Copyright 2000 Federal News Service, Inc.
Federal News Service
March 23, 2000, Thursday
SECTION: PREPARED TESTIMONY
LENGTH: 5590 words
HEADLINE:
PREPARED TESTIMONY OF BERNARD SIMMONS EXECUTIVE DIRECTOR SOUTHWEST HEALTH AGENCY
FOR RURAL PEOPLE TYLERTOWN, MISSISSIPPI ON BEHALF OF THE NATIONAL ASSOCIATION OF
COMMUNITY HEALTH CENTERS
BEFORE THE SENATE
HEALTH, EDUCATION, LABOR AND PENSIONS COMMITTEE SUBCOMMITTEE ON PUBLIC HEALTH
SUBJECT - SAFETY NET PROVIDERS
BODY:
Mr. Chairman and Members of the Subcommittee, my name is Bernard
Simmons. I am the Executive Director of the Southwest Health Agency for Rural
People, or SHARP, located in Tylertown, in the heart of southwestern
Mississippi. I appreciate this opportunity to speak with you today, on behalf of
the National Association of Community Health Centers, about the work of health
centers and other safety net providers in caring for uninsured and underserved
people in our rapidly changing health care system.
My testimony today
will focus on three areas: 1. Health centers are doing the job expected of them
by this Subcommittee and the Congress providing quality health services at low
cost for millions of low-income Americans.
2. While every American and
every health provider have been affected in some way by the dramatic and
far-reaching Changes that have swept across our health care system, few have
been as profoundly affected as health centers and their fellow safety net
providers, even as they actively participate in mainstream managed care
arrangements.
3. Health centers need the continued support of this
Subcommittee, and indeed of the entire Congress, in order to continue fulfilling
their public policy mission and purpose.
Health Centers Are High
Quality, Low Cost, Efficient Providers
A Background on Health Centers
Health centers today represent more than 35 years of federal, state, and
local community investment in primary care infrastructure for medically
underserved people and communities. Most community, migrant, homeless and public
housing health centers receive grants under section 330 of the Public Health
Service (PHS) Act, which is authorized by this Committee. Other community-based
health centers are designated as Federally qualified health centers (FQHCs)
under the Medicare and Medicaid laws because they meet all the requirements
applicable to health centers that receive Federal grant assistance, but
sufficient grant funds are not available to provide them with Federal support.
Health centers bring health care providers, services, and facilities to
people living in low-income and medically underserved urban and rural
communities with few or no other health care resources. The underlying goal of
the federal health centers program -- as authorized under section 330 of the PHS
Act by this Committee -- has been to help communities and their people to take
responsibility for their health. Toward that end, the program has facilitated
the flow of public and private resources, enabling the communities themselves to
establish and operate health centers and to develop innovative efforts to meet
the health needs of individuals in the communities they serve. Health centers
have improved access to care and have reduced health care costs, while
sustaining and enhancing the quality of care provided.
Health centers
are, by law, located exclusively in rural and inner city communities that have
been designated as medically underserved, because they have far too few primary
care providers and poor health status indicators. Health centers must make their
services available to all residents of their service area, within the limits of
their resources.
A distinctive feature of health centers is that they
are developed and run by people within their communities, and are staffed and
managed by individuals who understand the needs of the people in their
communities. Health center governing boards are composed of active registered
patients and local community leaders, such as business owners, educators and
residents who are committed to provide .access to primary health care which
meets the needs of their community. They are working together to make a
difference.
Each local health center is unique in terms of the range of
services it offers and its hours of operation, reflecting local decisions on how
best to meet their patients' health care needs. At the same time, all of the
health centers are subject to ongoing Federal monitoring of their
cost-effectiveness, quality of care, and management at a level which is more
stringent than that applied to any other provider. They are regulated by the
Health Resources and Services Administration (HRSA) under the PHS Act grant
program, and by the Health Care Financing Administration (HCFA) under the
Medicare and Medicaid programs.
Health Centers Provide Services to Those
Who Lack a Regular Source of Care
Health centers serve medically
underserved Americans. In simplest terms, the medically underserved are people
who cannot get care when they need it, and when it is most appropriate to
prevent the onset of a health problem or illness, or to diagnose and treat a
condition in its earliest stages. The medically underserved span all ages and
live in all communities, and include residents of rural areas and inner cities,
the uninsured, low-income children, agricultural farmworkers, homeless
individuals, persons with physical and mental disabilities, and persons with HIV
and other communicable diseases. Last year, more than 1000 health centers served
more than 11 million children and adults in 3200 communities across the country.
