as Indiana and Massachusetts, have committed a large portion of their tobacco settlement money to primary health care programs. Unfortunately, many states have not used any of their tobacco settlement money to promote health programs, including comprehensive primary care programs.14
Some states that have agreed to or promised to use tobacco settlement funds for health-related programs are Arizona, California, Florida, Hawaii, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, Oregon, Washington, and Wisconsin. However, many state legislatures have focused on other areas such as education ($86 million in Michigan for fiscal year 2000, $377 million for medical education in Minnesota, 40% for a scholarship fund in Nevada, and $350 million in Texas for fiscal years 1999–2002) and aid to tobacco farmers or have yet to decide how the funds will be spent.14
Even in the states that have put their tobacco settlement money toward primary care programs, it is unclear whether these states will continue funding these programs when the tobacco settlement money runs out or if other programs will start to receive some of the tobacco settlement money.
The 2000 study also revealed a shift in the types of programs that the states are funding and an increased flexibility in the types of providers who qualify for state funding. In 1995, states focused on creating new service sites, developing managed care networks, and supporting homegrown programs developed with state funds. Conversely, in 2000, states emphasized expanding the service areas of existing programs, buying equipment, and hiring and training staff. By 2000, all of the states dropped the requirement that programs be funded with state money, and the number of states that allowed funds to be used for managed care networks declined by more than half.
In general, the states are attaching fewer requirements to their primary care funding programs, and they are giving more applicants the opportunity to qualify for money even if they are not public or private nonprofit entities, do not use a sliding-scale fee structure, and do not require a needs-based condition. Studies have shown that community health centers provide cost-effective care, improve access to care, increase use of preventive care, and reduce emergency room visits.15 Although only 21% of the states specifically require program applicants to receive federally qualified health center funding, many states have requirements that are consistent with federally qualified health center guidelines. For example, an increasing percentage of states mandate that program applicants have community governing boards, and most states still require practices to use a sliding-scale fee structure and to be in a location that satisfies a needs-based condition as a prerequisite for obtaining state funding. Surprisingly, only two thirds of the states require applicants to participate in Medicaid, and a mere 37.5% require applicants to participate in the State Children’s Health Insurance Plan.
The 2000 study findings, like the 1995 results, suggest that many states recognize the need for increased funding of comprehensive primary care programs and often find federally qualified health centers to be the appropriate vehicle for increasing their supply of comprehensive primary care services. Yet, state funding alone is not sufficient for providing all of the needed primary care services in medically underserved populations. Many states do not have any qualified comprehensive primary care programs. An increasing number of states are experiencing budget deficits, and because primary care programs are not established as entitlements there is no guarantee that funding will continue at current levels. Very few states are planning to expand eligibility or enrollment in their coverage programs beyond current levels, and it appears unlikely that any state will establish new coverage options under state sponsorship. Many states are making significant cuts in the levels of funding dedicated to health centers. Because of the very real possibility of reduced state support for these important programs in the future, it is more crucial than ever to evaluate the impact that the primary care programs we surveyed and other state-funded primary care programs have on both access to care and health outcomes for medically underserved populations.
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Footnotes |
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Contributors
S. Rosenbaum directed the study design and assisted with the analysis and the writing of the article. S. Wilensky conducted the survey, tabulated the survey results, and drafted the article. D. Hawkins and H. Mizeur assisted with study design, the analysis, and the writing of the article.
Human Participant Protection
No protocol approval was needed for this study.
Accepted for publication June 29, 2003.
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References |
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TOPABSTRACTINTRODUCTIONMETHODSRESULTSDISCUSSIONReferences |
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2. US Bureau of the Census. Current Population Survey: Annual Social and Economic Supplements. March 2000 and 2001. Washington, DC: US Bureau of the Census; 2000, 2001.
3. Center for Medicare and Medicaid Services. SCHIP Enrollment Reports. Available at: http://www.cms.gov/schip/enrollment/fy2000.pdf. Accessed February 4, 2004.
4. Zuvekas A, McNamara K, Bernstein C. Measuring the primary care experiences of low-income and minority patients. J Ambul Care Manage. 1999;22:63–78.[Medline]
5. Rosenblatt R, Rosenbaum S, Frankford DM. The financing and organization of health care. In: Law and the American Health Care System. New York, NY: Foundation Press; 1997;280–529(suppl.): 543–647.
6. Cunningham P, Grossman J, St Peter R, Lesser C. Managed care and physicians provision of charity care. JAMA. 1999;282:1087–1092.
7. Public Health Service Act, 42 USC 254(b) (1999).
8. Social Security Amendments of 1965, 42 USC sec. 1396a(aa) (2002).
9. US General Accounting Office. Health Centers and Rural Clinics: Payments Likely to be Constrained under Medicaid’s New System. Washington, DC: US General Accounting Office; 2001. GAO-01-577.
10. Kaiser Family Health Foundation. Bush administration Medicaid/SCHIP proposal. Available at: http://www.kff.org/medicaid/4117-index.cfm. Accessed February 2, 2004.
11. Schwartz R, McKinney D. Critical Condition II: Update on the Impact of the State Budget Crises on Health Centers. National Association of Community Health Centers, Bethesda, MD; 2003. State Policy Report No.1.
12. Analysis of 2000 State-Funded Comprehensive Primary Medical Care Services Programs for Medically Underserved Populations Survey. Washington, DC: George Washington University Center for Health Services Research and Policy; 2002.
13. Wilensky S. Managed care and health centers: an overview and analysis. Paper presented at: Policy and Issues Forum of the National Association of Community Health Centers; March 15–20, 2002; Washington, DC.
14. Campaign for Tobacco Free Kids. State initiatives. Available at: http://tobaccofreekids.org/campaign/state. Accessed February 2, 2004.
15. Davis K, Collins KS, Hall A. Community Health Centers in a Changing US Health Care System. The Commonwealth Fund, New York, NY; 1999. Policy Brief No. 300.
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| HOME | HELP | FEEDBACK | SUBSCRIPTIONS | ARCHIVE | SEARCH | TABLE OF CONTENTS |
