Ambulatory Care for the Urban Poor: Structure, Financing, and System Stability

Barbara A. Ormond Amy Westpfahl Lutzky

Occasional Paper Number 49

Assessing the New Federalism An Urban Institute Program to Assess Changing Social Policies Ambulatory Care for the Urban Poor: Structure, Financing, and System Stability

Barbara A. Ormond Amy Westpfahl Lutzky

Occasional Paper Number 49

The Urban Institute 2100 M Street, N.W. Washington, DC 20037 Phone: 202.833.7200 Fax: 202.429.0687 E-Mail: [email protected] An Urban Institute Program to Assess http://www.urban.org Changing Social Policies Copyright © June 2001. The Urban Institute. All rights reserved. Except for short quotes, no part of this book may be reproduced in any form or utilized in any form by any means, electronic or mechanical, including pho- tocopying, recording, or by information storage or retrieval system, without written permission from the Urban Institute.

This paper is part of the Urban Institute’s Assessing the New Federalism project, a multiyear project to monitor and assess the devolution of social programs from the federal to the state and local levels. Alan Weil is the project director. The project anaylzes changes in income support, social services, and health programs. In collaboration with Child Trends, the project studies child and family well-being.

The project has received funding from The Annie E. Casey Foundation, the W. K. Kellogg Foundation, The Robert Wood Johnson Foundation, The Henry J. Kaiser Family Foundation, The Ford Foundation, The David and Lucile Packard Foundation, The John D. and Catherine T. MacArthur Foundation, the Charles Stewart Mott Foundation, The McKnight Foundation, The Commonwealth Fund, the Stuart Foundation, the Weingart Foundation, The Fund for New Jersey, The Lynde and Harry Bradley Foundation, the Joyce Foundation, and The Rockefeller Foundation.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

This paper would not have been possible without the cooperation of the members of the health care communities in Denver, Houston, and Los Angeles. The authors gratefully acknowledge the time and effort they com- mitted to this study. ssessing the New Federalism is a multiyear Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states, focusing primarily on health care, income security, employment and training programs, and social services.A Researchers monitor program changes and fiscal developments. In collaboration with Child Trends, the project studies changes in family well-being. The project aims to provide timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively. Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute’s Web site (http://www.urban.org). This paper is one in a series of occasional papers analyzing information from these and other sources.

Contents

Executive Summary vii

Introduction 1

Methods 2

Ambulatory Care Systems and Challenges 2 Comparing and Contrasting the Ambulatory Care Safety Nets 2 Houston 4 Denver 8 Los Angeles 11

System Adjustment to the Changing Health Care Marketplace 15 Eligibility Control 16 Information Management 18 Public Managed Care Plans 19 Organization of Care and System Integration 20 Coordination with Private Ambulatory Care Providers 22 Determinants of System Stability 23 Governance 23 Financing 24 Market Conditions 26 Overall Stability of the Systems 27

Conclusion 29

Appendix—List of People Interviewed 31

Notes 35

References 37

About the Authors 39 vi L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY Executive Summary

Ambulatory care providers are becoming an increasingly important part of the U.S. health care system. Technological progress has made many treatments previously offered only in the hospital now possible in an ambulatory setting. This shift to ambulatory care, while generally recognized as a positive move toward a less expensive and more appropriate health care setting, has often left providers scrambling to adjust to rapidly changing technology and new, complex reimbursement systems. Safety net providers, in particular, have difficulty keeping abreast of a rapidly changing health care system because they serve low-income, uninsured patients and face constraints imposed by their funding sources. This study examines the organization and financing of ambulatory care for the poor in three urban communities—Houston, Denver, and Los Angeles—and the challenges posed to these systems by ongoing changes in the health care sector. Specifically, this study describes each community’s ambulatory care safety net, the challenges each community faces and their responses to these challenges, and the possible determinants of the level of success each has achieved in meeting the ambulatory care needs of their vulnerable populations. In addition, each system is examined from the perspective of long-term stability. This report is based on case studies conducted in the three study communities between October 1999 and February 2000. The authors interviewed local health officials, public and private clinic administrators, health department staff, and community advocates using a standard set of questions developed for each category of interviewee. A separate team gathered information on hospitals and their interactions with the ambulatory care system; these findings are presented in a separate study. While ambulatory care generally refers to any care not provided in an inpatient setting and may even include specialty care at a hospital outpatient department, it is important to note that this report focuses on non-hospital-based primary and preventive care provided in a clinic setting. Specialty care provided at a hospital specialty clinic or physician’s office is treated as a complement to clinic-based primary and preventive care. A distinctive ambulatory care system has developed in each community, reflect- ing the particular constraints and history of each of the safety net systems. These systems differ in the extent to which they rely on publicly provided services for the uninsured population as opposed to public financing of privately provided services. They also differ in the level, reliability, and source of the financial contribution available in support of safety net services. The communities also differ in the strength of their

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ership changed? Would expanding its service area lead to an unsustainable level of level unsustainable an to lead area service its expanding Would changed? ership

Could the Denver public safety net maintain its level of accomplishment if its lead- its if accomplishment of level its maintain net safety public Denver the Could

cess and long-term stability of the ambulatory care safety net in these communities. these in net safety care ambulatory the of stability long-term and cess

as to which of these components or combination of components is critical to the suc- the to critical is components of combination or components these of which to as

Given the varying degree of success seen in the three systems, the question arises question the systems, three the in seen success of degree varying the Given

less flexibility to direct funds toward the ambulatory sector. ambulatory the toward funds direct to flexibility less

medical education payments, which are based on inpatient volume. As a result, it has it result, a As volume. inpatient on based are which payments, education medical

trast, is more dependent on disproportionate share hospital funding and graduate and funding hospital share disproportionate on dependent more is trast,

1115 waiver that is targeted toward ambulatory care. Houston’s safety net, in con- in net, safety Houston’s care. ambulatory toward targeted is that waiver 1115

funding for community and public health. Los Angeles has funding under a Section a under funding has Angeles Los health. public and community for funding

receives substantial local funding for ambulatory care services as well as federal grant federal as well as services care ambulatory for funding local substantial receives

flexibility the public system has to direct resources toward ambulatory care. Denver care. ambulatory toward resources direct to has system public the flexibility

Finally, the success of the ambulatory care safety net is linked to the degree of degree the to linked is net safety care ambulatory the of success the Finally,

impose a residency requirement at all and therefore faces nearly limitless demand. demand. limitless nearly faces therefore and all at requirement residency a impose

so experiences substantially higher demand for its services. Los Angeles does not does Angeles Los services. its for demand higher substantially experiences so

net’s funds are derived, serves a substantially larger and more diverse population and population diverse more and larger substantially a serves derived, are funds net’s

However, the Harris County Hospital District, from which the bulk of the safety the of bulk the which from District, Hospital County Harris the However,

Harris County residents and so it has some control over demand for its services. its for demand over control some has it so and residents County Harris

(where Houston is located). Like Denver, Houston limits eligibility for its services to services its for eligibility limits Houston Denver, Like located). is Houston (where

pared with the much larger populations in Los Angeles County and Harris County Harris and County Angeles Los in populations larger much the with pared

Denver County encompasses a small and fairly homogenous population as com- as population homogenous fairly and small a encompasses County Denver

improve the quality of the services it provides, if only by reducing the queue. queue. the reducing by only if provides, it services the of quality the improve

By thus limiting the number of people it serves, Denver’s safety net is able to able is net safety Denver’s serves, it people of number the limiting thus By

native source of care is available to those excluded from the Denver public system. public Denver the from excluded those to available is care of source native

large part of its operating budget is funded by these localities and because an alter- an because and localities these by funded is budget operating its of part large

It is able to limit eligibility to residents of the city and county of Denver because a because Denver of county and city the of residents to eligibility limit to able is It

define the population eligible for its services and to enforce its eligibility standards. eligibility its enforce to and services its for eligible population the define

tem success. For reasons of history, the Denver public safety net is able to strictly to able is net safety public Denver the history, of reasons For success. tem

Our case studies point to eligibility as another factor that strongly influences sys- influences strongly that factor another as eligibility to point studies case Our

assets; Houston has fewer. fewer. has Houston assets;

integrated system to serve a defined population. Los Angeles has some of these of some has Angeles Los population. defined a serve to system integrated

care. The community of Denver has used these assets to put together a successful a together put to assets these used has Denver of community The care.

tus of ambulatory care service is equal to that of other services, including inpatient including services, other of that to equal is service care ambulatory of tus

operates as an equal player in a highly competitive market; within the system, the sta- the system, the within market; competitive highly a in player equal an as operates

and referrals to ambulatory sites for follow-up care. As a system, Denver’s safety net safety Denver’s system, a As care. follow-up for sites ambulatory to referrals and

specialty and inpatient services, facilitating both referrals for nonambulatory services nonambulatory for referrals both facilitating services, inpatient and specialty

temwide information system that links ambulatory care sites with complementary with sites care ambulatory links that system information temwide

financial, and has been given substantial independence. It has implemented a sys- a implemented has It independence. substantial given been has and financial,

and well led. Furthermore, it enjoys substantial local support, both political and political both support, local substantial enjoys it Furthermore, led. well and

on several system characteristics critical to success. It is well funded, well organized, well funded, well is It success. to critical characteristics system several on

Specifically, findings show that the ambulatory safety net in Denver ranks highly ranks Denver in net safety ambulatory the that show findings Specifically,

across the three communities. three the across

health care market conditions within which each system operates are quite different quite are operates system each which within conditions market care health

ambulatory care over hospital-based care where appropriate. In addition, the broader the addition, In appropriate. where care hospital-based over care ambulatory commitment to ambulatory care and in the efforts they have made to encourage to made have they efforts the in and care ambulatory to commitment AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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interests of both patient care and long-term institutional survival. institutional long-term and care patient both of interests

latory care system within the safety net is then the result of decisions based on the on based decisions of result the then is net safety the within system care latory

appears to be key to the successful operation of a public safety net. A strong ambu- strong A net. safety public a of operation successful the to key be to appears

bined with the mission of public service under the constraints of public financing public of constraints the under service public of mission the with bined

to which financial and organizational flexibility and managerial agility can be com- be can agility managerial and flexibility organizational and financial which to

cessful safety net system are similar to those of a successful private system. The degree The system. private successful a of those to similar are system net safety cessful

theless, a comparison of the three systems suggests that the characteristics of a suc- a of characteristics the that suggests systems three the of comparison a theless,

Los Angeles and Houston suggest these questions but provide few answers. Never- answers. few provide but questions these suggest Houston and Angeles Los

reduction in its critical local financial support? The problems faced by the systems in systems the by faced problems The support? financial local critical its in reduction demand for its services? Might changes in the local political landscape lead to a to lead landscape political local the in changes Might services? its for demand

Ambulatory Care for the Urban Poor: Structure, Financing, and System Stability

Introduction

Ambulatory care providers are becoming an increasingly important part of the U.S. health care system. Technological progress has made many treatments previously offered only in the hospital now possible in an ambulatory setting. While insurers are eager to see care moved to what is generally a less expensive setting, the pace of change in technology and reimbursement systems has often left private providers scrambling. Safety net providers are no less beset although the dynamics of change are different. Technological change offers them the same opportunities to move care to an ambulatory setting, and general budget pressures push them to contain costs. While Medicaid managed care has introduced incentives for preventive care and non- hospital-based treatment for publicly insured patients, other mechanisms for reim- bursing providers of care to the publicly insured and the uninsured have been slower to evolve. In part because of the constraints imposed by the funding sources on which they depend, safety net systems have had fewer options for realizing the effi- ciencies offered by the shift away from hospital-based care. This study looks at the organization and financing of ambulatory care for the poor in three urban communities—Houston, Denver, and Los Angeles—and the challenges posed to these systems by the ongoing changes in the health care sector. Distinctive ambulatory care systems have developed in each of the study communities. These systems differ in the extent to which they rely on publicly provided services for the uninsured population as opposed to public financing of privately provided services. They also differ in the level, reliability, and source of the financial contribution available in support of safety net services. Finally, the strength of the commitment to providing care in nonhospital settings, whether the care is publicly or privately produced, varies across the three systems. Ambulatory care generally refers to any care not provided in an inpatient setting and so covers a broad range of services—from primary care at a community clinic or physician’s office to specialty care at a hospital outpatient department. This report focuses on non-hospital-based primary and preventive care provided in a clinic setting. Specialty care provided at a hospital specialty clinic or physician’s office is treated as a complement to this basic level of ambulatory care and not as a separate focus of this study. It is also beyond the scope of this study to determine what portion of hospital emergency department care is for actual emergent or urgent care and what portion for is nonurgent care and, therefore, more appropriately addressed in a clinic setting. Methods

This report is based on case studies conducted between October 1999 and February 2000 in Houston, Denver, and Los Angeles. The authors interviewed local health officials, public and private clinic administrators, health department staff, and community advocates using a standard set of questions developed for each category of interviewee. (See the appendix for the list of interviewees.) A separate team gathered information on hospitals and their interactions with the ambulatory care system. This team has produced a companion report on safety net hospitals that examines these three communities as well as Boston and Detroit (Brennan, Guterman, and Zucker- man forthcoming). This study is part of the Urban Institute’s Assessing the New Federalism project, a multiyear effort to examine changes in social policies for low-income families—and the effect of such changes—as the federal government shifts more authority over social services and health programs to the states. In this project, Urban Institute researchers conducted intensive case studies of 13 states, including Texas, Colorado, and California, and fielded a household survey nationally and in each of the 13 states. Both the case studies and the survey were conducted initially in 1996–1997, and the survey was repeated in 1999–2000 to monitor changes in welfare and health care policies and trends in the well-being of families in the wake of these changes.1 The next section briefly describes the ambulatory care safety nets in the three study communities and the challenges they face. Ways in which the communities have adjusted to meet these challenges are discussed and the determinants of the level of success each has achieved are examined. Finally, the long-term stability of each system is considered.

