Separate or United: The Safety Net in the Era of Health Care Integration

Separate or United: The Safety Net in the Era of Health Care Integration Patricia A. Gabow, Mark Smith Journal of Health Care for the Poor and Underserved, Volume 28, Number 3, August 2017, pp. 853-859 (Article) Published by Johns Hopkins University Press DOI: https://doi.org/10.1353/hpu.2017.0082 For additional information about this article https://muse.jhu.edu/article/666583 Access provided by your local institution (15 Aug 2017 16:16 GMT)

COMMENTARY Separate or United: The Safety Net in the Era of Health Care Integration Patricia A. Gabow, MD, MACP Mark Smith, MD, MBA Abstract: Rapid and significant transformation is occurring within the private sector of the health care system with consolidation, integration and the formation of new organizational structures such as Accountable Care Organizations. However, the safety- net systems upon which many patients rely, have remained largely in silos. To focus a spotlight on this issue at a community level we have compared the safety net in Alameda County, California and Denver, Colorado, the former with a safety net largely in silos and the latter an integrated safety net. We have discussed the policy implications and have delineated some of the levers that could be utilized to facilitate greater safety- net integration. Key words: Safety net, community health centers, integrated systems, ACA. The Affordable Care Act (ACA) fueled health care transformation, expanding coverage through Medicaid and marketplace subsidized premiums, moving from volume- to value- based payment and a broadening focus on population health. 1,2,3 In response, the private sector is reconfiguring, creating integrated systems with a broader care continuum, prominently through coordinated care initiatives and Accountable Care Organizations (ACOs). 1 In contrast to the private sector, the major safety- net (SN) providers such as public hospital systems (PHS), community health centers (CHC or FQHC) and local public health departments (LPHD) who serve a critical role in health care for millions of individuals, including the growing Medicaid population, and in protecting the population s health, largely remain in separate silos. Despite the potential financial, patient care, and population health implications of this SN fragmentation, there has been little attention to this issue. To illustrate the problem and propose potential solutions this paper compares two very different locations: Alameda County (Alameda), California and Denver County (Denver), Colorado. The former SN is organizationally fragmented and the latter integrated. A Tale of Two Counties Alameda, California. The components of the Alameda SN and their relevant service volumes are detailed in Table 1. Each organization has its own governance, board of PATRICIA GABOW is a Professor Emerita of the University of Colorado School of Medicine Aurora, Colorado. MARK SMITH is Professor of Clinical Medicine at the University of California at San Francisco San Francisco, CA. Corresponding author Patricia Gabow can be reached at patriciagabow@gmail.com. Meharry Medical College Journal of Health Care for the Poor and Underserved 28 (2017): 853 859.

854 Separate or United Safety Net Table 1. COMPONENTS OF ALAMEDA COUNTY SAFETY NET SYSTEM Component Admissions/visits/services Alameda Health System Highland Hospital System (inpatient/ outpatient) 17,443/311,330 Alameda County Community Health Centers (total) 870,000 Asian Health Services Axis Community Health La Clinica de la Raza LifeLong Medical Care Native American Health Center Tiburcio Vasquez Health Center Tri- City Health Center West Oakland Health Council January 2015 Enrollment Alameda County Health Plans Alameda Alliance for Health 233,392 Anthem Blue Cross 60,243 Alameda County Local Public Health Department N/A directors, strategic priorities, administrative structure, employees, health information system, financial plan, and fundraising. Alameda s PHS, Highland Hospital in Oakland, which anchors the Alameda Health System (AHS), comprises four inpatient facilities with 849 licensed beds and four freestanding primary care facilities. It is governed by a County Board of Supervisorappointed Board and has 3,900 employees and total operating budget of $591 million. 4 Alameda has eight independent community clinic corporations, largely organized along geographic and/or ethnic lines, operating 32 federally qualified health clinics (FQHC) (Table 1). 5 There are 18 other non- FQHC clinics. Publicly- funded behavioral health services are delivered through over 40 providers, largely funded through Alameda County Behavioral Health Care Services (BHCS), with a budget of $385 million in 2013, with funds directed through a 15-member Board of Supervisor- appointed Alameda County Mental Health Board. 6 Alameda has two Med- Cal managed care health plans: The Alameda Alliance for Health, a county- based quasi- public plan, and Anthem Blue Cross, a private for- profit plan. The former has its own board, administrative structure, and operating budget. This plan suffered financial problems, and was put in receivership in 2014. 7 Despite being separate entities the two plans have overlapping provider networks with most outpatient providers in the SN. 8 The Alameda County Department of Public Health, headquartered in Oakland, has 21 satellite offices, employs 600 individuals, operates the county 911 system and had a budget of $692 million in 2013 14. 9 Since each of Alameda s SN entities is a separate organization, there are barriers to