More than 9 million people obtain care from health centers that receive funding
from the federal health centers grant program, while another 2 million people
receive care from designated FQHCs that do not receive grant funds.
Health center patients include: 4.5 million uninsured persons, 1 of
every 10 uninsured Americans; 4.5 million children, 1 of every 6 low-income
American children, including 1 of every 5 low-income uninsured children (1.6
million); 4 million children and adults with Medicaid or CHIP coverage, 1 of
every 9 Medicaid/CHIP recipients;
- More than 7 million people of color;
and 5.6 million residents of rural communities, 1 of every 12 rural Americans.
Health centers also serve more than 600,000 agricultural farm workers
and 500,000 homeless persons.
Because of factors such as poverty or
homelessness, and other problems which permeate underserved communities, health
center patients are at higher risk for serious and costly conditions (such as
diabetes, hypertension, asthma, or high risk pregnancies) than the general
population, and require unique health services not typically offered by
traditional providers.
My colleague, Robert Taube of Boston's Health
Care for the Homeless Health Center, will speak more specifically to this key
point as it applies to individuals who are homeless; and I would add that the
same is true for other populations served by health centers, such as
farmworkers.
Health center patients are predominantly members of low
income working families, most of who have little else in the way of available
health care. Their care is financed by a variety of sources. The federal health
center grants provide, on average, less than 28 percent of a health center's
budget. Medicaid and CHIP payments account for about 34% percent, on average, of
a health center's budget. State and local government support, and private
donations, provide 16 percent of health center revenues nationally, while 8
percent comes from private insurance, and 7 percent from Medicare. Every health
center patient contributes to the cost of his or her care, and on average, 7
percent of income comes from patient fees. These averages will vary for each
health center, depending on the financing sources available to people in the
local community.
Health Centers Provide Care that is Appropriate for the
Underserved
Health centers are community owned and operated businesses
-- professional health care organizations providing a comprehensive range of
high quality preventive and primary health care under one roof, in a "one stop
shopping" system. We offer 24 hour care, both for prevention and for treatment
of illness or injury, and in addition provide diagnostic laboratory and x-ray
services, as well as prescribed medications in many cases. Health center
clinicians make referrals to specialists and admit and follow their patients in
the hospital, when necessary. Health centers provide continuous care to their
patients, regardless of changes in their insurance coverage or health status.
For the medically underserved, however, access to care often includes
other factors in additional to the ability to visit a physician's office.
Studies show that the underserved are less likely to seek or use health care
services, even when they appear to be available, and are more likely to seek
primary care services at inappropriate settings, such as the hospital emergency
room. Health centers work hard to counter this tendency.
Health centers
provide a variety of additional services to make their care more accessible for
the underserved. Outreach services provide individuals and communities with
information on the availability of appropriate services and how to obtain them,
and encourage their use. Health centers address geographic inaccessibility, such
as barriers of time and distance and the lack of available and affordable public
or other transportation by providing transportation services to enable patients
to keep their appointments, both at the health center, and with specialists and
hospitals.
Health centers often organize the provision of services to
provide access to care at times, and in.locations, that take into account the
needs of medically underserved populations. For example, health centers provide
labor camp or worksite based services for agricultural farmworkers during
evening or late night hours. For homeless persons, health centers provide
services in homeless shelters or mobile clinics in vans at street comer
locations.
Many of the medically underserved come from different
cultures and have primary fluency in languages other than English. Health
centers provide translators, often in several languages, to enable providers to
reach a critical understanding of significant cultural perceptions and their
effect of health care practices of individuals from other cultures.
Health centers are cost-effective and efficient
Health centers
are one of the best health care and taxpayer bargains anywhere. The combination
of locally responsive health care delivery and consistent federal oversight has
proved to be a winning formula. Health centers provide comprehensive services to
their patients at an astonishingly low cost. The average total cost of health
center services amounts to less than $350 annually -- less than
$1 a day -- for each person served.