Ambulatory Care Systems and Challenges

Comparing and Contrasting the Ambulatory Care Safety Nets The ambulatory care safety nets in Houston, Denver, and Los Angeles are similar in their basic structure. In each city, public clinics located in community settings provide primary care to community residents with referrals to a public hospital as necessary. While the public system is the largest provider of safety net ambulatory care, private clinics supplement the public offering in each city. Because of the dominance of publicly provided care, the structure and governance of the larger public system influence the functioning of the ambulatory care system. Structure includes not only the way ambulatory care services themselves are organized but also the degree of integration between ambulatory care and other services that support and complement ambulatory care—public health services, specialty/diagnostic services, and inpatient care. Governance concerns such issues as the

degree of independence that the public system as a whole has from other municipal 2 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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area definition, the stringency of the eligibility standards, and the strictness with strictness the and standards, eligibility the of stringency the definition, area

drawn to support the providers, generally a county or hospital district. The service The district. hospital or county a generally providers, the support to drawn

define the service area for locally financed providers by the area from which funds are funds which from area the by providers financed locally for area service the define

financed services not covered under federal programs. Local jurisdictions may also may jurisdictions Local programs. federal under covered not services financed

the community may choose to establish specific eligibility standards for locally for standards eligibility specific establish to choose may community the

Medicaid eligibility are critical to the size of the uninsured population. In addition, In population. uninsured the of size the to critical are eligibility Medicaid

and state rules govern eligibility for Medicaid services, and state decisions about decisions state and services, Medicaid for eligibility govern rules state and

emergency hospital services and services at federally funded clinics. A mix of federal of mix A clinics. funded federally at services and services hospital emergency

ity may be governed by a different set of rules. Federal rules govern eligibility for eligibility govern rules Federal rules. of set different a by governed be may ity

licly funded services at that facility. Depending on its sources of funding, each facil- each funding, of sources its on Depending facility. that at services funded licly

depends in large part on the size of its service area and the eligibility rules for pub- for rules eligibility the and area service its of size the on part large in depends

The demand for safety net ambulatory care services that each provider faces provider each that services care ambulatory net safety for demand The

and may be fearful about using the services that are available for them. them. for available are that services the using about fearful be may and

a particular problem for the system since they are rarely eligible for public programs public for eligible rarely are they since system the for problem particular a

in the size of the uninsured population. Finally, undocumented immigrants present immigrants undocumented Finally, population. uninsured the of size the in

Medicaid eligibility standards and private insurance markets are an important factor important an are markets insurance private and standards eligibility Medicaid

poverty and uninsurance in the low-income population. State-level decisions on decisions State-level population. low-income the in uninsurance and poverty

the mainstream health care system, which is in turn a function of the extent of extent the of function a turn in is which system, care health mainstream the

the safety net is determined primarily by the size of the population left unserved by unserved left population the of size the by primarily determined is net safety the

challenges to adequate safety net care—high levels of demand. Demand for care from care for Demand demand. of levels care—high net safety adequate to challenges

These systems and their effectiveness are also affected by one of the foremost the of one by affected also are effectiveness their and systems These

are set. set. are

through their influence on the political process by which public policies and budgets and policies public which by process political the on influence their through

toward the public system—through direct competition for insured patients as well as well as patients insured for competition direct system—through public the toward

Private hospitals influence the ambulatory care safety net by the stance they take they stance the by net safety care ambulatory the influence hospitals Private

also by the willingness of private hospitals to cooperate in caring for their patients. their for caring in cooperate to hospitals private of willingness the by also

they are affected not only by the strengths and weaknesses in the public system but system public the in weaknesses and strengths the by only not affected are they

ics, most private safety net clinics lack an official affiliation with a hospital; therefore, hospital; a with affiliation official an lack clinics net safety private most ics,

component of the ambulatory care safety net in each community. Unlike public clin- public Unlike community. each in net safety care ambulatory the of component

Private clinics, many financed through federal grants, also represent an important an represent also grants, federal through financed many clinics, Private

ity structure and a more integrated program of patient care. care. patient of program integrated more a and structure ity

where in between, moving decisively but slowly toward a more decentralized author- decentralized more a toward slowly but decisively moving between, in where

Angeles, with its huge client population and multiple hospital system, falls some- falls system, hospital multiple and population client huge its with Angeles,

latory care providers are included as members of an integrated patient care team. Los team. care patient integrated an of members as included are providers care latory

care officials have a seat at the decision-making and budget-setting table, and ambu- and table, budget-setting and decision-making the at seat a have officials care

ambulatory care is controlled at the hospital level. In contrast, Denver ambulatory Denver contrast, In level. hospital the at controlled is care ambulatory

public systems. Houston’s governance structure is more centralized and financing for financing and centralized more is structure governance Houston’s systems. public

but also in the level of integration of services and the eligibility requirements of their of requirements eligibility the and services of integration of level the in also but

The three systems in this study differ not only in their governance and financing and governance their in only not differ study this in systems three The

to the ambulatory care sector within the system—are important. important. system—are the within sector care ambulatory the to

budget. Both the level and the stability of the two funding flows—to the system and system the flows—to funding two the of stability the and level the Both budget.

tem as well as the allocation of funds to ambulatory care within the public system’s public the within care ambulatory to funds of allocation the as well as tem

Financing for public ambulatory care depends on the financial state of the public sys- public the of state financial the on depends care ambulatory public for Financing

ambulatory care system within the health system, both politically and financially. and politically both system, health the within system care ambulatory services in general and, more specifically, the strength and independence of the of independence and strength the specifically, more and, general in services which these criteria are enforced will influence the quantity of free or reduced-price services that locally financed facilities are obligated to provide. This section describes the ambulatory care safety nets in Houston, Denver, and Los Angeles, taking into account the demand for safety net services, the structure and governance of the public system, the role of the private sector, and the financing that supports the system. The constraints under which each system operates and the challenges each faces are then discussed.

Houston

Background

In Texas, responsibility for health care for the indigent by law rests with the county (Wiener et al. 1997). Harris County, with a population of just over 3 million, provides care through the facilities of the Harris County Hospital District (HCHD), a public entity financed through a property tax. The city of Houston dominates Har- ris County, but there are other smaller cities as well as unincorporated areas in the county.2

Demand

An estimated 30.1 percent of Houston metropolitan area residents are uninsured (Employee Benefits Research Institute [EBRI] 1998). Factors contributing to the high uninsurance rate in Texas as a whole also operate in Houston—stringent eligibility criteria for Medicaid, a large proportion of Hispanics (many of whom are undocumented), and a relatively low level of employer-sponsored insurance.3 Con- sequently, demand for safety net services is high.

Facilities Serving the Indigent Population

Harris County’s ambulatory care safety net includes HCHD’s three hospitals and the 11 community health clinics operated by its Community Health Program, as well as health departments run separately by the county and the city, and several private clinics. HCHD’s community clinics, located throughout the county, provide a full range of acute care services and represent the major source of ambulatory care for Hous- ton’s indigent population. In addition, HCHD operates eight school-based clinics for screening, immunizations, and referrals. Ambulatory care, including specialty and diagnostic services, is also available at the outpatient and emergency departments of HCHD’s hospitals. Historically, preventive services have been provided for residents of Houston proper by the nine city health department clinics, while five county health department clinics serve county residents living outside of the city borders. The city health department also operates four school-based health centers. In addition to these public facilities, several private clinics serve individuals who either are not eligible for or choose not to use public facilities. Fees are generally based on clients’ income. Although the quantity of services these clinics provide is

small relative to those provided by HCHD’s Community Health Program, these 4 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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ments accounted for 18.6 percent of total revenues (HCHD data cited in Meyer in cited data (HCHD revenues total of percent 18.6 for accounted ments

from patient revenues, of which 52.8 percent were derived from Medicaid. DSH pay- DSH Medicaid. from derived were percent 52.8 which of revenues, patient from

A similar percentage came percentage similar A erty tax accounted for 37.6 percent of HCHD’s budget. HCHD’s of percent 37.6 for accounted tax erty

graduate medical education payments. In 1998, local funds derived from the prop- the from derived funds local 1998, In payments. education medical graduate

enues, Medicaid disproportionate share hospital (DSH) payments, and Medicare and payments, (DSH) hospital share disproportionate Medicaid enues,

HCHD is funded by a mix of local and federal funds, including property tax rev- tax property including funds, federal and local of mix a by funded is HCHD

culminating in the replacement of HCHD’s chief executive officer in 1999. 1999. in officer executive chief HCHD’s of replacement the in culminating

Over the last few years, relations between HCHD and the court have been strained, been have court the and HCHD between relations years, few last the Over

pital District and so holds approval authority over its purchases on a day-to-day basis. day-to-day a on purchases its over authority approval holds so and District pital

approves its budget. Furthermore, the court retains purchasing powers for the Hos- the for powers purchasing retains court the Furthermore, budget. its approves

HCHD’s Board of Managers, sets the property tax rate that funds HCHD, and HCHD, funds that rate tax property the sets Managers, of Board HCHD’s

Harris County is governed by the County Commissioners Court. The court appoints court The Court. Commissioners County the by governed is County Harris

Financing and Governance Governance and Financing

as treatment for HIV/AIDS, may be subject to federal eligibility restrictions. restrictions. eligibility federal to subject be may HIV/AIDS, for treatment as

residents of the appropriate jurisdiction. Services funded under federal grants, such grants, federal under funded Services jurisdiction. appropriate the of residents

financed services, such as immunization and tuberculosis screening, are open to all to open are screening, tuberculosis and immunization as such services, financed

immigration status, and income criteria for eligibility vary by program. Locally program. by vary eligibility for criteria income and status, immigration

Public health services at county and city facilities are available without regard to regard without available are facilities city and county at services health Public

departments for their medical needs. needs. medical their for departments

not afford the fees associated with the Red Card often rely on hospital emergency hospital on rely often Card Red the with associated fees the afford not

effectively eliminating Gold Card eligibility for the undocumented. Those who can- who Those undocumented. the for eligibility Card Gold eliminating effectively

Card, in recent years documentation standards have been more strictly enforced, strictly more been have standards documentation years recent in Card,

Although in the past undocumented immigrants could obtain a Gold a obtain could immigrants undocumented past the in Although ity to pay. to ity

for those with emergency conditions, regardless of residence, income status, or abil- or status, income residence, of regardless conditions, emergency with those for

provide a diagnosis for all who present at the emergency department and treatment and department emergency the at present who all for diagnosis a provide

Red Card rates. Hospitals, in contrast, are obligated under federal requirements to requirements federal under obligated are contrast, in Hospitals, rates. Card Red

The clinics screen everyone for Gold Card eligibility; those not eligible must pay must eligible not those eligibility; Card Gold for everyone screen clinics The

tion of clinic users. users. clinic of tion

while the other half had Gold Cards. Red Card patrons represented only a small frac- small a only represented patrons Card Red Cards. Gold had half other the while

eligible for HCHD services in 1998, approximately half were covered by Medicaid by covered were half approximately 1998, in services HCHD for eligible

two cover only a small proportion of HCHD clinic patients. Of the 900,000 people 900,000 the Of patients. clinic HCHD of proportion small a only cover two

facilities also accept Medicaid, Medicare, and private insurance, although these last these although insurance, private and Medicare, Medicaid, accept also facilities

register for a “Red Card,” which entitles them to services at full charges. HCHD charges. full at services to them entitles which Card,” “Red a for register

income level or immigration status) or who choose not to apply for a Gold Card can Card Gold a for apply to not choose who or status) immigration or level income

Those who do not qualify (because of (because qualify not do who Those hospitals and is renewable every six months. six every renewable is and hospitals

apply for a “Gold Card,” which entitles them to free services at HCHD clinics and clinics HCHD at services free to them entitles which Card,” “Gold a for apply

Uninsured legal residents of Harris County who meet specified income criteria can criteria income specified meet who County Harris of residents legal Uninsured

Eligibility for Public Services Services Public for Eligibility

departments in private hospitals also offer some indigent specialty care. care. specialty indigent some offer also hospitals private in departments

who reportedly avoid any contact with government agencies at any level. Outpatient level. any at agencies government with contact any avoid reportedly who

ability of public services. The private clinics serve many undocumented immigrants undocumented many serve clinics private The services. public of ability clinics are an important supplement to HCHD, filling perceived gaps in the avail- the in gaps perceived filling HCHD, to supplement important an are clinics 1999).7 HCHD officials reported that ambulatory care accounts for about 35 percent of the total HCHD budget. The Community Health Program represents about one-third of this portion; the rest goes to hospital-based outpatient clinics and the emergency department. The county and city health departments each receive funding from their respec- tive jurisdictions based on submitted budgets. More than half of the budget for each, however, comes from competitive federal grants for particular services, such as HIV/AIDS programs or maternal and child health services. Medicaid payments represent only a minor part of health department budgets. Houston’s privately operated clinics are supported primarily through donations and volunteer staff, in addition to patient fees. A few also accept Medicaid payments, but these funds represent only a minor contribution to revenues. In contrast to clinics in the other cities in this study, not one of the private clinics in Harris County is a federally qualified health center (FQHC).8

Constraints and Challenges

Current challenges to Houston’s ambulatory care safety net come from three areas. First, there is a high and growing level of demand for safety net services in Houston, due in part to stringent state Medicaid eligibility standards and in part to the large undocumented immigrant population. Second, core funding for the system is unsta- ble. Tax rates are currently below historical levels.9 DSH payment levels are set to decline, and because the allocation of DSH funds to a given hospital is based on the number of Medicaid patients served by that hospital, an indirect effect of the shift in Medicaid patients to managed care has been increased competition from private hospitals for this dwindling pool of patients. The third area of challenge is the direct effect of Medicaid managed care on HCHD patient revenues. Mandatory managed care was introduced in late 1997 and, by the following year, HCHD Medicaid revenues were 31 percent below their 1994 level (calculations based on HCHD data cited in Meyer 1999). Although HCHD sponsored its own Medicaid managed care plan, it entered the market relatively late and enrollment has not met expectations. Many private providers have actively courted Medicaid enrollees. In addition to these current challenges, Houston’s ambulatory care safety net faces structural impediments to improved efficiency and client access. Chief among these is the county’s ambivalent commitment to its decision to finance indigent health care services. In choosing to meet its statutory obligation to care for the indigent through the establishment of a hospital district, Harris County has signaled its intention to directly provide services for the indigent rather than purchase care from private providers. The state’s decision to provide only minimal protection for safety net providers under Medicaid managed care has, in effect, placed the burden of financing indigent care squarely with the county. However, in recent years, the county has been reluctant for various reasons to make adequate local financing available to support the hospital system as currently configured. The 1996 cuts in property tax rates mandated by the Commissioners Court have had a direct effect on revenue, exacerbating the loss of Medicaid revenues that have historically cross-

subsidized indigent care.10 6 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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turning their attention to greater emphasis on community-based care. care. community-based on emphasis greater to attention their turning

finances. Some success having been achieved in that area, the commissioners are now are commissioners the area, that in achieved been having success Some finances.

officials reported that over the past two years their emphasis has been on stabilizing on been has emphasis their years two past the over that reported officials

HCHD has been deteriorating over the past five years (Meyer 1999), and county and 1999), (Meyer years five past the over deteriorating been has HCHD

patients rather than treat them in the community. The overall financial condition of condition financial overall The community. the in them treat than rather patients

based on the number of hospital discharges and so present an incentive to admit to incentive an present so and discharges hospital of number the on based

DSH in the state, but these payments, like those for graduate medical education, are education, medical graduate for those like payments, these but state, the in DSH

ambulatory care because of its funding. HCHD is the largest recipient of Medicaid of recipient largest the is HCHD funding. its of because care ambulatory

Whatever its priorities, HCHD is constrained in its ability to shift resources to resources shift to ability its in constrained is HCHD priorities, its Whatever

medical school curricula. school medical

HCHD’s tendency to subordinate the needs of the clinics to the requirements of requirements the to clinics the of needs the subordinate to tendency HCHD’s

system. The clinics’ reliance on medical school physicians and residents enhances residents and physicians school medical on reliance clinics’ The system.

tal physicians, further hindering the integration of ambulatory care into the larger the into care ambulatory of integration the hindering further physicians, tal

clinics come from two different medical schools and operate separately from hospi- from separately operate and schools medical different two from come clinics

HCHD departments and functions, despite the stated priorities. Physicians at the at Physicians priorities. stated the despite functions, and departments HCHD

agement, in effect making non-hospital-based ambulatory care subsidiary to other to subsidiary care ambulatory non-hospital-based making effect in agement,

tion process nor are program officials included at the upper levels of system man- system of levels upper the at included officials program are nor process tion