Gabow & Smith 855 patient flow across different components. For instance, each organization maintains its own patient medical record, using different, and largely non- interoperable, electronic systems. Given the component s separate governances, it is not possible to obtain overall financial or quality data for the population served by the aggregate SN. Denver, Colorado. In 1997 Denver s SN, which had been part of county government since 1860, became an independent public authority, transferring existing components to a new entity, Denver Health and Hospital Authority (DH) (with the exception of certain regulatory public health functions). Denver Health components (Table 2) are overseen by an Authority Board and a Community Health Board. These two boards are co-applicants on the federal 330 FQHC grant, an innovative approach enabling integration of the PHS and the FQHCs. There is one CEO for DH. All DH staff, including the physicians, are DH employees. Strategic and capital planning, including bond issues, budgeting, and financing and fund raising are performed for the entire system. Table 2 details the service volumes. 10 The system had 5,028 employees and an operating budget of $787 million in 2013. Denver Health operates a 525-bed acute care hospital with a Level I trauma center, adult and adolescent psychiatry units, a specialty practice on its campus, and an off- campus 100-bed acute non- medical detoxification. The 911 system is a two- tiered system with the Denver fire department and the DH operated paramedics and ambulance system. Denver s nine FQHCs and all 16 school- based clinics, which are operated in collaboration with Denver Public Schools, are part of DH. There are three non- FQHCs and one 330-grant funded homeless clinic in Denver which are not part of DH. An independent entity, the Mental Health Corporation of Denver, has primary responsibility for Denver s public mental health services. Denver Health operates a wholly owned HMO which serves commercial, Medicare, Medicaid and CHIP and subsidized premium market place members. The Department of Public Health has 136 employees including physicians and nurses and an operating budget of $24.7 million. 11 The Rocky Mountain Poison and Drug Center operates the Table 2. DENVER HEALTH Components Patient admissions/visits/ services Acute Care Hospital 24,077 Emergency and urgent care centers (adult and children) 117,735 Paramedics 89,000 Community Detoxification Center 29,388 Ambulatory care clinics (total) 562,078 (CHC, School based clinic, specialty clinics) HMO (members) 74,528 Call Center (poison and drug center and nurse advice line) 276,839

856 Separate or United Safety Net DH integrated call center, including an advice line staffed by nurses all day and night, every day of the year. There is a single patient identifier across the DH clinical system, making it possible to link electronically the data warehouse s patient demographic, financial, clinical, and ancillary service data and facilitating clinical data at the point of care and the use of patient registries. Patients can move seamlessly among the system s components. This integrated structure including the health plan has enabled DH to function essentially as an ACO for the Medicaid population of Denver and to achieve financial stability with access to the capital markets, to provide high quality care including high levels of preventive care, excellent management of chronic disease, and impressively low overall hospital mortality. 12 Discussion These two representative communities yield important observations for policy makers and health care leaders to consider in order for the SN to provide high- value care to Medicaid and other vulnerable patient populations in a transformed health care environment. Safety- net fragmentation creates a barrier to financial and clinical outcomes, transparency at federal, state, and local levels, as exemplified by the differences in data availability between Alameda and Denver and the incomplete mental health data even in the Denver model. The lack of information on total government support makes it difficult to assess both duplicate funding and funding gaps. In the common model, each SN component requires an administrative structure, health information technology, and capital for infrastructure as the 13 separate SN components in Alameda demonstrate. This likely adds administrative complexity, duplication, and cost to the SN and to government- funded health care, and may hamper seamless and effective care to a needy population. There is some suggestive evidence that Denver s integrated care may be more efficient than Alameda s system of care. Denver has fewer CHCs and LPHD sites/ per capita than Alameda although it has smaller size and population. While obtaining total cost and revenues for the SN have not been possible in Alameda County, the PHS and LPHD exceed the operating budget of DH s integrated system by almost $500 million. There are also suggestive data that state and federal governments accrue financial benefit from DH s integration. Colorado s all- payer database demonstrates that Denver s Medicaid total costs of care/ person/ year where most Medicaid patients are served by DH is approximately $2,850 compared with between $3,048 and $3,316 in surrounding counties and $3,127 in the state as a whole. 13 Similar data are not available for California. Although we do not have definitive evidence that an integrated system yields higher- quality patient care, such a system does enable unified quality outcome reporting something that is unavailable for the Alameda SN. Indeed, as a central premise of managed care and ACOs, it is reasonable to assume that unified data systems, information availability, and seamless patient movement across the care continuum would create better outcomes. These observations suggest that integration, or at least closer cooperation, among the main SN components in any geographic area offers opportunities for higher quality