Dozens of studies
and reports show that health centers substantially improve the health of
individuals in their communities and provide care in a highly cost-effective
manner. The impacts health centers have had on the health of individuals in
their communities include lower hospital admission rates, shorter lengths of
stay and less inappropriate use of emergency room services, significantly lower
infant mortality rates and reduced incidence of low birth weight, higher
childhood immunization rates, and better use of preventive health services (like
Pap smears, mammography, and glaucoma screening), resulting in lower rates of
preventable illnesses.
Several studies over the last decade have found
that Medicaid patients who regularly use health centers receive care of equal or
greater quality and cost significantly less than those who use private primary
care providers, such as HMOs, hospital outpatient units or private physicians.
For instance: - In California, health center patients were 33% less expensive
overall (controlling for maternity services), and had 27% less total hospital
costs. (Center for Health Policy Studies, 1993) In Maryland, health center
patients had lowest total payments; lowest ambulatory visit cost; lowest
incidence of inpatient days; and lowest inpatient day cost. (Johns Hopkins Univ
School of Public Health and Hygiene, 1993) In New York, health center patients
were 22-30% less expensive overall, and had 41% lower total inpatient costs.
Diabetics and asthmatics who were regular health center users had between 44%
and 62% lower inpatient costs (Center for Health Policy Studies, 1994) And two
separate system-wide studies of thousands of Medicaid patient medical records in
Maryland found that:
Health centers consistently scored at or near the
highest in 21 separate measures of quality assessment, even though their costs
of care were among the lowest of the various provider types reviewed; and Health
centers scored highest among all providers for the proportion of their pediatric
patients who had received preventive services, including immunizations(JAMA,
1994; and Public Health Management Practice, 1995)
These findings are
consistent with those from dozens of previous studies on the cost-effectiveness
and quality of care provided through the health center model, and in particular
documenting their substantial savings to state Medicaid programs. The record is
clear that health centers provide quality, comprehensive primary care to some of
the hardest-to-reach patients in the health system at a price second to none.
Health Centers Want to Continue to Serve
Thousands of
communities across the country today experience continuing acute shortages of
cost-effective preventive and primary health care service locations. At the same
time, private market and public efforts to control costs are making it
increasingly difficult for other providers to continue offering care to those
without coverage. In this light, the health center program is today more
critical than ever to the success of the American health care system, because
they are the best and most affordable and cost-effective way to get quality
health care to those who need it most. At the same time, however, the 4.5
million uninsured people whom health centers are able to reach account for only
10 percent of the nation's uninsured, and less than one-fourth of the 20 million
uninsured Americans who otherwise would have no regular source of care.
Congress gave us a mission to expand access to health care for Americans
in medically underserved areas. Yesterday, the primary challenges that faced us
were untreated childhood illnesses such as inner ear infections and strep throat
and adult illnesses such as diabetes and hypertension. Today, we are meeting the
growing demand of individuals in local communities for care for acute and
chronic illnesses, maternity services, and, in addition, care for re-emergent
tuberculosis and other contagious diseases, community and family violence and
associated trauma, HIV infection, teen pregnancy, and alcohol and substance
additions. We are ready to continue our partnership with you in responding to
the needs of those residing in the urban and rural communities we serve.
Health Centers and the Changing Health Care System
America's
healthcare system is in the midst of sweeping change, largely market-driven and
focused principally on containing and reducing the cost of care. The hallmarks
of this change over the past several years have been the greatly increased use
of managed care -- both for commercially-insured individuals and for those
covered by Medicaid and other public programs -and intensified competition among
providers, leading to at least temporarily lower costs as managed care plans
demand substantial discounts on payments for their enrolled populations and
providers accept the lower payments in order to remain viable. The vast majority
of health care providers -- including all health centers -- are fully
participating in managed care systems, and thus -- like the 150 million
Americans who are enrolled in those systems -- are directly affected by the
changes. However, unlike most other health care providers, health centers and
their fellow safety net providers (those providers legally obligated to provide
care to persons who cannot afford to pay, such as public hospitals and local
public health agencies) have also been severely affected by other trends that
most other providers have been able to avoid. These include: The rapidly
escalating number of individuals who are uninsured. As of late 1998, more than
44 million people were uninsured, nearly one of every 5 non-elderly Americans.
Sixty percent of all uninsured Americans are members of low-income families.