The Community Health Program is not directly involved in the final budget alloca- budget final the in involved directly not is Program Health Community The

ambulatory care is currently not well reflected in the governance of the organization. the of governance the in reflected well not currently is care ambulatory

munity preferences and cost efficiency. Nevertheless, this commitment to promoting to commitment this Nevertheless, efficiency. cost and preferences munity

the provision of care in ambulatory settings wherever possible for reasons of com- of reasons for possible wherever settings ambulatory in care of provision the

care. HCHD officials and county commissioners alike have stated policies favoring policies stated have alike commissioners county and officials HCHD care.

its public hospital system, HCHD made an early commitment to community-based to commitment early an made HCHD system, hospital public its

one of the first systems in the country to incorporate community health centers into centers health community incorporate to country the in systems first the of one

The Community Health Program has been operating since the early 1970s. As 1970s. early the since operating been has Program Health Community The

Community Health Program and the hospitals used a common information system. system. information common a used hospitals the and Program Health Community

tal care at the community clinics could be more easily arranged and tracked if the if tracked and arranged easily more be could clinics community the at care tal

care at hospital outpatient clinics or, conversely, referrals from the hospitals for neona- for hospitals the from referrals conversely, or, clinics outpatient hospital at care

coordination of care across services. Referrals from community clinics for specialty for clinics community from Referrals services. across care of coordination

reliably between ambulatory care providers and other system services impedes the impedes services system other and providers care ambulatory between reliably

system is a major weakness. The inability to transfer patient information quickly and quickly information patient transfer to inability The weakness. major a is system

HCHD ambulatory care officials recognize that the lack of a good information good a of lack the that recognize officials care ambulatory HCHD

vices at the others. others. the at vices

since, for example, patients referred from one system might not be eligible for ser- for eligible be not might system one from referred patients example, for since,

Differences in eligibility requirements for each set of providers hampers collaboration hampers providers of set each for requirements eligibility in Differences

mandates, and perceived cultural differences among the entities hinder cooperation. hinder entities the among differences cultural perceived and mandates,

tle systemwide collaboration. Competition for federal funding, different legislative different funding, federal for Competition collaboration. systemwide tle

rate in some areas, each entity operates largely in isolation from the others, with lit- with others, the from isolation in largely operates entity each areas, some in rate

in others. While HCHD clinics and the city and county health departments collabo- departments health county and city the and clinics HCHD While others. in

entities has created a safety net with gaps in some geographic areas and duplications and areas geographic some in gaps with net safety a created has entities

cle to access and efficiency. Lack of coordination among various ambulatory care ambulatory various among coordination of Lack efficiency. and access to cle The current structure of ambulatory care in the county also constitutes an obsta- an constitutes also county the in care ambulatory of structure current The Denver

Background

The Denver metropolitan area includes the city and county of Denver and the five surrounding counties. While the entire metropolitan area has been growing rapidly in recent years, growth in the suburban areas has been greater than in the city. The population in the city and county of Denver grew by 8.3 percent between 1990 and 1999, while population growth in the suburban counties ranged from 19.2 to 155.5 percent. These geographic differences are important, since responsibility for indigent health care follows strict geographic lines.11

Demand

Compared with Houston and Los Angeles, the city and county of Denver are small, with a total population of about half a million; the metropolitan area population is 2.2 million (Colorado Community Health Network [CCHN] 1998). An estimated 17.8 percent of the metropolitan area population is uninsured (EBRI 1998). Respondents believed that the greatest growth in the number of uninsured has been in the suburban counties where the fastest population growth is occurring. As in Houston, demand for indigent health care services is driven by stringent Medicaid eligibility standards and by the large number of undocumented immigrants. In contrast to Houston, however, Denver enjoys a high rate of private insurance coverage.

Facilities Serving the Indigent Population

Within the city and county of Denver, the health care safety net—both ambulatory and hospital based—is dominated by Denver Health, an integrated, public health delivery system. Denver Health consists of a hospital, 11 community clinics, and 12 school-based clinics run under its Community Health Services program, the public health department, and other health-related services.12 Additionally, several private nonprofit clinics have opened in response to what they perceived as needs not met or populations not served by Denver Health. In the suburban counties, three nonprofit clinic networks operating at 11 sites provide the majority of ambulatory care services for the indigent. As are the Denver Health community clinics, all of these suburban clinics are federally qualified health centers. Public health services in the suburbs are the responsibility of the individual counties, and the services offered by and level of commitment to indigent ambulatory care varies. Private hospitals also offer some ambulatory care through their emergency and outpatient departments.

Eligibility for Public Services

For reasons that are based both in history and in the source of financing, inpatient care for the indigent in the suburban counties is primarily the responsibility of Uni-

versity Hospital—the state designated provider of last resort. In Denver proper, the 8 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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recent years have covered roughly half of Denver Health’s uncompensated care. In care. uncompensated Health’s Denver of half roughly covered have years recent

of Denver provide significant local funding for Denver Health’s charity care and in and care charity Health’s Denver for funding local significant provide Denver of

funds for both community and hospital-based ambulatory care. The city and county and city The care. ambulatory hospital-based and community both for funds

funds via CICP and direct patient care reimbursement, are an important source of source important an are reimbursement, care patient direct and CICP via funds

sonable costs for Medicaid beneficiaries. State/federal Medicaid funds, both DSH both funds, Medicaid State/federal beneficiaries. Medicaid for costs sonable

In addition, the state of Colorado continues to pay FQHCs 100 percent of their rea- their of percent 100 FQHCs pay to continues Colorado of state the addition, In

ing to support FQHCs and various grant funding for specific public health activities. health public specific for funding grant various and FQHCs support to ing

The federal government provides Bureau of Primary Health Care (BPHC) fund- (BPHC) Care Health Primary of Bureau provides government federal The

posed Colorado State Children’s Health Insurance Program (SCHIP). (SCHIP). Program Insurance Health Children’s State Colorado posed

rently provided under both CICP and CHP+ will be consolidated under the pro- the under consolidated be will CHP+ and CICP both under provided rently

Health Plan Plus (CHP+). Children’s inpatient and ambulatory care services cur- services care ambulatory and inpatient Children’s (CHP+). Plus Plan Health

of the cost of care. Funding for indigent children has also been provided under Child under provided been also has children indigent for Funding care. of cost the of

annual basis, however, and in recent years has covered an average of only 30 percent 30 only of average an covered has years recent in and however, basis, annual

DSH funds pay for inpatient services. The CICP program budget is fixed on an on fixed is budget program CICP The services. inpatient for pay funds DSH

qualify for Medicaid. State funds finance CICP ambulatory services, while Medicaid while services, ambulatory CICP finance funds State Medicaid. for qualify

both ambulatory and inpatient services for indigent adults and children who do not do who children and adults indigent for services inpatient and ambulatory both

The largest source is the Colorado Indigent Care Program (CICP), which covers which (CICP), Program Care Indigent Colorado the is source largest The

Financing for safety net ambulatory care in Denver comes from several sources. several from comes Denver in care ambulatory net safety for Financing

get and policy decisions that affect its operations. its affect that decisions policy and get

given equal status with other medical services and so it participates fully in the bud- the in fully participates it so and services medical other with status equal given

their client population. Within the Denver Health system, ambulatory care has been has care ambulatory system, Health Denver the Within population. client their

and direct them to those areas that can contribute most efficiently to the health of health the to efficiently most contribute can that areas those to them direct and

Health the flexibility and the authority to pool monies from various funding sources funding various from monies pool to authority the and flexibility the Health

that integrates hospital, ambulatory, and public health services affords Denver affords services health public and ambulatory, hospital, integrates that

budget without outside approval. This freedom combined with a program structure program a with combined freedom This approval. outside without budget

county as a quasi-public hospital authority since 1994 and so can develop its own its develop can so and 1994 since authority hospital quasi-public a as county

In contrast to HCHD, Denver Health has operated independently of the city and city the of independently operated has Health Denver HCHD, to contrast In

Financing and Governance Governance and Financing

dence. Almost all of these independent clinics are federally qualified. qualified. federally are clinics independent these of all Almost dence.

Denver Health clinics, these clinics accept patients without regard to area of resi- of area to regard without patients accept clinics these clinics, Health Denver

clinics also provide services on a sliding fee scale but, in contrast to the CCHN and CCHN the to contrast in but, scale fee sliding a on services provide also clinics

and services to residents are provided on a sliding fee scale. Independent nonprofit Independent scale. fee sliding a on provided are residents to services and

mary Care Association. The service area for each clinic site is defined by zip codes zip by defined is site clinic each for area service The Association. Care mary

through the Colorado Community Health Network (CCHN) of the Colorado Pri- Colorado the of (CCHN) Network Health Community Colorado the through

The metropolitan area community clinic networks work closely with each other each with closely work networks clinic community area metropolitan The

Denver Health. Health. Denver

specialty services to residents of the city and county of Denver under agreement with agreement under Denver of county and city the of residents to services specialty

some immigrants uncomfortable. In addition, University Hospital provides specified provides Hospital University addition, In uncomfortable. immigrants some

must ask in order to ascertain eligibility for various reimbursement programs make programs reimbursement various for eligibility ascertain to order in ask must

Denver Health has an open-door policy toward the undocumented, the questions it questions the undocumented, the toward policy open-door an has Health Denver

sliding fee scale; most public health services are provided free of charge. Although charge. of free provided are services health public most scale; fee sliding

dents of the city and county of Denver. Personal health services are provided on a on provided are services health Personal Denver. of county and city the of dents responsibility rests mainly with Denver Health, whose services are open to all resi- all to open are services whose Health, Denver with mainly rests responsibility contrast, local funding for indigent care in the surrounding counties varies widely, ranging from an important supplement to insignificant amounts. Denver Health’s ambulatory care system is the most financially secure among the local clinic systems in the study communities—in part because it belongs to a larger system that aggressively and effectively pursues all available financing. Denver Health’s overall financial security is strongly related to the substantial local financing it receives under its contracts with the city for indigent care, prison health services, and emergency services. In addition, it is the largest recipient of DSH monies in the state. Nearly one-fifth of its funding comes from grants, including the BPHC grants that support its community clinics. Because these clinics provide public health services, they are also eligible to apply for various public health grants. Denver Health thoroughly investigates program eligibility for all of its indigent patients, including Medicaid, Medicare, CICP, and CHP+, to tap into any available revenue. It has also joined with a consortium of safety net providers to establish a Medicaid managed care plan, Colorado Access, which is now the largest Medicaid managed care plan in the state and dominates the Denver metropolitan area market. The Community Health Services program derives approximately 40 percent of its revenues from Med- icaid, 30 percent from CICP, 19 percent from federal grants, and 11 percent from Medicare and other funds. The private nonprofit clinics rely primarily on federal grant funding, CICP revenues, foundation grants, and private donations to supplement patient fees. All of the clinics participate in Medicaid and receive state-mandated safety net supplements to their Medicaid managed care reimbursement. Medicaid revenues vary across the clinics, but generally represent 25 to 30 percent of total clinic revenues.

Constraints and Challenges

Since responsibility for indigent care is divided along geographic lines, many of the challenges to Denver’s ambulatory care safety net are specific to the different jurisdictions. Although Denver’s undocumented immigrant population is smaller than that of either Houston or Los Angeles, caring for undocumented immigrants is a problem throughout the area. The metropolitan area as a whole is seen as underserved for safety net ambulatory care (CCHN 1998), but respondents reported that growth in demand for safety net services is highest in the suburban counties where growth in the undocumented immigrant population is highest. The dependence of the suburban indigent population on the nonprofit clinic networks for primary care and on University Hospital for diagnostic and specialty care means that threats to the financial stability of these entities also threaten the ambulatory care safety net in the suburban counties. The suburban clinics successfully met the challenge of the introduction of managed care into Medicaid by joining Col- orado Access. Possible changes to Medicaid, however, might still endanger their financial stability. Specifically, some fear that cost-based reimbursement for safety net clinics will be eliminated. In addition, recent financial stresses on University Hospi- tal have resulted in a reduction in the number of appointments available to indigent patients for specialty and diagnostic work. The hospital is also in the process of trans-

ferring some of its departments to a new location outside the city—with unpre- 10 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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year extension was approved, but includes strict performance indicators and man- and indicators performance strict includes but approved, was extension year

additional federal funds. The first five-year waiver period ended in June 2000; a five- a 2000; June in ended period waiver five-year first The funds. federal additional

health care system under a Section 1115 Medicaid waiver that includes substantial includes that waiver Medicaid 1115 Section a under system care health

fornia Medical Center (LAC+USC). Los Angeles is currently restructuring its public its restructuring currently is Angeles Los (LAC+USC). Center Medical fornia

the cluster organized around the Los Angeles County/University of Southern Cali- Southern of County/University Angeles Los the around organized cluster the

study conducted a general systemwide assessment of ambulatory care, but focused on focused but care, ambulatory of assessment systemwide general a conducted study

Because of the county’s geographic breadth, this breadth, geographic county’s the of Because pital and at least one public clinic. public one least at and pital

(LACDHS). Service delivery is organized into five “clusters,” each with a public hos- public a with each “clusters,” five into organized is delivery Service (LACDHS).

gent health care rests with the Los Angeles County Department of Health Services Health of Department County Angeles Los the with rests care health gent

county in the country, larger even than 42 of the 50 states. Responsibility for indi- for Responsibility states. 50 the of 42 than even larger country, the in county

With 9 million residents, Los Angeles County has the largest population of any of population largest the has County Angeles Los residents, million 9 With

Background Background

Los Angeles Los

Health’s DSH allotment. allotment. DSH Health’s

financing. The surplus has already led other hospitals to question the size of Denver of size the question to hospitals other led already has surplus The financing.

existence of such a surplus could cause local officials to reconsider the level of local of level the reconsider to officials local cause could surplus a such of existence

tion has allowed it to build a nontrivial budgetary surplus. Some officials fear that the that fear officials Some surplus. budgetary nontrivial a build to it allowed has tion

source of one its most significant current challenges. Its strong current financial posi- financial current strong Its challenges. current significant most its one of source

that of Denver Health. Denver Health’s success in recent years is, paradoxically, the paradoxically, is, years recent in success Health’s Denver Health. Denver of that

Beyond these issues, the fate of Denver’s ambulatory care safety net is linked to linked is net safety care ambulatory Denver’s of fate the issues, these Beyond

ipation.

pointingly low at the time of our visit, steps are now being taken to increase partic- increase to taken being now are steps visit, our of time the at low pointingly

so could become more vulnerable to cutbacks. While SCHIP enrollment was disap- was enrollment SCHIP While cutbacks. to vulnerable more become could so

dents feared that the remaining adults-only CICP might have less political appeal and appeal political less have might CICP adults-only remaining the that feared dents

tions, since these funds are based on CICP patient volume. Furthermore, respon- Furthermore, volume. patient CICP on based are funds these since tions,

ing. The movement of children from CICP to SCHIP could also affect DSH alloca- DSH affect also could SCHIP to CICP from children of movement The ing.

reimbursement clinics receive for their care will decline from a small amount to noth- to amount small a from decline will care their for receive clinics reimbursement

SCHIP are no longer eligible for CICP, and if they are not enrolled in SCHIP, the SCHIP, in enrolled not are they if and CICP, for eligible longer no are SCHIP

ambulatory care providers in both the suburbs and the city. Children eligible for eligible Children city. the and suburbs the both in providers care ambulatory

Ironically, the coming of SCHIP could result in lower revenues for safety net safety for revenues lower in result could SCHIP of coming the Ironically,

find ways around Denver Health’s residency requirements. requirements. residency Health’s Denver around ways find

problems in the suburban ambulatory care safety net, patients from outside the city the outside from patients net, safety care ambulatory suburban the in problems

graphic boundaries. Capacity and cost could become serious issues if, in response to response in if, issues serious become could cost and Capacity boundaries. graphic

maintain the quality of its system in part because demand is circumscribed by geo- by circumscribed is demand because part in system its of quality the maintain

a possible harbinger of problems to come. More broadly, Denver Health is able to able is Health Denver broadly, More come. to problems of harbinger possible a

with the restrictions on indigent specialty care appointments at University Hospital University at appointments care specialty indigent on restrictions the with

The weaknesses in the suburban safety net system could affect Denver Health, Denver affect could system net safety suburban the in weaknesses The

have not been able to fully address. fully to able been not have

dwindling access to specialty care in the suburbs is an issue that suburban providers suburban that issue an is suburbs the in care specialty to access dwindling

care, some of the suburban hospitals have started to fill in the gaps. Nevertheless, the Nevertheless, gaps. the in fill to started have hospitals suburban the of some care,

Respondents noted that as University Hospital has cut appointments for specialty for appointments cut has Hospital University as that noted Respondents

much of a problem in the city, it is a growing problem in the suburban counties. suburban the in problem growing a is it city, the in problem a of much dictable effects on indigent care. While access to specialty care does not seem to be to seem not does care specialty to access While care. indigent on effects dictable dates a phase-out of the federal role. Increased emphasis on expanding access through ambulatory care is a major component of the waiver program.

