THE COMMONWEALTH FUND Sustaining Safety Net Hospitals Pamela Riley, M.D., M.P.H. Program Officer, Vulnerable Populations The Commonwealth Fund Alliance for Health Reform Briefing Washington, D.C. June 4, 2012 What is the Health Care Safety Net? • Health care providers that organize and deliver a significant level of health care and other healthrelated services to uninsured, Medicaid, and other vulnerable patients (Institute of Medicine). • Core safety net providers are required by organizational mission or legal mandate to provide care to patients regardless of ability to pay. • Includes hospitals (public; non-profit; academic medical centers), community health centers, local health departments. Institute of Medicine. America’s Health Care Safety Net: Intact but Endangered. Washington: National Academies Press, 2000. What is the Role of Safety Net Hospitals? • Provide inpatient, primary and subspecialty care for Medicaid, low-income, and uninsured populations. • Provide other specialized services (trauma centers, burn units, inpatient psychiatric care). • Serve as sites for training physicians and other health professionals. • Serve as economic engines of communities— safety net hospitals contributed over $120 billion in 2009 to state economies, and to over 800,000 jobs nationally. Source: National Association of Public Hospitals and Health Systems. Safety Net Health Systems: Keeping Americans Healthy and Working, October 2011. What Populations do Safety Net Hospitals Serve? Discharges at NAPH Member Hospitals and Health Systems, by Payer Source, 2009 Nationwide Estimates of Hospital Discharges, by Payer Source, 2010 Other 3% Source: NAPH Hospital Characteristics Survey, 2009 Source: HCUP Nationwide Inpatient Sample (NIS), 2010, Agency for Healthcare Research and Quality (AHRQ) Disproportionate Needs of Patients Served by Safety Net Hospitals and System Characteristics to Address Needs Disproportionate Needs Safety-Net System Characteristics Health-related needs Chronic conditions Disability Mental illness Substance abuse Reproductive health care Personal and social factors adversely affecting health Dangerous work Unhealthy environments Unsafe environments Chronic stress Shortage of personal time Illiteracy Low social support Homelessness Poor nutrition Health risk behaviors (smoking, substance abuse, inactivity) Disability No sick leave Language barriers Cultural disparities Transportation Nontraditional work hours Transient residence Disability Team care Care management Care coordination/Integration Medical home Co-located services Integrated services Social services Patient education Outreach services Facilitated enrollment in public programs Wraparound services Personal and social factors affecting health care access Extended hours of service Language services Transportation services Cultural sensitivity Electronic heath records Home visits Home health care Telephone advice lines Electronic visits Source: E. L. Schor, J. Berenson, A. Shih, S. R. Collins, C. Schoen, P. Riley, and C. Dermody, Ensuring Equity: A Post-Reform Framework to Achieve High Performance Health Care for Vulnerable Populations, The Commonwealth Fund, October 2011. What is the Impact of the Affordable Care Act on Safety Net Hospitals and the Populations they Serve? • Potential for increased Medicaid revenues—an estimated 16 million people will acquire Medicaid under ACA. • Cuts in disproportionate share hospital (DSH) payments, which help cover costs of caring for Medicaid and uninsured patients. – Safety net hospitals have higher average uncompensated care costs as a share of total costs (16%, compared to 6% nationally) • An estimated 26 million people under age 65 will remain uninsured after full implementation of the ACA—safety net hospitals will still be needed to care for this population. Source: Congressional Budget Office, CBO and JCT’s Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance, March 2012; National Association of Public Hospitals and Health Systems. America’s Public Hospitals and Health Systems, 2009: Results of the Annual NAPH Hospital Characteristics Survey, December 2010. Today’s Panelists Deborah Bachrach, J.D. Special Counsel, Healthcare Transaction and Policy, Manatt, Phelps & Phillips, LLP, New York, NY Billy Millwee, M.Sc., M.A. Texas Medicaid Director, Austin, TX Arthur Gianelli, M.B.A., M.P.H. President and Chief Executive Officer, Nassau Health Care Corporation, East Meadow, NY Patrick Conway, M.D., M.Sc. Chief Medical Officer, Centers for Medicare and Medicaid Services, Baltimore, MD Key Questions • Regarding Medicaid and DSH payment policies, what are potential federal policy options to better target existing funds to hospitals serving low-income, high-need patients? • What is currently being done to address the current financial challenges facing safety net hospitals, and to prepare safety net hospitals for funding changes under the ACA? • How can ACA provisions affecting safety net hospital financing be implemented to maintain the financial stability of safety net hospitals while promoting highquality, efficient care?