Despite the current economic boom and record unemployment rates, the number of
uninsured people has grown by more than 5 million over the last 5 years, and
experts project that the number will reach 60 million over the next decade if
nothing is done, even if the economy remains exceptionally healthy. More than 1
million of these uninsured people have been added to health centers' patient
rolls over the past few years, accounting for more than half of all new patients
served over that period. The continuing loss of Medicaid coverage among eligible
low-income women and children. More than 2 million former Medicaid recipients
have lost coverage over the past two years, even as they or a family member
gained employment, because of the delinking of Medicaid coverage from welfare
benefits. Even with the new State Child Health Insurance Program (CHIP) that
today covers nearly 2 million children, more children are uninsured today than
in 1995. Among the 4.5 million children and adolescents served by health
centers, more than 1.6 million (36 percent) are uninsured -- despite the fact
that virtually all of these children are from low-income families with incomes
below twice the federal poverty level. If all of the 1.6 million children and
adolescents served by health centers were appropriately enrolled in Medicaid or
CHIP, health centers could use the Federal grant dollars being spent to care for
them to care for an additional 1.6 million uninsured people. There are
significant barriers to enrolling eligible individuals in Medicaid and CHIP.
Of particular concern here is the failure -- and oftentimes outright
refusal -- of most States to abide by current law requiring the outstationing of
Medicaid eligibility and enrollment workers at health centers and at safety net
(disproportionate share) hospitals. We have documented this serious problem in a
recent letter to HCFA, a copy of which is attached to my statement. I might note
that the frustrations involving attempts to enroll people in the Medicaid and
CHIP programs for which they qualify are not limited to safety net providers
alone. A recent survey of low-income families, conducted by the Kaiser
Commission on Medicaid and the Uninsured, found that fully two-thirds of the
eligible-but-not-enrolled individuals surveyed had attempted to enroll their
children in these programs, without success, due principally to state
administrative and bureaucratic barriers (National Survey of Barriers to
Medicaid and CHIP Enrollment, February 2000). The decline in charity care by
non-safety net providers. As managed care has extended its reach in local
communities, financially-pressed providers have lost the ability to shift the
costs of uncompensated care to other payers, causing many to reduce or even
eliminate completely the provision of charity care to those unable to pay. A
recent study found substantially lower levels of charity care among physicians
who were heavily involved with managed care or who practiced in communities with
high managed care enrollment (exceeded only by the almost non-existent level of
charity care among physicians who refuse to participate in managed care)
resulting in an "increased burden on an already fragile safety net" (Cunningham,
JAMA, November 1999).
The cumulative impact of these trends has nowhere
been felt more profoundly than among health centers and their fellow safety net
providers. A survey of health centers conducted by NACHC last summer found that
more than 80 percent of all centers had increased the number of uninsured
persons served, more than two-thirds of centers said that many people had lost
Medicaid coverage locally, and 60 percent reported that local charity care
levels had fallen markedly. It should come, then, as no surprise that many
health centers are financially pressed, and some are struggling to keep their
doors open, in these increasingly difficult times.
Yet even with these
pressures, health centers all across the country have taken steps to form
networks and managed care plans with other local providers, to negotiate
subcontracts with other managed care plans, and to develop the financial, legal
and business acumen necessary to function effectively in managed care. Health
centers do play an important role in managed care -- especially for Medicaid and
CHIP-enrolled populations -- because, like other managed care organizations,
they are: a first point of entry for their patients into the health care
delivery system; experienced in the management of health care costs, since they
must run their programs within a limited annual budget; and managers of care to
keep their patients health and out of costly emergency rooms, hospitals, and
specialists' offices.
Almost three-fourths of all health centers are
participating in managed care as subcontracting providers to managed care plans,
serving more than 2.4 million managed care enrollees. Health center- formed
managed care organizations (MCOs) now operate in some 20 states, with more than
800,000 enrollees; in 12 states, these MCOs rank among the top 3 in terms of
market share. Yet most of these MCOs now report that the states have reduced
their capitation rates significantly, and many say that the new rates are
insufficient to cover their costs, a claim that is borne out by the growing
withdrawal of large commercial managed care organizations from the Medicaid
managed care market in response to payment rates they deem insufficient.