Demand

With an estimated 26.2 percent of its residents uninsured (EBRI 1998), Los Ange- les has a high demand for safety net services. While its eligibility standards for Med- icaid are generous compared with those in Houston and Denver, the county has large Hispanic and Asian populations that have high rates of uninsurance among the nonelderly—46 and 35 percent, respectively (L.A. Health 1998). Nearly 44 percent of the county’s residents are Hispanic; about 12 percent are Asian. Los Angeles, like the rest of California, is also home to many undocumented immigrants. Under the previous governor, there was a distinct anti-immigrant sentiment that increased this population’s reluctance to take advantage of any government services. While the current administration is more immigrant friendly, respondents reported that distrust of public programs among immigrants remains.

Facilities Serving the Indigent Population

In addition to the largest hospital in the county, the LAC+USC cluster includes three comprehensive health centers (CHCs) and one health center (HC). CHCs provide a wide range of primary care services and each, according to county officials, is roughly equivalent to the outpatient department of a 350-bed hospital. The health centers offer services that are more limited and have a greater focus on public health. The hospital, CHCs, and HCs within the cluster have standardized policies, common patient identifiers, and a system for referral among the different sites. Ambulatory care is also available at the hospital’s emergency department and specialty clinics. Formerly, the hospital emergency department was the only place indigents could get specialty care. Under the waiver, however, some specialty services have been moved to the CHCs and a referral process has been put in place to allow patients access to hospital specialty services via the CHCs. While these arrangements do not as yet always work smoothly, they represent a significant departure from past procedures and a clear shift away from a hospital-centric philosophy of indigent care provision. As in Houston and Denver, private nonprofit clinics in Los Angeles serve patients who may not be comfortable in the public system. Many of these clinics have chosen to affiliate formally with LACDHS through the Public Private Partnership (PPP) program established under the waiver.14 The formal inclusion of private providers in the county’s indigent care network represents a major innovation in the county’s program, making the county both a provider and a purchaser of indigent care. At the time of our visit, there were 28 PPP clinics in the LAC+USC cluster. The PPPs generally refer patients in need of inpatient or specialty services to the public hospital or the CHCs through the Referral Center, a fax-based referral system established at cluster hospitals. PPP respondents reported, however, that access to these services through the Referral Center for PPP clients is less secure than for public clinic clients since the PPPs are not currently linked electronically to the public system nor do they have the personal connections that county personnel often employ to facilitate refer-

rals. The PPPs hope to see these linkages improved under the waiver project. 12 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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vice at ambulatory care sites. These funds currently finance approximately half of half approximately finance currently funds These sites. care ambulatory at vice

waiver’s Indigent Care Match, uncompensated care is defined as a reimbursable ser- reimbursable a as defined is care uncompensated Match, Care Indigent waiver’s

the support of nonhospital care, including care at nonpublic facilities. Under the Under facilities. nonpublic at care including care, nonhospital of support the

ambulatory care. Funds in the waiver’s Supplemental Project Pool are designated for designated are Pool Project Supplemental waiver’s the in Funds care. ambulatory

billion over five years and may exercise greater flexibility in the use of these funds for funds these of use the in flexibility greater exercise may and years five over billion

ambulatory care. Under the original waiver, LACDHS received approximately $1 approximately received LACDHS waiver, original the Under care. ambulatory

LACDHS system in 1995 and is a significant new source of funding, particularly for particularly funding, of source new significant a is and 1995 in system LACDHS

The Section 1115 waiver was born out of the near financial collapse of the of collapse financial near the of out born was waiver 1115 Section The

cent of LACDHS’s total budget. total LACDHS’s of cent

centage comes from patient fees. The CHC/HC budget represents roughly 6 per- 6 roughly represents budget CHC/HC The fees. patient from comes centage

local property taxes. Medicaid represents 30 percent of CHC revenues; a similar per- similar a revenues; CHC of percent 30 represents Medicaid taxes. property local

combination of “realignment funds” (from sales taxes and vehicle license fees) and fees) license vehicle and taxes sales (from funds” “realignment of combination

budget in 1999, $842 million came from county-administered funds derived from a from derived funds county-administered from came million $842 1999, in budget

Of LACDHS’s nearly $2.6 billion $2.6 nearly LACDHS’s Of authority for certain tax streams to the counties. the to streams tax certain for authority

known as “realignment,” the state transferred responsibility for indigent care and care indigent for responsibility transferred state the “realignment,” as known

LACDHS’s services are funded through a variety of sources. In a 1991 initiative 1991 a In sources. of variety a through funded are services LACDHS’s

unrealistic but politically necessary. necessary. politically but unrealistic

services. Goals for ambulatory care visits established under the waiver were seen as seen were waiver the under established visits care ambulatory for Goals services.

tion, the need to negotiate with unions has slowed efforts to restructure inpatient restructure to efforts slowed has unions with negotiate to need the tion,

pered the system’s ability to respond to opportunities, such as managed care. In addi- In care. managed as such opportunities, to respond to ability system’s the pered

and procurement regulations. Respondents noted that these restrictions have ham- have restrictions these that noted Respondents regulations. procurement and

oversight by the county Board of Supervisors and must adhere to government labor government to adhere must and Supervisors of Board county the by oversight

Like HCHD, LACDHS is an entity of local government and is therefore subject to subject therefore is and government local of entity an is LACDHS HCHD, Like

Financing and Governance Governance and Financing

their family’s size and income. income. and size family’s their

any other public program may qualify for free care under the PPP program based on based program PPP the under care free for qualify may program public other any

usually have a sliding fee scale in effect. Uninsured patients who do not qualify for qualify not do who patients Uninsured effect. in scale fee sliding a have usually

Private clinics generally accept all patients without regard to ability to pay and pay to ability to regard without patients all accept generally clinics Private

services anywhere within the system. system. the within anywhere services

assigned to a specific CHC or cluster based on geographic criteria, but may obtain may but criteria, geographic on based cluster or CHC specific a to assigned

renewed every six months. Unlike patients in Houston and Denver, patients are not are patients Denver, and Houston in patients Unlike months. six every renewed

questions are asked about applicants’ immigration status. ATP eligibility must be must eligibility ATP status. immigration applicants’ about asked are questions

basis of income, family size, and other factors. All information is self-declared and no and self-declared is information All factors. other and size, family income, of basis

plete an Ability To Pay (ATP) form and qualify for free or subsidized services on the on services subsidized or free for qualify and form (ATP) Pay To Ability an plete

ity for all programs, including Medicaid. Patients not eligible for Medicaid can com- can Medicaid for eligible not Patients Medicaid. including programs, all for ity

LACDHS services are available to all. Those unable to pay are screened for eligibil- for screened are pay to unable Those all. to available are services LACDHS

Eligibility for Public Services Services Public for Eligibility

integrate public and personal health services and public and private clinics. private and public and services health personal and public integrate

with PPPs in an attempt to decrease duplication of services and costs and to better to and costs and services of duplication decrease to attempt an in PPPs with

health centers. Under the waiver, many of the health centers have been colocated been have centers health the of many waiver, the Under centers. health Public health services are the responsibility of LACDHS and are available at the at available are and LACDHS of responsibility the are services health Public CHC uncompensated care. The LAC+USC cluster receives almost half of the funds available to the county through these two waiver programs. Budgeting takes place at the county level, with cluster allocations based on past patient volume. The clusters have considerable independence in their operations. The relative position of the ambulatory sector varies by cluster from “reasonably well integrated with” to “decidedly subsidiary to” the cluster’s hospital. In the LAC+USC cluster, ambulatory care has yet to achieve a strong degree of integration. In addition to their PPP funding, LACDHS’s private partners receive federal grant funds, private donations, and patient fees. Under PPP, clinics are paid a set fee per visit and a monthly case management fee. Most, but not all, also participate in Medicaid. PPP reimbursement rates are set below the Medicaid rate, and clinic officials asserted that the reimbursement does not cover the costs of patient care.

Constraints and Challenges

The LACDHS system faces enormous challenges over the next decade, many of which are recognized and addressed in the waiver program and extension (Long et al. 1999). Briefly, the system relies too heavily on its hospitals for indigent care, and its ambulatory care network is not uniformly integrated into the system. State funding is low, county funding is subject to cutbacks in lean financial times, and federal funding is declining. In addition, Medicaid managed care and falling enrollment have led to a decrease in the proportion of Medicaid patients using hospital and clinic- based services in the system and a reduction in Medicaid revenues. Under the waiver program, LACDHS has made a strong commitment to ambulatory care—both through its own clinics and through financing the care provided by its private partners. Nonetheless, numerous barriers exist to achieving the waiver goals. The sheer size of the county makes dramatic change difficult to implement. The clusters have a history of independence and, despite a basic similarity in structure, they have differences in policies and procedures in numerous small and not-so- small areas (e.g., information systems and physician employment practices) that make coordination difficult. In addition, the hospitals around which the clusters are organized may be reluctant to share authority and patients with their affiliated clinics. More than five years into the waiver, the clusters are moving on different paths at different speeds toward the centrally articulated goals regarding ambulatory care. The high demand for services and the inefficiencies inherent in hospital-centric care make the LACDHS system expensive to operate. LACDHS already represents 20 percent of the county budget. Funding streams have been tightened over the past decade, and cost-cutting programs have yet to achieve their full potential for savings. The state sets the rates for the “realignment” funding streams, and the county has limited ability to raise additional money on its own beyond property taxes. Federal DSH appropriations, a significant source of LACDHS’s funding, have been cut— although recent provisions that raise the maximum amount that public hospitals can claim have helped.18 Federal funds have been strictly limited in the second five-year

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trade referrals of their prenatal clients to specific hospitals in exchange for favorable for exchange in hospitals specific to clients prenatal their of referrals trade

dents in suburban Denver and Houston reported that they are able to, in effect, in to, able are they that reported Houston and Denver suburban in dents

ing since the reimbursement rate is seen as quite favorable. As a result, clinic respon- clinic result, a As favorable. quite as seen is rate reimbursement the since ing

reported that hospitals are eager to admit women under emergency Medicaid financ- Medicaid emergency under women admit to eager are hospitals that reported

service, is not reimbursable for such women. Respondents in all three study sites study three all in Respondents women. such for reimbursable not is service,

are reimbursable under emergency Medicaid provisions. Prenatal care, an ambulatory an care, Prenatal provisions. Medicaid emergency under reimbursable are

women who meet Medicaid eligibility standards other than legal immigration status immigration legal than other standards eligibility Medicaid meet who women

and hospital-based providers. Hospital deliveries for undocumented pregnant undocumented for deliveries Hospital providers. hospital-based and

ment is provided result in a redistribution of costs and revenues between ambulatory between revenues and costs of redistribution a in result provided is ment

provides a good example of how restrictions on funding based on where the treat- the where on based funding on restrictions how of example good a provides

from the ways in which safety net care is financed. The treatment of pregnant women pregnant of treatment The financed. is care net safety which in ways the from

lenges that arise from its reliance on complementary specialty and inpatient care and care inpatient and specialty complementary on reliance its from arise that lenges

Within each safety net system, the ambulatory care sector faces particular chal- particular faces sector care ambulatory the system, net safety each Within

populations. Their approaches are tailored to specific challenges their systems face. face. systems their challenges specific to tailored are approaches Their populations.

of making revenues match costs while continuing to meet the needs of their indigent their of needs the meet to continuing while costs match revenues making of

Denver, and Los Angeles have been using many of the same strategies—with the goal the strategies—with same the of many using been have Angeles Los and Denver,

Leaders in the safety net ambulatory care systems in Houston, in systems care ambulatory net safety the in Leaders lenges they face. they lenges

Much has been written about what safety net providers are doing to address the chal- the address to doing are providers net safety what about written been has Much

Marketplace

System Adjustment to the Changing Health Care Health Changing the to Adjustment System

remain. remain.

Medicaid volume and the policy of open eligibility for the uninsured will likely will uninsured the for eligibility open of policy the and volume Medicaid

that this trend has stabilized, the challenge posed by the combination of declining of combination the by posed challenge the stabilized, has trend this that

have been substantially filled by the uninsured. Although there are some indications some are there Although uninsured. the by filled substantially been have

intended, but as Medicaid patients have moved to private providers, the new slots new the providers, private to moved have patients Medicaid as but intended,

improvements in the CHCs under the waiver have expanded ambulatory access as access ambulatory expanded have waiver the under CHCs the in improvements

the proportion of these visits covered by Medicaid has. The addition of PPPs and PPPs of addition The has. Medicaid by covered visits these of proportion the

market, and while the number of ambulatory care visits has not declined since 1995, since declined not has visits care ambulatory of number the while and market,

demand into focus. LACDHS has not been able to keep its share of the Medicaid the of share its keep to able been not has LACDHS focus. into demand

The move to managed care in Medicaid has brought the problem of high of problem the brought has Medicaid in care managed to move The

will support the redesigned system. system. redesigned the support will

provides and developing local—both state and county—funding mechanisms that mechanisms county—funding and state local—both developing and provides

ble. LACDHS thus has the dual challenge of fundamentally reorganizing the care it care the reorganizing fundamentally of challenge dual the has thus LACDHS ble.

they asserted, will be a system that is more efficient but possibly less financially sta- financially less possibly but efficient more is that system a be will asserted, they

the reduction in revenues associated with the decline in inpatient care. The result, The care. inpatient in decline the with associated revenues in reduction the

tem as a whole, some officials noted that these savings may be more than offset by offset than more be may savings these that noted officials some whole, a as tem

latory care–focused system can result in a reduction in costs to the health care sys- care health the to costs in reduction a in result can system care–focused latory

anisms, particularly DSH, favor inpatient care over ambulatory care. While an ambu- an While care. ambulatory over care inpatient favor DSH, particularly anisms,

port the reorganized system. LACDHS officials claimed that current funding mech- funding current that claimed officials LACDHS system. reorganized the port

It is not clear that adequate local and state funds will be made available to sup- to available made be will funds state and local adequate that clear not is It

the waiver, it will have a more efficient system. system. efficient more a have will it waiver, the 2000; Riccardi 2000). If LACDHS can achieve the goals it has set for itself under itself for set has it goals the achieve can LACDHS If 2000). Riccardi 2000; consideration of their requests for charity care for other patients needing hospital services—a mutually beneficial arrangement. The outcome is more one-sided in the case of Medicaid-eligible women. Respon- dents in both Houston and Los Angeles reported incidents of pregnant women being recruited by managed care plans after they had received an initial workup at the public clinics. The managed care plans receive the reimbursement for prenatal care and delivery, while the public clinics bear the costs of outreach and initial screening. In addition, since both HCHD and LACDHS have their own managed care plans, the loss includes the capitation associated with two potential plan enrollees—the mother and her newborn. In the case of Denver Health, the clinics and the hospital are part of an integrated system, so the costs and reimbursement for prenatal care and delivery accrue to the same system, regardless of the woman’s eligibility status. This section considers five ways in which ambulatory care safety nets in the study communities have adjusted to the changing health care marketplace. The actions discussed here—eligibility control, improved information management, the development of public sector managed care organizations, the organization of medical care within the public system, and coordination with the private sector—were chosen because they illuminate broader issues in the provision of ambulatory care for low- income people. Safety net providers can affect demand for their services and so control costs by changing the eligibility criteria for their programs. The systems that have invested in information management systems have seen returns in higher revenues and lower costs. The difficulties that public systems have had in launching and sus- taining managed care plans highlight the deficiencies in their systems. Finally, the systems have had different degrees of success in translating their extensive ambulatory care networks into integrated systems of care, and they have taken different approaches toward private safety net providers.

Eligibility Control The level of demand for indigent care is determined in large part by the number of uninsured in the safety net’s service area. Local jurisdictions that benefit from state- level decisions to support a more generous Medicaid program have less remaining demand for care that has to be met through local initiatives. The number of undocumented immigrants and the level of private insurance coverage also influence demand. Texas and Colorado cover a smaller proportion of their indigent populations under Medicaid than does California, leaving more people to be served by the safety net. Colorado, however, has a high rate of employer-sponsored insurance coverage (Moon et al. 1998), mitigating the effect of its stringent Medicaid eligibility standards. Public liability for the remaining uninsured can be controlled to some extent by limiting eligibility for subsidized services and enforcing eligibility standards and service area restrictions. By controlling eligibility, public programs can contain costs and improve quality, if only by reducing the queue. Control of eligibility becomes even more important as a means to regulate demand for locally financed services as other barriers to access fall, particularly as publicly financed care expands at community

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July 2000, federal funding will be gradually reduced and state funding is scheduled is funding state and reduced gradually be will funding federal 2000, July

been largely funded with special federal monies. In the waiver extension approved in approved extension waiver the In monies. federal special with funded largely been

continues to provide financial support for the system, but the expansion program has program expansion the but system, the for support financial provide to continues

portion of new clients at the PPP clinics, for example, are uninsured. The county The uninsured. are example, for clinics, PPP the at clients new of portion

of the population served by the expanding ambulatory care network—a large pro- large network—a care ambulatory expanding the by served population the of

this open-door policy has been nearly endless demand and is seen in the composition the in seen is and demand endless nearly been has policy open-door this

needs of indigent patients without regard for residence or legal status. The effect of effect The status. legal or residence for regard without patients indigent of needs

HCHD’s. Along with its private partners, LACDHS is trying to serve the health care health the serve to trying is LACDHS partners, private its with Along HCHD’s.

broadly than either Denver or Houston, in a service area that is even larger than larger even is that area service a in Houston, or Denver either than broadly

of ambulatory care sites comes from the fact that it has defined its mission more mission its defined has it that fact the from comes sites care ambulatory of

In contrast, part of LACDHS’s struggle to meet demand at its expanded network expanded its at demand meet to struggle LACDHS’s of part contrast, In

2000). Line Health American ( reconsidered

latory care but remain within the HCHD system. This policy is currently being currently is policy This system. HCHD the within remain but care latory

shifting their care to the system’s hospitals. Therefore, costs are shifted out of ambu- of out shifted are costs Therefore, hospitals. system’s the to care their shifting

ambulatory care access by undocumented residents thus has the perverse effect of effect perverse the has thus residents undocumented by access care ambulatory

department, where federal regulations require that all comers be seen. Restricting seen. be comers all that require regulations federal where department,

tially more efficient ambulatory care system and into HCHD’s own emergency own HCHD’s into and system care ambulatory efficient more tially

its services. This restriction on services forces the undocumented out of the poten- the of out undocumented the forces services on restriction This services. its

recent years, however, it has enforced this criterion, effectively reducing demand for demand reducing effectively criterion, this enforced has it however, years, recent

restriction against providing subsidized services for undocumented immigrants. In immigrants. undocumented for services subsidized providing against restriction

While its residency requirement is strictly enforced, it has in the past ignored its ignored past the in has it enforced, strictly is requirement residency its While

large part by county property taxes, and its service area reflects this broader base. broader this reflects area service its and taxes, property county by part large

tains Houston’s suburbs with all their potential for growth. HCHD is funded in funded is HCHD growth. for potential their all with suburbs Houston’s tains

more diverse population than that found in Denver Health’s service area and con- and area service Health’s Denver in found that than population diverse more

service area includes all of Harris County, which encompasses a much broader and broader much a encompasses which County, Harris of all includes area service

Similarly, HCHD eligibility is restricted to residents of Harris County. HCHD’s County. Harris of residents to restricted is eligibility HCHD Similarly,

ambulatory care needs of this population. this of needs care ambulatory

source of system stress. Private clinics have opened in the suburbs to help meet the meet help to suburbs the in opened have clinics Private stress. system of source

service area. Denver Health is thus shielded from the full impact of this important this of impact full the from shielded thus is Health Denver area. service

population in the Denver area is in the suburban counties, beyond Denver Health’s Denver beyond counties, suburban the in is area Denver the in population

its residency requirement is strictly enforced. Much of the growth in the uninsured the in growth the of Much enforced. strictly is requirement residency its

service area. It maintains a “don’t ask” policy toward undocumented immigrants but immigrants undocumented toward policy ask” “don’t a maintains It area. service

Thus, for historical reasons, Denver Health has a clearly defined and relatively small relatively and defined clearly a has Health Denver reasons, historical for Thus,

on the other hand, is a state-sponsored institution, which implies a broader mandate. broader a implies which institution, state-sponsored a is hand, other the on

the city, its geographic restrictions are not without justification. University Hospital, University justification. without not are restrictions geographic its city, the

Health. Since half of Denver Health’s funding for uncompensated care comes from comes care uncompensated for funding Health’s Denver of half Since Health.

it would provide to indigent Denver residents to those not available at Denver at available not those to residents Denver indigent to provide would it

Denver residents then fell to University Hospital, which, in turn, limited the services the limited turn, in which, Hospital, University to fell then residents Denver

sidized services to residents of the city and county of Denver. Responsibility for non- for Responsibility Denver. of county and city the of residents to services sidized

non-Denver residents in the 1980s, Denver Health decided to limit access to its sub- its to access limit to decided Health Denver 1980s, the in residents non-Denver

trol eligibility for its programs. In response to spiraling demand for its services from services its for demand spiraling to response In programs. its for eligibility trol

balance sheet can be attributed to its ability to limit its service area and so tightly con- tightly so and area service its limit to ability its to attributed be can sheet balance

Part of Denver Health’s success in maintaining both high quality and a healthy a and quality high both maintaining in success Health’s Denver of Part

degree to which they are enforced. enforced. are they which to degree access at their facilities, with differences in both the stringency of the rules and the and rules the of stringency the both in differences with facilities, their at access to increase. The proposed breadth of financial support for the system is consistent with the breadth of eligibility for its services. The eligibility policies that are in force in the three systems reflect a mixture of state policy, legal mandates, and local or system choice. Denver’s decision to limit eligibility to Denver residents is possible because alternative sources of publicly supported care—University Hospital, in particular—exist for those who are excluded. Neither Houston nor Los Angeles has that luxury. Much of Houston’s uninsured population is undocumented. HCHD has used this eligibility criterion specifically to limit demand for services, but because this exclusion can only be enforced in ambulatory settings, the savings to the system may be illusory. Los Angeles appears to have decided that, rather than controlling eligibility, it will seek funding appropriate to the population it has decided to serve.

Information Management Given the complexities of medical care and the financing available for indigent care, enormous amounts of information are required to achieve both efficiency and sol- vency. The management information systems in the three sites are at different points along a continuum of development and implementation. Denver sees information technology as an instrument of change and has a fully functional information system for patient care, billing, and eligibility. Los Angeles is working to standardize information systems within its clusters so that it can begin integrating its systems across clusters. Improving information management between ambulatory and hospital sites within clusters is included as a goal of the waiver project. Houston officials recognize the need for a new information system, but have not yet begun to implement it. The differences in the information systems are reflected in how smoothly the systems operate, particularly with respect to the coordination of care across ambulatory and hospital or specialty care sites. With respect to both patient care and financial stability, Denver Health officials see effective management information as central to the success of their system, play- ing a role in such diverse areas as patient satisfaction, management, financial operations, and Medicaid enrollment (Morefield 1999). Early on, these officials recognized that in order for Denver Health to operate as an integrated system of care it would need to be able to track patients and manage their care across the various service sites. They set as a goal the establishment of lifetime records of care for their patients and even considered coordinating with other safety net providers in establishing unique patient identifiers. Software has been standardized at all levels of the system. At the time of our site visit, medical records imaging was being implemented so that hospitals and clinics could have access to the same patient files. Denver Health information specialists claimed that the system has, among its other accom- plishments, improved patient access and care. Denver Health managed care administrators reported that the system allows them to track patients’ eligibility for various reimbursement, even allowing identification of potential retrospective reimbursement for newly enrolled Medicaid patients. In addition, repeat users of uncompen-

sated inpatient care can be identified and efforts made to establish a regime of pre- 18 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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the same qualities found in a well-functioning ambulatory care system. In Houston In system. care ambulatory well-functioning a in found qualities same the

referral patterns for specialty and inpatient care—that is, an integrated system—or integrated an is, care—that inpatient and specialty for patterns referral

functioning managed care network features primary care providers with established with providers care primary features network care managed functioning

coming of managed care served to highlight the weaknesses in these systems. A well- A systems. these in weaknesses the highlight to served care managed of coming

start in the emerging Medicaid managed care market. Instead, in many ways, the ways, many in Instead, market. care managed Medicaid emerging the in start

an established Medicaid clientele should have provided the public system with a head a with system public the provided have should clientele Medicaid established an

In each city, the existence of an ambulatory care network in a community with community a in network care ambulatory an of existence the city, each In

not consider its managed care plan to be crucial to its overall success. success. overall its to crucial be to plan care managed its consider not

and its operations have been significantly cut back (Rutledge 2000). LACDHS does LACDHS 2000). (Rutledge back cut significantly been have operations its and

the nation (Sparer and Brown 2000). HCHD’s plan, however, has had little success little had has however, plan, HCHD’s 2000). Brown and (Sparer nation the

Access is recognized as one of the most successful safety net managed care plans in plans care managed net safety successful most the of one as recognized is Access

Rowe 2000). Clearly, it is possible to make public managed care work well. Colorado well. work care managed public make to possible is it Clearly, 2000). Rowe

financial difficulties and often fail even to retain the system’s patient base (Gray and (Gray base patient system’s the retain to even fail often and difficulties financial

Recent reports, however, suggest that publicly sponsored plans frequently experience frequently plans sponsored publicly that suggest however, reports, Recent

icaid revenues and DSH allocations where these funds are tied to Medicaid volume. Medicaid to tied are funds these where allocations DSH and revenues icaid

goal for each has been to maintain Medicaid market share in order to protect Med- protect to order in share market Medicaid maintain to been has each for goal

mitment to public sector managed care varies among the three systems. The primary The systems. three the among varies care managed sector public to mitment

included the development of its own managed care plan, although the level of com- of level the although plan, care managed own its of development the included

In all three cities, the public system’s response to Medicaid managed care has care managed Medicaid to response system’s public the cities, three all In

Public Managed Care Plans Care Managed Public

mation technology. technology. mation

security that Denver Health enjoys have allowed it to make this investment in infor- in investment this make to it allowed have enjoys Health Denver that security

instance of spending money to save money. The relative autonomy and financial and autonomy relative The money. save to money spending of instance

as the returns on both the cost and revenue sides, have justified the expense—an the justified have sides, revenue and cost the both on returns the as

operate, its information specialists claimed that improvement in patient care, as well as care, patient in improvement that claimed specialists information its operate,

critical. While Denver Health’s information system has been expensive to install and install to expensive been has system information Health’s Denver While critical.

notified and clients run the risk of having problems left untreated until they become they until untreated left problems having of risk the run clients and notified

problems with deliveries or the newborns themselves, the appropriate clinics are not are clinics appropriate the themselves, newborns the or deliveries with problems

clinics so that postpartum and well-baby care can be initiated. Even when there are there when Even initiated. be can care well-baby and postpartum that so clinics

for prenatal clients who deliver at HCHD hospitals are not routinely filed with the with filed routinely not are hospitals HCHD at deliver who clients prenatal for

bility applications or repeat tests that have been done at the clinic level. Birth reports Birth level. clinic the at done been have that tests repeat or applications bility

as a whole. Houston clients who are referred to the hospital often must refile eligi- refile must often hospital the to referred are who clients Houston whole. a as

fits of better information management for ambulatory care clients and for the system the for and clients care ambulatory for management information better of fits

Comparing the reports from Denver with those from Houston reveals the bene- the reveals Houston from those with Denver from reports the Comparing

show promise. promise. show

reported that not all the “bugs” have been worked out of the system, but it does it but system, the of out worked been have “bugs” the all not that reported

specialty care when necessary and back to the clinics for follow-up care. Advocates care. follow-up for clinics the to back and necessary when care specialty

mented systems facilitate the referral of ambulatory care patients to other sites for sites other to patients care ambulatory of referral the facilitate systems mented

dardizing technology must come first. Within the LAC+USC cluster, recently imple- recently cluster, LAC+USC the Within first. come must technology dardizing

have historically operated with relative independence means that the task of stan- of task the that means independence relative with operated historically have

ambitious goals. The complexity inherent in a much larger system with clusters that clusters with system larger much a in inherent complexity The goals. ambitious

The system that Los Angeles is struggling to put in place has, for now, much less much now, for has, place in put to struggling is Angeles Los that system The

the uninsured. uninsured. the ventive care for them at the clinics, in effect establishing a managed care program for program care managed a establishing effect in clinics, the at them for care ventive and Los Angeles, only the building blocks of such a system were in place; the coming of managed care made the lack of integration among the parts of the system apparent. It also underscored the need for better information management, since managing care requires providers to track the care their patients receive. The safety net ambulatory care system has costs associated with certain client characteristics, such as a higher incidence of substance abuse and mental illness, greater problems with noncompliance with treatment regimes, and a higher number of appointment no-shows—characteristics that may not be present in non–safety net settings. This problem was recognized in Denver and Los Angeles and some protec- tions were offered to the safety net, particularly in the areas of default enrollment share, guaranteed contracting, and preferential reimbursement (Draper and Gold 2000; Moon et al. 1998). In contrast, Texas offered its safety net providers minimal protection. Such protection, however, cannot remedy a situation in which patients, once assigned, choose to leave the public system. The poor integration of ambulatory care within the larger system and the inability to coordinate care across the different parts of the system are not the only factors limiting the success of public managed care in Houston and Los Angeles. The three markets are also very different with respect to managed care penetration, the amount of competition from other providers, and the strength of political support for the public system. Moreover, Denver Health officials pursued entry into the Medicaid managed care market early and aggressively as part of a consortium of private community clinics that extend its ambulatory care capacity and specialty hospitals that complement its ambulatory care strength. In contrast, HCHD entered the market late and LACDHS entered less aggressively as part of a loose consortium of plans. Finally, the managed care mentality may be at odds with the mission of safety net providers that historically have placed meeting the needs of those who have nowhere else to turn ahead of saving money. If safety net managed care plans are to succeed, they will need to find, as Denver Health appears to have done, some compromise that will allow them to reconcile their mission with their need to survive in the new health care environment. As one LACDHS physician noted, good medical care most often means efficiently provided care, and that means lower total costs. Efficiency and quality, he claimed, are not irreconcilable.