On a more local level, health centers have joined with each other and
with other local providers to form integrated service networks to coordinate and
improve their purchasing power or to better organize the continuum of care,
especially for those who are uninsured. For example, 6 health centers in
southwestern Mississippi have come together to expand health care access for the
uninsured in our area. These efforts have encountered two major barriers: An
increasing difficulty securing needed services for their uninsured patients from
local community hospitals and medical specialists, as those providers react to
reduced payment rates by severely restricting the care they provide to
individuals who are unable to pay. Problems establishing perfectly legitimate
agreements with local providers who are willing to provide such care, and thus
to both enhance access to important services for health center patients and
produce savings of federal grant dollars, without running afoul of the fraud and
abuse restrictions in the Social Security Act. I might note that our National
Association -- and several Members of Congress -- have urged the HHS Inspector
General to provide a 'safe harbor' for arrangements of this sort, which would
assure savings of federal grant dollars and/or expand health care access and
services for health center patients. After 6 years, there is no resolution of
this request to date.
Health Centers Need the Support of Congress to
Fulfill Their Mission
Health centers request that this Committee and the
Congress act to support our work in several specific ways. We have been, and
will continue to fulfill our mission of providing high quality health services
to the medically underserved at low cost. We will continue to bring needed
health care professionals to underserved communities, and to work in partnership
with local community to fulfill community needs and improve health outcomes of
the people we serve in our areas.
While we strongly recommend that the
reauthorization of the federal health centers grant program under section 330 of
the PHS Act proceed on schedule next year, there are a number of specific steps
that this Committee and its Members can take this year to expand and improve
access to quality health care for more uninsured Americans. Specifically, we
need your help in the following areas:
Support increased resources to
meet an ever-growing need for care. Health centers are doing their part to
address this problem, but more must be done to serve the growing number of
families who do not have access to health care services. More than 16.5 million
uninsured individuals currently do not have access to a regular source of health
care. We urge the Committee to actively support an expansion of the health
centers program to at least double access to care for uninsured and underserved
patients in the next five years. This can be achieved by increasing federal
appropriations for the program by at least 15 percent 'per year through 2005 --
a small amount given the unmet needs for care. This plan would ensure access to
quality health care for 20 million individuals by FY 2005, including 9 million
uninsured persons.
Expeditiously reauthorize and strengthen the National
Health Service Corps (NHSC). While the NHSC has proven successful in addressing
health professional shortages in many areas, severe underfunding has undermined
the program's ability to meet its primary goal. We strongly support action to
reauthorize the NHSC at a level of at least $232 million this
year. The NHSC also needs to be streamlined to work more effectively with safety
net providers, including health centers, which share the goal of improving
health care access in underserved areas. More NHSC providers should be placed at
health centers to meet the health care needs of the uninsured and low-income
individuals who reside in medically underserved areas.
Enact a
permanent, stable, and fair Medicaid payment system for health centers. Since
1989, Congress has required health centers to be reimbursed for the costs of
providing care to Medicaid and Medicare patients. Before cost-based
reimbursement, health centers were forced to use Federal grant funds --
originally intended to support care for the uninsured -- to subsidize
underpayments by the Medicaid program. Unfortunately, Congress in 1997 approved
a phase-out of this vital payment protection, and while the 1999 Balanced Budget
Refinement Act delayed the elimination of the Medicaid payment system for one
year, it failed to establish a permanent solution for health centers'
Medicaid funding problems. Without a secure, long-term Medicaid payment
system, health centers will be forced to reduce services to the uninsured and
many may be ultimately forced to close their doors. We urge the Committee to
fully support the bipartisan Safety Net Preservation Act (S. 1277), which would
establish a Medicaid prospective payment system (PPS) for health centers. The
PPS would provide a permanent and stable Medicaid payment system for health
centers, ensuring that they are able to continue to care for low- income and
uninsured individuals and that basic health services are sustained in local
communities.
Support a more active role for health centers in enrolling
children and other eligible persons in Medicaid and CHIP. As noted earlier,
health centers have been frustrated over the past 10 years at the failure of
States to comply with the outstationing requirement in Medicaid law, and at
HCFA's failure to enforce compliance. We urge this Committee, which has clear
jurisdiction over the health centers program, to convey its concern over these
failures to both the Finance Committee and to HCFA, and to press for compliance
with the current- law directives. For each of the 1.6 million uninsured children
we care for who can be successfully enrolled in Medicaid or CHIP, we could serve
one more uninsured person who does not qualify for any health insurance plan.
Assist and support the efforts of health centers to affiliate with each
other and with other providers, and to fully participate in managed care
systems. This Committee amended the health centers law in 1996 to make allowable
the use of grant funds for costs related to the formation of integrated service
networks and managed care plans, including such costs as the purchase of data
and information systems, as well as legal, financial, and other technical
assistance. In addition, the Committee established a new authority to allow HHS
to issue loan guarantees to assist health centers in obtaining capital
assistance, from private sources in the local community, for the costs of
establishing information systems, improving and expand facilities, and making
other infrastructure improvements, as well as the costs of meeting State
licensure, risk reserve, and solvency requirements critical to network and plan
formation and participation. However, the loan guarantee authority has
encountered difficulties in meeting the States' solvency or risk reserve
requirements, in two important ways: it does not permit the issuance of a single
guarantee to a group of health centers, or to a managed care plan that is owned
and operated by several health centers; and it is limited to the issuance of a
loan guarantee, requiring a health center or centers to borrow capital and pay
interest only to have the capital resources placed in a reserve account to meet
a State's requirements.
Accordingly, we urge the Committee to revise the
loan guarantee authority to allow HHS to issue solvency guarantees to a health
center, a group of health centers, or a managed care plan owned and operated by
one or more health centers, in order to meet a State's solvency requirements.
This would result in substantial savings federal grant dollars, while assisting
health centers to fully participate in Medicaid and other managed care
arrangements.
We also urge the Committee to ask the HHS Inspector
General to provide a 'safe harbor' for arrangements between health centers and
other providers or suppliers of health care goods and services that will result
in a documented savings of federal grant funds or will increase the availability
or accessibility of health care services for health center patients.
Alternatively, the Committee may wish to establish its own safe harbor for such
arrangements under the PHS Act.
Comments on the New Community Access
Program
Last year, Congress provided $25 million in
funding for a new demonstration project, designed to encourage collaboration
among health care providers and other community organizations to improve access
to care for the growing number of Americans without health insurance. HHS is
currently in the process of implementing this new effort, which it has named the
Community Access Program (CAP). As members of the principal federal program
directed at providing access to health care for uninsured and underserved
Americans over the past 35 years, health centers would like to make some key
points regarding this new program:
1. We welcome any effort that holds
the promise of improving access to needed care for the uninsured and for other
underserved populations, especially for efforts to help get other local
providers of charity care to commit to providing needed services for our
uninsured patients and others in an organized fashion. This is particularly
important in these times when, as I have noted earlier, levels of charity care
are falling in communities all across the country as managed care extends its
hold.
2. Any resources provided for this new CAP program must not come
at the expense of the levels of support needed to maintain and expand those
programs that are already targeted at providing desperately- needed services and
care to low income, largely uninsured populations programs like the health
centers, the National Health Service Corps, the Ryan White CARE
Act programs, and others as well. This is particularly important since,
under the model proposed by HHS, the new CAP program will not support the direct
provision of health care services, except for filling limited service gaps in
such areas as mental health or oral health.3. Because true safety net providers
-- those, I repeat, with a legal obligation to provide care to persons who
cannot afford to pay -- are at the very core of health care delivery for the
uninsured in local communities today, and have years of experience and the
resulting expertise in organizing the provision of care for this population,
then any local effort that is funded by the CAP program must clearly include
local safety net providers, not just as participants but as core decision-makers
and grant recipients. I should add that the HHS version of the CAP program is
patterned after two similar initiatives undertaken in recent years by major
philanthropic foundations (the Kellogg Foundation and 'the Robert Wood Johnson
Foundation); and while these two new efforts are still in the earliest stages of
operation, the experience of safety net providers with their locally-funded
organizations has been mixed at best.
We intend to monitor closely the
implementation of the new CAP program and to let members of both the
Administration and the Congress know of the results. For the moment, I would say
that we remain cautiously optimistic and hopeful that the new program will work,
but with some serious concerns over the potential for confusion and duplication
of effort when just the opposite is needed.
Thank you for this
opportunity to present our views. We look forward to working with all the
members of the Committee to improve and expand access to vital health care
services for many more of America's uninsured and underserved.
END
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