Organization of Care and System Integration Officials in all three systems recognize the importance of giving high priority to ambulatory care and are at different stages of reorganizing to realize this goal. Den- ver has almost all of the pieces in place, Los Angeles has system reorganization as a major waiver goal, and Houston is in the conceptual stage. The specifics differ in each site since the constraints and challenges are different, but each reorganization has two main goals. The first is to make primary care available in community settings, both to improve access by the client population and to reduce pressure on hospital emergency departments. The second is to encourage the delivery of care in the least expensive setting that is appropriate by establishing the primary care providers as

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which to improve patient health rather than as components to be integrated into a into integrated be to components as than rather health patient improve to which

specialty diagnostic care, public health services, and inpatient care all as tools with tools as all care inpatient and services, health public care, diagnostic specialty

cials reported that patient care is organized under teams that regard ambulatory care, ambulatory regard that teams under organized is care patient that reported cials

problems seen in many public systems (Moore 1997). Most significantly, system offi- system significantly, Most 1997). (Moore systems public many in seen problems

nationally recognized for quality and efficiency, with fewer of the access and waiting and access the of fewer with efficiency, and quality for recognized nationally

In contrast, under Denver Health, Denver has an ambulatory care system that is that system care ambulatory an has Denver Health, Denver under contrast, In

the two systems as separate. as systems two the

sectors, but respondents reported that clinic personnel and clients generally still view still generally clients and personnel clinic that reported respondents but sectors,

tion plan has instituted joint service provision between the public and personal health personal and public the between provision service joint instituted has plan tion

between the comprehensive health centers and the health centers. The reorganiza- The centers. health the and centers health comprehensive the between

LACDHS, although historically these functions have been separated in practice in separated been have functions these historically although LACDHS,

nizationally, both public and personal health services operate under the authority of authority the under operate services health personal and public both nizationally,

mental effects on physicians’ willingness to coordinate care across service sites. Orga- sites. service across care coordinate to willingness physicians’ on effects mental

lic medical centers at the core of each cluster. This situation has potentially detri- potentially has situation This cluster. each of core the at centers medical lic

rate employment system and are not regarded as equal to the physicians at the pub- the at physicians the to equal as regarded not are and system employment rate

reorganization. Within most of the clusters, ambulatory clinicians remain in a sepa- a in remain clinicians ambulatory clusters, the of most Within reorganization.

other services. As in Houston, however, physician contracts may impede effective impede may contracts physician however, Houston, in As services. other

accredited health care network with formal linkages between ambulatory care and care ambulatory between linkages formal with network care health accredited

effectiveness across the clusters. The LAC+USC cluster has set up a nationally a up set has cluster LAC+USC The clusters. the across effectiveness

referral networks have been established and are operating with varying degrees of degrees varying with operating are and established been have networks referral

and local advocates reported that access to care has improved. For other services, other For improved. has care to access that reported advocates local and

specialty services have been relocated from the hospitals to the community clinics community the to hospitals the from relocated been have services specialty

progress varies among clusters. Redesign of the information system has begun. Some begun. has system information the of Redesign clusters. among varies progress

seen in Denver. It is already several steps down that road, although the level of level the although road, that down steps several already is It Denver. in seen

Los Angeles has as a waiver goal a degree of system integration similar to that to similar integration system of degree a goal waiver a as has Angeles Los

personal health services overlap, the required coordination is difficult to arrange. arrange. to difficult is coordination required the overlap, services health personal

provided under separate governmental structures, so that in areas where public and public where areas in that so structures, governmental separate under provided

taken precedence over the needs of the clinics. In addition, public health services are services health public addition, In clinics. the of needs the over precedence taken

Some respondents also feel that, at times, the needs of the medical curriculum have curriculum medical the of needs the times, at that, feel also respondents Some

schools supply the clinic staff, hampering standardization and coordination of care. of coordination and standardization hampering staff, clinic the supply schools

staffs at the HCHD clinics and hospitals are separate, and two different medical different two and separate, are hospitals and clinics HCHD the at staffs

tal settings is also influenced by the structure of physician employment. Physician employment. physician of structure the by influenced also is settings tal

System integration and coordination of care between the ambulatory and hospi- and ambulatory the between care of coordination and integration System

reported that a task force has been formed to address the issue. the address to formed been has force task a that reported

our site visit, had yet to formulate a formal path for the future. County officials County future. the for path formal a formulate to yet had visit, site our

struggling primarily with serious financial strains for several years and, at the time of time the at and, years several for strains financial serious with primarily struggling

hospital, and clinics—recognize the need to reorganize. The HCHD system has been has system HCHD The reorganize. to need the clinics—recognize and hospital,

parallel system rather than a gateway. Officials at all levels—county, hospital district, hospital levels—county, all at Officials gateway. a than rather system parallel

specialty clinics and hospital system are not reliable, ambulatory care is effectively a effectively is care ambulatory reliable, not are system hospital and clinics specialty

services. However, because systems to coordinate care into and out of the HCHD the of out and into care coordinate to systems because However, services.

stop shopping” for their clients, including pharmacy, podiatry, and optometry and podiatry, pharmacy, including clients, their for shopping” stop

in the community. Clinic officials are proud that the community clinics offer “one- offer clinics community the that proud are officials Clinic community. the in

different ways of operating. Houston has a long history of providing ambulatory care ambulatory providing of history long a has Houston operating. of ways different

The similarity in the basic structure of the three systems, nevertheless, masks very masks nevertheless, systems, three the of structure basic the in similarity The

care. care. be established, both “upward” for nonprimary care and “backward” for follow-up for “backward” and care nonprimary for “upward” both established, be system. They emphasized that because they directly employ all system physicians, they have greater control over how care is delivered across service sites. The Los Angeles system is huge, and the reorganization required is substantial. The goals of the first five-year waiver were ambitious and are as yet unmet, suggest- ing that change may require more time than planners thought. Respondents in Den- ver claimed that Denver Health has been an integrated system from the outset. Den- ver Health may appear farther along in its adjustment to the changing health care marketplace in part because it did not have as far to go. The impetus for Los Ange- les’s drastic system redesign was the financial crisis of 1995. A similar crisis may be necessary in Houston to motivate change in what has been until recently a reasonably successful system of indigent care.

Coordination with Private Ambulatory Care Providers While Denver’s system appears to have significantly fewer problems than either Houston’s or Los Angeles’s, the fact that private clinics have sprung up to serve indigent populations outside of the Denver Health system suggests that even a system this effective may be unable to meet all of the demand for indigent ambulatory care despite its geographically circumscribed service area. Denver Health welcomed a private clinic in one neighborhood where it admitted that demand had grown more rapidly than it could meet. In another area, however, Denver Health officials viewed a private clinic as potential competition and claimed that its services were not needed in that community. That clinic is affiliated with a private hospital and with one of the other Medicaid managed care plans. There are private safety net clinics in Houston and Los Angeles as well. In Hous- ton, these clinics effectively serve as a safety net for the safety net and are not integrated at all with the HCHD system. LACDHS is trying to walk a middle path, one that neither ignores private clinics nor treats them as competition, but rather takes them on as partners to help meet the needs of a broadly defined population. Under its Public Private Partnership program, LACDHS recognizes that it cannot have a nonrestrictive eligibility system and still meet all of the demand for care. By incor- porating private clinics as additional gateways into its system, it adds to its ambulatory care network a dimension not available in the other study sites. In fact, many county respondents believe that the inclusion of private partners has strengthened the ambulatory care safety net by giving LACDHS greater flexibility to match its capacity to the changes in the geographic distribution of demand and to the available funding. Using its information management and physician employment strategies, Denver Health has integrated its ambulatory care network into the larger public health care system to a noteworthy degree. Los Angeles is moving in the same direction, but has, as it did in the case of eligibility, defined its task more broadly. The integration of private safety net ambulatory care providers into the LACDHS system represents a degree of coordination not present in Denver and one that is consistent with the

larger population that LACDHS has chosen to serve. 22 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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system’s competitors in the health care marketplace. care health the in competitors system’s

fore both subject to the political process—as in Los Angeles—and overseen by the by overseen Angeles—and Los in process—as political the to subject both fore

other local health care institutions. Decisions as to the direction of change are there- are change of direction the to as Decisions institutions. care health local other

sight, but its board includes not only political appointees but also representatives of representatives also but appointees political only not includes board its but sight,

system decisions. The day-to-day activities of HCHD are also subject to board over- board to subject also are HCHD of activities day-to-day The decisions. system

central policies. In addition, the county Board of Supervisors has considerable say in say considerable has Supervisors of Board county the addition, In policies. central

policy is set centrally, the six clusters have relative independence in implementing in independence relative have clusters six the centrally, set is policy

The LACDHS system is larger and much more complicated. Although overall Although complicated. more much and larger is system LACDHS The

to implement policies without bureaucratic restrictions. restrictions. bureaucratic without policies implement to

has the freedom both to set its own course without first seeking higher approval and approval higher seeking first without course own its set to both freedom the has

the Denver Health authority rather than for the government. Denver Health, thus, Health, Denver government. the for than rather authority Health Denver the

indigent care—subject to specific performance requirements. Its personnel work for work personnel Its requirements. performance specific to care—subject indigent

has contracts with the county government to provide specific services—including specific provide to government county the with contracts has

Rather than operating as an arm of the county or city government, Denver Health Denver government, city or county the of arm an as operating than Rather

pital authority gave it freedom from the regulations governing other public entities. public other governing regulations the from freedom it gave authority pital

would impede its operating flexibility. Denver Health’s 1994 restructuring as a hos- a as restructuring 1994 Health’s Denver flexibility. operating its impede would

Early on, officials at Denver Health saw the need for independence from rules that rules from independence for need the saw Health Denver at officials on, Early

ity to implement policies by public sector purchasing and personnel regulations. personnel and purchasing sector public by policies implement to ity

pered in their ability to develop system goals by the political process and in their abil- their in and process political the by goals system develop to ability their in pered

the market at any given time. Public providers, on the other hand, are often ham- often are hand, other the on providers, Public time. given any at market the

Private providers generally have the flexibility to adjust their actions to the needs of needs the to actions their adjust to flexibility the have generally providers Private

Governance Governance

gests that differences in governance, financing, and market conditions are crucial. are conditions market and financing, governance, in differences that gests

funded. A comparison of the experiences of Denver, Houston, and Los Angeles sug- Angeles Los and Houston, Denver, of experiences the of comparison A funded.

strong ambulatory care sector if the larger public system itself is not adequately not is itself system public larger the if sector care ambulatory strong

parts. Finally, even a strong commitment to ambulatory care cannot guarantee a guarantee cannot care ambulatory to commitment strong a even Finally, parts.

a different role in the local health care marketplace than do their private counter- private their do than marketplace care health local the in role different a

most strongly in the areas of governance and finance. In addition, public systems play systems public addition, In finance. and governance of areas the in strongly most

constraints on their flexibility that private providers do not, constraints that are felt are that constraints not, do providers private that flexibility their on constraints

critical to success. While this is no less true in the public sector, public systems face systems public sector, public the in true less no is this While success. to critical

found that the ability to respond quickly and decisively to changes as they occur is occur they as changes to decisively and quickly respond to ability the that found

this policy into action differs across the sites. Providers in the private sector have sector private the in Providers sites. the across differs action into policy this

care for reasons of both access and efficiency, but the ability of system officials to put to officials system of ability the but efficiency, and access both of reasons for care

Each of the study communities has made a policy commitment to ambulatory to commitment policy a made has communities study the of Each

to the changing health care market. market. care health changing the to

bility of public systems is, in large part, a function of their ability to continually adapt continually to ability their of function a part, large in is, systems public of bility

that most local governments cannot sustain over the long term. The long-term sta- long-term The term. long the over sustain cannot governments local most that

viding for its clients without increased funding or other preferential policies, a trend a policies, preferential other or funding increased without clients its for viding

likely to be system instability; the system becomes less able to meet its charge of proof charge its meet to able less becomes system the instability; system be to likely

to another owner. When a public provider begins to fail, however, the result is more is result the however, fail, to begins provider public a When owner. another to

When a private provider fails, the result may be bankruptcy or the transfer of its assets its of transfer the or bankruptcy be may result the fails, provider private a When Determinants of System Stability Stability System of Determinants The position of the ambulatory care service within each system also varies across the study communities. Within the current management structure at HCHD, ambulatory care officials do not always participate directly in decisions that affect their sector. Within the LACDHS system, responsibility for ambulatory care does not rest clearly in one place, even at the central level. In contrast, ambulatory care within the Denver Health management structure is on an equal footing with other services, including inpatient care. Strong leadership commitment to ambulatory care is also critical. Ambulatory care has strong support centrally at LACDHS. At the cluster level, however, leadership commitment to ambulatory care varies, as does the ability to move that cluster’s system toward the centrally articulated goal of improved ambulatory care. At Den- ver Health, the current leadership has risen through the ranks and understands the system at all levels. With its forceful leadership and strong commitment, Denver Health has been able to achieve a greater degree of system integration than either HCHD or LACDHS. The recent change in HCHD’s leadership has set the stage for progress, but it remains to be seen how ambulatory care will be treated under the new administration. Finally, Denver Health’s direct employment of physicians means it has not only the authority to act but also direct control over the personnel most critical for success. In contrast, both HCHD and LACDHS rely on medical schools for a large part of their clinic staff, and clinic physicians’ affiliation with their medical school may compete with their loyalty to the public health care system. Denver Health officials noted that the importance of direct employment of physicians should not be under- emphasized.

Financing Both Denver Health and LACDHS currently have secure funding streams. Denver Health’s funding, however, is primarily local, while LACDHS is dependent for the next five years on federal funding under its Section 1115 waiver and on future state dollars leveraged by the terms of the waiver extension. There were no indications that local financing for Denver Health is in jeopardy. LACDHS’s federal funding, however, is nonrenewable under the current terms of its waiver. There has been movement toward greater state funding, as required under the waiver extension, and greater local funding through the allocation of the county’s share of the tobacco set- tlement to health care, but such developments are not assured. HCHD has been sub- jected to variable funding over the years and, despite recent increases in the property tax rate that funds it, history suggests that there is no guarantee that that funding stream is secure. The importance of an adequate level of financing for indigent care is indis- putable. However, a comparison of these communities suggests that flexibility in the use of available funds is also critical for the strength of the ambulatory care sector. Much of the funding available for indigent care is directed toward hospitals or based on the level of hospital care provided. Decisions about where to provide care may, therefore, be distorted by the need to ensure that the criteria for qualifying for these

funds are met. Often, respondents claimed, qualifying for funds means maintaining 24 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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question of larger county and/or state budget priorities and not just of the orienta- the of just not and priorities budget state and/or county larger of question

care access offered in Denver Health’s more circumscribed service area would be a be would area service circumscribed more Health’s Denver in offered access care

patient base than does Denver Health. Whether they could sustain the ambulatory the sustain could they Whether Health. Denver does than base patient

HCHD and LACDHS each have a larger service area and consequently a broader a consequently and area service larger a have each LACDHS and HCHD

funding because of a commitment to ambulatory care is unclear. More critically, More unclear. is care ambulatory to commitment a of because funding

tory care is due to funding flexibility or whether these systems have sought such sought have systems these whether or flexibility funding to due is care tory

and the least flexibility in its funding. Whether their success in promoting ambula- promoting in success their Whether funding. its in flexibility least the and

flexibility afforded it under its waiver. HCHD has the most hospital-centric program hospital-centric most the has HCHD waiver. its under it afforded flexibility

LACDHS has increased its commitment to ambulatory care while it has enjoyed the enjoyed has it while care ambulatory to commitment its increased has LACDHS

ver Health has the most flexibility and the strongest ambulatory care sector. care ambulatory strongest the and flexibility most the has Health ver

flexibility is clearly correlated with the strength of the ambulatory care sector. Den- sector. care ambulatory the of strength the with correlated clearly is flexibility

the strength of the public system. Furthermore, within the public system, funding system, public the within Furthermore, system. public the of strength the

In the three study communities, the level of funding available is a major factor in factor major a is available funding of level the communities, study three the In

levels. levels.

costs that are greater than the system can absorb at current or foreseeable funding foreseeable or current at absorb can system the than greater are that costs

more efficient on a patient-by-patient basis, the increased volume may entail overall entail may volume increased the basis, patient-by-patient a on efficient more

community effectively reduces the barriers to access and, while such care may be may care such while and, access to barriers the reduces effectively community

ously recognized, the so-called “woodwork effect.” Providing ambulatory care in the in care ambulatory Providing effect.” “woodwork so-called the recognized, ously

had the effect of identifying a higher level of demand for care than had been previ- been had than care for demand of level higher a identifying of effect the had

aware that funding community-based care under an open-door eligibility policy has policy eligibility open-door an under care community-based funding that aware

be available from state and local sources when the waiver ends. System officials are officials System ends. waiver the when sources local and state from available be

level of ambulatory care access, let alone the level envisioned in the waiver goals, will goals, waiver the in envisioned level the alone let access, care ambulatory of level

waiver extension. It is unclear whether the resources needed to continue the current the continue to needed resources the whether unclear is It extension. waiver

and the associated flexibility are being phased out, however, over the five years of the of years five the over however, out, phased being are flexibility associated the and

ity in financing between hospital and ambulatory care. The enhanced federal funds federal enhanced The care. ambulatory and hospital between financing in ity

Under its waiver, LACDHS has gained a larger overall budget and some flexibil- some and budget overall larger a gained has LACDHS waiver, its Under

its centrally controlled budget—to spend funds as needed for patient care. care. patient for needed as funds spend budget—to controlled centrally its

is adequately funded, part is also due to the fact that it is freer than HCHD—with than freer is it that fact the to due also is part funded, adequately is

or outpatients. While part of Denver Health’s flexibility comes from the fact that it that fact the from comes flexibility Health’s Denver of part While outpatients. or

much the same way they consider staff as treating patients not as treating inpatients treating as not patients treating as staff consider they way same the much

funds as earmarked for patient care rather than for hospital care or clinic care, in care, clinic or care hospital for than rather care patient for earmarked as funds

authority to issue debt. Denver Health financial officials are able to consider available consider to able are officials financial Health Denver debt. issue to authority

care through its contribution to CICP. Moreover, Denver Health has the legal the has Health Denver Moreover, CICP. to contribution its through care

vision of inpatient services, and the state provides funding for indigent ambulatory indigent for funding provides state the and services, inpatient of vision

receives under its county contract for indigent care are not directly linked to the pro- the to linked directly not are care indigent for contract county its under receives

grants for the public health services they provide. The funds that Denver Health Denver that funds The provide. they services health public the for grants

receive grants for indigent ambulatory care. They have also secured competitive secured also have They care. ambulatory indigent for grants receive

the use of available funds. All of the Denver Health clinics are federally qualified and qualified federally are clinics Health Denver the of All funds. available of use the

Among the three study communities, Denver Health has the most flexibility in flexibility most the has Health Denver communities, study three the Among

indigent care is more reliably funded than that for ambulatory care. care. ambulatory for that than funded reliably more is care indigent

enues more than it reduces system costs. In general, reimbursement for inpatient for reimbursement general, In costs. system reduces it than more enues

emergency conditions at the hospital is reimbursable), this policy reduces system rev- system reduces policy this reimbursable), is hospital the at conditions emergency

bursable under any standard federal program (while the same care provided under provided care same the (while program federal standard any under bursable

tem costs, but because non-hospital-based care for this population is not reim- not is population this for care non-hospital-based because but costs, tem

that providing care in a presumably more efficient ambulatory setting reduced sys- reduced setting ambulatory efficient more presumably a in care providing that higher-than-desired levels of inpatient care. LACDHS respondents made the point the made respondents LACDHS care. inpatient of levels higher-than-desired tion of the public health care system. Broader eligibility in Los Angeles and Hous- ton could require a higher overall allocation to the public system in addition to the larger investment in ambulatory care availability.

Market Conditions The market in which each system operates has an enormous influence on its success. Both Los Angeles and Denver exhibit high levels of managed care penetration and the hospital market in all three communities is highly competitive. Los Angeles and Houston are each home to large undocumented populations and resulting high levels of uninsurance. All of these factors are associated with high stress on the safety net (Norton and Lipson 1998). What differs substantially across the three communities is the level of support enjoyed by the public system and the role that the public system plays in the broader health care market. Denver’s health care market has seen substantial consolidation in the past decade among non–safety net providers as managed care has spread rapidly through the metropolitan area (Pollock 1996). In contrast to Houston and Los Angeles, however, there is only one academic medical center and one children’s hospital, reducing the usual competition for Medicaid patients. In addition, these hospitals are both part of the consortium sponsoring the public sector Medicaid managed care plan and so must view Denver Health as a partner as much as a competitor. Denver Health moved early to ensure its place in Medicaid managed care by forming this alliance with University Hospital and Children’s Hospital. Its ambulatory care clinics represented the bulk of safety net ambulatory care providers in Denver proper, and including the coalition of private safety net clinics in the suburbs in its Medicaid managed care alliance effectively completed the network of safety net providers. The system’s current leadership enjoys great local deference, and local political support for the system is strong. Denver Health and its partners have been able to secure the bulk of the Medicaid business in Denver, and Denver Health has local financial support for the uncompensated care load that completes its safety net function. In contrast, respondents suggested that private hospitals in Houston were will- ing to support HCHD politically and financially only to the level necessary to ensure its survival and so avoid an influx of demand from the uninsured. The prominent medical centers in Houston have considerable political clout and, because HCHD is subject to local political control, they can effectively control the system’s competitive capacity. HCHD’s position within the Houston health care sector is, thus, much weaker than is Denver Health’s within the Denver health care sector. The situation in Los Angeles is somewhat different. The academic medical centers are the core of the LACDHS system. As participants in the public system, they do not compete against it. However, they are not dominant enough to deflect other competition. As a result, Medicaid managed care has hit the system hard. Local support, both financial and political, for the system is good, but the larger health care sector neither supports the system (as seen in Denver) nor threatens to undermine it (as in Houston). Los Angeles is a large market and LACDHS is just one of many

players. 26 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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without closing their emergency departments, they are unable to limit access. Den- access. limit to unable are they departments, emergency their closing without

to federal and local regulations that limit their ability to turn away patients so that, so patients away turn to ability their limit that regulations local and federal to

ing eligibility standards or the number of ambulatory care sites. Hospitals are subject are Hospitals sites. care ambulatory of number the or standards eligibility ing

Public systems can effectively control demand for ambulatory services by adjust- by services ambulatory for demand control effectively can systems Public

hand in hand. hand. in hand

ambulatory care sector. In HCHD’s situation, financial security and flexibility go flexibility and security financial situation, HCHD’s In sector. care ambulatory

admissions, HCHD has not been able to shift its emphasis and investment to the to investment and emphasis its shift to able been not has HCHD admissions,

years and its resulting inability to forgo revenues available as a function of inpatient of function a as available revenues forgo to inability resulting its and years

ambulatory care in the future. Because of its precarious financial position in recent in position financial precarious its of Because future. the in care ambulatory

respondents did not foresee greater proportions of the budget being devoted to devoted being budget the of proportions greater foresee not did respondents

its ambulatory care focus once federal funding is withdrawn. In the HCHD system, HCHD the In withdrawn. is funding federal once focus care ambulatory its

hospital system envisioned under the waiver program that would allow it to sustain to it allow would that program waiver the under envisioned system hospital

ambulatory care. It has not, however, been successful in making the changes in its in changes the making in successful been however, not, has It care. ambulatory

ity under its waiver program and has also been able to devote greater resources to resources greater devote to able been also has and program waiver its under ity

to use that flexibility to support ambulatory care. LACDHS gained a similar flexibil- similar a gained LACDHS care. ambulatory support to flexibility that use to

of its independence from local government. Significantly, Denver Health has chosen has Health Denver Significantly, government. local from independence its of

financing than does HCHD, both because of the source of the financing and because and financing the of source the of because both HCHD, does than financing

Denver Health also enjoys more secure funding and greater flexibility in its in flexibility greater and funding secure more enjoys also Health Denver

ently in the ambulatory care sector. care ambulatory the in ently

eral funds. The effect of the size of the uninsured population also plays out differ- out plays also population uninsured the of size the of effect The funds. eral

latory care because it generally comes with fewer restrictions on its use than do fed- do than use its on restrictions fewer with comes generally it because care latory

nants of safety net hospital success. Local funding is particularly important for ambu- for important particularly is funding Local success. hospital net safety of nants

financial support and the size of the uninsured population were important determi- important were population uninsured the of size the and support financial

The companion study of hospitals in the study communities found that local that found communities study the in hospitals of study companion The

has it threatened to close them. them. close to threatened it has

in the last few years has given it little opportunity to invest in its clinics, but neither but clinics, its in invest to opportunity little it given has years few last the in

however, makes clinic closures seem less likely. HCHD’s insecure financial position financial insecure HCHD’s likely. less seem closures clinic makes however,

respond in a similar fashion. Denver Health’s ongoing investment in its clinic system, clinic its in investment ongoing Health’s Denver fashion. similar a in respond

to deal with an equally serious financial threat, it is not certain that they would not would they that certain not is it threat, financial serious equally an with deal to

response included closing clinics. While neither HCHD nor Denver Health have had have Health Denver nor HCHD neither While clinics. closing included response

than those of the hospitals. During its 1995 financial crisis, LACDHS’s proposed LACDHS’s crisis, financial 1995 its During hospitals. the of those than

in Denver, noted that the physician staffs of the clinics were accorded less respect less accorded were clinics the of staffs physician the that noted Denver, in

in other ways. Respondents in both Houston and Los Angeles, in contrast to those to contrast in Angeles, Los and Houston both in Respondents ways. other in

Denver Health has also demonstrated its fuller commitment to ambulatory care ambulatory to commitment fuller its demonstrated also has Health Denver

hierarchy despite LACDHS’s official policy of enhancing access to ambulatory care. care. ambulatory to access enhancing of policy official LACDHS’s despite hierarchy

ambulatory care that HCHD has not made and that is ambiguous in the LACDHS the in ambiguous is that and made not has HCHD that care ambulatory

management structure, Denver Health has made an organizational commitment to commitment organizational an made has Health Denver structure, management

than that of either HCHD or LACDHS. By including ambulatory care in the upper the in care ambulatory including By LACDHS. or HCHD either of that than

within the larger system, Denver Health’s ambulatory care safety net is more secure more is net safety care ambulatory Health’s Denver system, larger the within

ter local political support than those in Los Angeles and Houston. Furthermore, Houston. and Angeles Los in those than support political local ter

that system. The public safety net in Denver is relatively better financed and has bet- has and financed better relatively is Denver in net safety public The system. that

the larger safety net and the relative position of the ambulatory care service within service care ambulatory the of position relative the and net safety larger the

The stability of the ambulatory care safety net appears to depend on the strength of strength the on depend to appears net safety care ambulatory the of stability The Overall Stability of the Systems the of Stability Overall ver Health’s ability to limit its service area and control the size of its eligible population contributes significantly to the relatively smooth functioning of its system. It benefits from the fact that its county boundaries exclude its suburbs and so it has a geographically delimited service area. In contrast, Los Angeles County encompasses both city and suburbs, giving LACDHS a large service area with a diverse population. LACDHS’s decision to offer broad access to its services has led to growing demand for its services, and whether LACDHS will be able to sustain this policy remains an open question. Harris County also represents a large service area, and HCHD has tried to limit demand for its services primarily through its policy on serving the undocumented. However, because the larger system remains responsible for these patients, the cost savings have been elusive. All three systems have been deeply affected by the coming of managed care to Medicaid. The ability of the safety net to adjust to the changing health care marketplace is one indicator of its long-term stability. This ability is also, however, a reflec- tion of the strength of the components of the safety net—ambulatory care, public health, specialty care, and inpatient care—and of their ability to communicate and coordinate with each other. Denver Health respondents noted that managing care makes sense whatever reimbursement system is in place. Its strong network and the agility afforded it by its independence from local government allowed Denver Health to capitalize on its historical position as provider for the Medicaid population. Cost-based reimbursement for safety net ambulatory care providers under Colorado’s Medicaid managed care program contributed to Denver Health’s ability to maintain its position. Denver Health’s decision to obtain FQHC status for its clinics has allowed it to take advantage of this preferential reimbursement. LACDHS and HCHD have not taken this step. The major source of Denver Health’s success in managed care, however, is its integrated network with linkages among the various sites of care. Its investment in information technology to streamline those connections has enhanced its ability both to manage care and to claim reimbursement. As noted in Brennan et al. (forthcoming), Medicaid managed care presented the safety net systems with both problems and opportunities. While not immune to the problems, the strength of Denver Health’s ambulatory care network has allowed it to make the most of the opportunity. The reorganization that LACDHS is undertaking as part of its waiver program is moving in a direction similar to that of Denver Health. Because LACDHS reacted slowly in a highly competitive, Medicaid managed care arena, however, it may not achieve the same measure of success. Nevertheless, the reorganization will result in a stronger system if it can be sustained once federal funding is withdrawn, leaving it better positioned for future developments in the health care marketplace. HCHD, on the other hand, faces governance, financing, and staffing issues that will need to be

resolved if it is to respond successfully to changes in the broader health care sector. 28 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY SYSTEM AND FINANCING, STRUCTURE, POOR: URBAN THE FOR CARE AMBULATORY

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and long-term institutional survival. survival. institutional long-term and

the safety net is then the result of decisions based on the interests of both patient care patient both of interests the on based decisions of result the then is net safety the

to be key to a successful public safety net. A strong ambulatory care system within system care ambulatory strong A net. safety public successful a to key be to

with the mission of public service under the constraints of public financing appears financing public of constraints the under service public of mission the with

which financial and organizational flexibility and managerial agility can be combined be can agility managerial and flexibility organizational and financial which

A successful safety net system mirrors a successful private system. The degree to degree The system. private successful a mirrors system net safety successful A

tions, but provide few answers. few provide but tions,

financial support? The problems faced by LACDHS and HCHD suggest these ques- these suggest HCHD and LACDHS by faced problems The support? financial

Might changes in the local political landscape lead to a reduction in its critical local critical its in reduction a to lead landscape political local the in changes Might

expanding its service area lead to an unsustainable level of demand for its services? its for demand of level unsustainable an to lead area service its expanding

Denver Health maintain its level of accomplishment if its leadership changed? Would changed? leadership its if accomplishment of level its maintain Health Denver

long-term stability of the ambulatory care safety net in these communities. Could communities. these in net safety care ambulatory the of stability long-term

as to which component or combination of components is critical to the success and success the to critical is components of combination or component which to as

Given the varying degree of success seen in the three systems, the question arises question the systems, three the in seen success of degree varying the Given

population. Los Angeles has some of these assets; Houston has fewer. fewer. has Houston assets; these of some has Angeles Los population.

used these assets to put together a successful integrated system to serve a defined a serve to system integrated successful a together put to assets these used

ambulatory care is equal to that of other Denver Health services. Denver Health has Health Denver services. Health Denver other of that to equal is care ambulatory

as an equal player in a highly competitive market; within the system, the status of status the system, the within market; competitive highly a in player equal an as

enjoys substantial local political support and independence. As a system, it operates it system, a As independence. and support political local substantial enjoys

In summary, Denver Health is currently well funded, well organized, and well led. It led. well and organized, well funded, well currently is Health Denver summary, In Conclusion

Appendix—List of People Interviewed

HOUSTON, TEXAS

Harris County Hospital District Bill Adams, Interim Chief Executive Officer Alicia Reyes, Senior Vice President, Community Health Program Ora Roberts, Director, Settegast Health Center

Harris County Health Department Thomas Hyslop, M.D., Director Binh Nguyen, Health Services Areas Administrator Carol Pierson, Health Service Area Manager, Southeast Health Center

City Health Department Marty Engel, Assistant Director, Community and Personal Health Services Judy Harris, Clinic Operations Donna Travis, Riverside Clinic Antonia Stewart, Casa de Amigos, Northside Hazel Thorpe, Lowndes Clinic Deborah Duncan, Sunnyside Clinic Michael Robertson, Westwood Clinic Leo Venegas, Magnolia Clinic

Harris County Administration Rebecca Rentz, Policy Director, Health and Environment

Casa Juan Diego and Casa Maria Clinics Mark and Louise Zwick, Directors

San Jose Clinic Gilda Taylor, Interim Executive Director Policy Experts Charles Begley, Professor, University of Texas, School of Public Health Cliff Dasco, M.D., Vice Chair for Clinical Affairs, Department of Internal Medicine, Baylor College of Medicine Hardy Loe, Associate Dean and Associate Professor, University of Texas School of Public Health Julie Ann Sakowski, Professor, Texas Women’s University

Advocates Barbara Lashley, Director of Advocacy, Christ of Good Shepherd Church Pat Macy and Cathy Doran, Department of Social Ministry, Christ of Good Shepherd Church Gail Bray and Karen Williams, Episcopal Health Charities Melba Johnson, Chairperson, Council at Large (Consumers) for HCHD Community Clinics Sheila Savannah, People in Partnership

DENVER, COLORADO

Denver Health Patricia Gabow, M.D., Chief Executive Officer and Medical Director Richard Wright, M.D., Executive Director, Community Health Services Michael Earnest, M.D., Vice President, Quality Improvement Sheri Eisert, Director of Health Services Research Frederick Morefield, Information Systems Douglas Clinkscales, Chief Executive Officer, Denver Health Medical Plan

University Hospital Dennis Brimhall, Chief Executive Officer

Inner City Health Center Kraig Burleson, Business Manager

Clinica Campesina Peter Leibig, Director

Metropolitan Denver Community Provider Network Dave Meyers, Director

Salud Family Health Center

Stanley “Jerry” Brasher, Executive Director 32 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY Mary Ann Martinez-Gofigan, Director of Client Services John Santistevan, Director of Accounting and Finance

Colorado Access Don Hall, President and Chief Executive Officer Sherry Rohfling, Vice President of Market Development

Colorado Community Health Network Annette Kowal, Executive Director

Advocates Gary Van Der Arck, M.D., and Chet Seward, Coalition for the Medically Underserved

LOS ANGELES, CALIFORNIA

Los Angeles County Department of Health Services Mark Finucane, Director Maria Elena Sanchez, Director of Ambulatory Care Renee Santiago, Director, Medicaid Demonstration Project Office Jonathan Fielding, M.D., Director of Public Health Roberto Rodriguez, Executive Director, LAC+USC Medical Center Zina Glodney, Chief Information Officer Kathy Shibata, Information Technology Gary Wells, Director of Finance Jeff Guterman, M.D., Associate Medical Director, Olive View Medical Center Carolyn Clark, Director, H. Claude Hudson Community Health Center Edna Briggs, Associate Director, H. Claude Hudson Community Health Center

Community Health Foundation of East Los Angeles Rudy Diaz, Executive Director

Hollywood Sunset Free Clinic Teresa Padua, Executive Director Terry Sanders, Physician Assistant Celia Garza, Medical Technician Virginia Halstead, Clinic Administrator

T.H.E. Clinic Sylvia Drew Ivie, Executive Director

Community Clinic Association of Los Angeles County Mandy Johnson, Executive Director

THE URBAN

INSTITUTE AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY 33 L

Notes

1. The other Assessing the New Federalism (ANF) states are Alabama, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Washington, and Wisconsin. For more information on the Assessing the New Federalism project, see Kondratas, Weil, and Goldstein (1998). Reports produced under the project and a public use data file from the household survey are available on the ANF Web site at http://newfederalism.urban.org.

2. For more information on the health care system in Houston, see Wiener et al. (1997), Meyer et al. (1999), and Norton and Lipson (1998).

3. Zuckerman et al. (1999).

4. Gold Card eligibility is currently set at 200 percent of the federal poverty level (FPL). Applicants must show proof of county residency.

5. The Emergency Medical Treatment and Active Labor Act (EMTALA) requires that all hospitals that participate in the Medicare program, which includes almost all hospitals, provide an appropriate medical screening exam to anyone coming to the emergency department seeking medical care and treat and stabilize any emergency medical condition.

6. The percentage of the budget derived from taxes rose in 1999 and was projected to rise again in 2000.

7. The Disproportionate Share Hospital (DSH) program is funded through Medicaid and provides additional funds to hospitals that serve a disproportionate share of Medicaid and uninsured patients. The allocation of DSH funds is, within certain guidelines, a state prerogative.

8. Federally Qualified Health Centers are community clinics that meet specific service and governance criteria and receive federal grant funding from the Bureau of Primary Health Care under Section 330 of the Public Health Service Act. They provide primary and preventive health care services in medically underserved areas.

9. Property values have risen in recent years, a fact that county officials asserted offsets the lower rates to some degree.

10. At the time of our visit, consideration was being given to raising property tax rates to a level that was expected to bring HCHD funding from this source back to nearly the level it had enjoyed before the cuts. Although the actual rate would be lower than before, property values were said to have risen sufficiently to make up the difference (AHL 1999). Furthermore, a change in the way that services for prisoners were financed would mean that HCHD’s expenses would be lower.

11. For more information on the health care system in Denver, see Moon et al. (1998) and Norton and Lipson (1998).

12. For more information on Denver Health, see Gabow (1997).

13. For more information on the health care system in Los Angeles, see Zuckerman et al. (1998).

14. Private physician groups may also participate as private partners. 15. Under colocation, both a private and a public clinic provide services from a public Health Center site.

16. See Zuckerman et al. (1998) for a discussion of realignment.

17. Calculations based on data from the Department Operating Budget, FY 97/98 Medicaid Demon- stration Project Annual Report.

18. The state has a supplemental DSH-like program, commonly referred to as the “1255” program. LACDHS revenues from this program have grown substantially over the last five years, nearly match- ing the decline in federal DSH funds.

19. See, for example, Lewin and Altman (2000).

20. Since our site visit, a new system CEO has been named and change has begun. 36 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY References

American Health Line (AHL). 1999. “Texas: Harris County Hospitals May See 28% Budget Boost,” January 29.

———. 2000. “Immigrants: Houston Hospital Works to Improve Access,” December 6.

Brennan, Niall, Stuart Guterman, and Stephen Zuckerman. Forthcoming. How Are Safety Net Hospi- tals Responding to Health Care Financing Changes? Washington, D.C.: The Urban Institute. Assessing the New Federalism Occasional Paper.

Colorado Community Health Network (CCHN). 1998. Statewide Marketplace Analysis 1995–1997. Denver: Colorado Primary Care Association.

Draper, Debra, and Marsha Gold. 2000. “Customizing Medicaid Managed Care—California Style.” Health Affairs 19(5): 233–38.

Employee Benefits Research Institute (EBRI). 1998. “Sources of Health Insurance and Characteristics of the Uninsured” (tabulations of data from the March 1995, March 1996, and March 1997 Current Population Surveys). http://www.ebri.orgfacts/0998fact5.htm and http://www. ebri.orgfacts/0098fact4.htm. (Accessed February 7, 2001.)

Gabow, Patricia A. 1997. “Denver Health: Initiatives for Survival.” Health Affairs 16(4): 24–26.

Gray, Bradford H., and Catherine Rowe. 2000. “Safety Net Health Plans: A Status Report.” Health Affairs 19(1): 185–93.

Kondratas, Anna, Alan Weil, and Naomi Goldstein. 1998. “Assessing the New Federalism: An Intro- duction.” Health Affairs 17(3): 17–24.

L.A. Health. 1998. “Over 2.7 Million Uninsured in Los Angeles, Including 2 Million Adults.” http://phps.dhs.co.la.ca.us/ha/reports/habriefs/vol1n1/v1n1.htm. (Accessed January 28, 2000.)

Lewin, Marion Ein, and Stuart Altman, eds. 2000. America’s Health Care Safety Net: Intact but Endan- gered. Washington, D.C.: National Academy Press, Institute of Medicine, Committee on the Changing Market, Managed Care, and the Future Viability of Safety Net Providers.

Long, Sharon, Stephen Zuckerman, Suresh Rangarajan, and Alicia Berkowitz. 1999. “A Case Study of the Medicaid Demonstration Project for Los Angeles County.” Final report to the Health Care Financing Administration, April 21.

Los Angeles County Department of Health Services (LACDHS). 2000. “Los Angeles County 1115 Waiver Medicaid Demonstration Project Extension.” http://lapublichealth.org/waiver/ pubs/agreement.htm. (Accessed February 20, 2001.)

Meyer, Jack A., Mark W. Legnini, Emily K. Fatula, and Larry S. Stepnick. 1999. The Role of Local Gov- ernments in Financing Safety Net Hospitals: Houston, Oakland, and Miami. Washington, D.C.: The Urban Institute. Assessing the New Federalism Occasional Paper No. 25.

Moon, Marilyn, Len Nichols, Stephen Norton, Barbara A. Ormond, Susan Wallin, Jean Hanson, and Laurie Pounder. 1998. Health Policy for Low-Income People in Colorado. Washington, D.C.: The Urban Institute. Assessing the New Federalism State Reports. Moore, J. Duncan. 1997. “Denver Role Model: City Turns Public Hospital into Integrated System.” Modern Healthcare, April 14.

Morefield, Fred. 1999. “Information Systems at Denver Health.” Presentation at Denver Health Board Retreat, November 30.

Norton, Stephen A., and Debra J. Lipson. 1998. “Public Policy, Market Forces, and the Viability of Safety Net Providers.” Washington, D.C.: The Urban Institute. Assessing the New Federalism Occasional Paper No. 13.

Pollock, Ralph. 1996. Rocky Mountain Health Care Observer, June 5.

Riccardi, Nicholas. 2000. “U.S. to Extend Waiver on L.A. County Health Funds.” Los Angeles Times, June 28.

Rutledge, Tanya. 2000. “Hospital District Slashes HMO to Focus on Medicaid Business.” Houston Business Journal, July 10.

Sparer, Michael S., and Lawrence D. Brown. 2000. “Uneasy Alliances: Managed Care Plans Formed by Safety-Net Providers.” Health Affairs 19(4): 23–35.

Wiener, Joshua M., Alison Evans, Crystal Kuntz, and Margaret Sulvetta. 1997. Health Policy for Low- Income People in Texas. Washington, D.C.: The Urban Institute. Assessing the New Federalism State Reports.

Zuckerman, Stephen, Niall Brennan, John Holahan, Genevieve Kenney, and Shruti Rajan. 1999. Snap- shots of America’s Families: Variations in Health Care across States. Washington, D.C.: The Urban Institute. Assessing the New Federalism Discussion Paper 99-18.

Zuckerman, Stephen, Teresa Coughlin, Len Nichols, David Liska, Barbara Ormond, Alicia Berkowitz, and Meghan Dunleavy. 1998. Health Policy for Low-Income People in California. Washington,

D.C.: The Urban Institute. Assessing the New Federalism State Reports. 38 L AMBULATORY CARE FOR THE URBAN POOR: STRUCTURE, FINANCING, AND SYSTEM STABILITY About the Authors

Barbara A. Ormond is a research associate in the Health Policy Center of the Urban Institute. Her work there has focused on the impact of health system change on uninsured and publicly insured populations. In addition, she has studied the rural health care safety net, Medicaid managed care, and children’s access to dental care. Prior to coming to the Urban Institute, she conducted research on hospital provision of uncompensated care in the United States and on the demand for curative care in rural Indonesia. She also spent several years working at the U.S. Agency for Inter- national Development, with a focus on population, environment, and rural health systems. Amy Westpfahl Lutzky is a research associate with the Urban Institute’s Health Policy Center, where her work currently focuses on issues surrounding the implementation of the State Children’s Health Insurance Program (SCHIP). Ms. Lutzky has also studied the financing and organization of safety net ambulatory care systems, Medicaid DSH funding, and health care developments in California and New York as part of the Institute’s Assessing the New Federalism Project. Before joining the Urban Institute, Ms. Lutzky served as an analyst for The Lewin Group.

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