Gabow & Smith 857 and lower cost and facilitates the SN response to external health care forces. However, although the majority of communities have a fragmented SN organization (like Alameda s) integrated organizational structures are possible. Other SN providers, primarily the PHS have made some strides toward integration. For example, 11 PHS operate CHCs; 12 operate LPHD, and some operate health plans. 14 Efforts by CMS including Medicaid ACOs, the Innovation Acceleration Project (IAP), the Delivery System Reform Incentive Payment Programs (DSRIP), State Innovation Models (SIM) and some 1115 waivers such as those in Oregon are incentivizing and facilitating the development of integrated SN systems. 15 Moreover, some ACA components specifically affect the SN and will require greater efficiency and a broader continuum of care. On one hand, many PHS patients who were formerly uninsured now have insurance and should improve the SN providers finances. This appears to be occurring for those PHS in Medicaid expansion states. 15 Conversely, these formerly captive populations can now access care from other pro viders and some will choose these providers. Additionally, dedicated SN funding streams, particularly Disproportionate Share Hospital (DSH) payments, are scheduled for cuts, and FQHC cost- based reimbursement may ultimately be reexamined. Despite the potential benefits of and the market forces for SN integration, there are significant barriers including governance, funding, culture, regulations, and political forces. Safety- net systems do not share a common governance structure, often even within the same SN provider category. The SN components have varying, complex, and often volume- based financing. Safety- net organizations workforces are often dedicated to underprivileged patients and their communities and are protective of their autonomy and independence, creating barriers to the integration and scale necessary to thrive in the modern health care landscape. Path to integration. The path to SN integration will require a broad range of actions. Given the SN s dependence on government funding, SN integration will first require federal, state, and local leadership to endorse this as a desirable goal. While the degree of integration will likely vary over time, geography, and organizational culture, potential integration steps could move from the easiest stage of administrative function integration, such as regulatory compliance and personnel management, to clinical resource integration starting with easily shared centralized call center to the more difficult clinical integration and finally to the most difficult task of governance integration. Achieving meaningful, operational integration will require the use of regulatory and financial levers. Given the federal oversight of all the SN components, there is significant potential to ease the regulatory burden for integrated systems such as an easier path to LPHD accreditation, and/or longer grant or accreditation periods for CHCs and PHS. The United States Department of Health and Human Services (HHS) could change governance regulations to facilitate and encourage the integration of FQHCs with PHS. Federal and state governments have financial levers to drive integration. The direct federal payments for the PHS and FQHCs through DSH payments and FQHC grants, respectively, total over $6.1 billion annually. 14,16,17 In addition, there is state and local support to PHS and FQHCs and direct governmental support to LPHDs. 14,16,17,18,19 Current payment structures such as FQHC cost- based reimbursement, and special SN payments such as DSH could more reflect a movement to value- based purchasing.

858 Separate or United Safety Net The Department of Health and Human Services could require that all SN providers receiving SN- specific payments within a given city/ county or functional service area, create meaningful operational integration by a specific date. A carrot approach might be more palatable and feasible. CMS s initiatives with Medicaid ACO s, IAP, DSRIP programs, and SIM grants could be accelerated, augmented, and motivate greater integration. Federal and/or state governments could reduce future DSH funding cuts for integrated systems through a shared savings model. Given that Medicaid is the major payer for the PHS and FQHCs, state and federal Medicaid policies could support integrated SN systems with approaches such as preferential Medicaid HMO patient assignment, greater shared savings in these HMOs or Medicaid ACOs or higher administrative match rates for certain integrating functions. Some places currently do have preferential member assignment. Since most SN providers are included in Marketplace plans, greater integration would minimize the disruption of care as low- income patients churn between Medicaid and Marketplace plans. Thus, there are many levers to motivate and accelerate SN integration, if there is the political will to use them. Conclusion. Despite the critical role that the SN providers have for the nation s health and the substantial government funding for these providers, there has been little attention to their organizational relationships, their lack of integration, or its impact on total SN funding. The role of these providers in patient care will likely increase as Medicaid continues to expand. In order to bring focus to this issue, we have compared the contrasting SN organization in Denver, Colorado and Alameda, California. The largely fragmented SN structure is most common and represented by Alameda, while Denver exemplifies a highly integrated SN system. The growing focus on health care value, cost, access, and population health; the formation of integrated delivery systems, such as ACOs; and payment models moving toward bundled and global payments all point to the greater organizational consolidation and integration that is occurring in the private health care system. Without such SN integration, these systems and the patients they serve will be disadvantaged in the new health care environment. We have delineated a variety of steps which could facilitate such integration. Given the critical role SN providers play in individual and population health, these institutions deserve attention and focus if we are to achieve high- value care for all in America. References 1. Miller H. From Volume to Value: Better ways to pay for health care. Health Aff (Millwood). 2009 Sep Oct;28(5):1418 28. https://doi.org/10.1377/hlthaff.28.5.1418 PMid:19738259 2. Rajkumar R, Conway PH, Tavenner M. CMS engaging multiple payers in payment reform. JAMA. 2014;311(19):1967 8. https://doi.org/10.1001/jama.2014.3703 PMid:24752342 3. Kindig D, Stoddart G. What is population health? Am J Public Health. 2003;93(3):380 3. https://doi.org/10.2105/ajph.93.3.380 PMid:12604476 PMCid:PMC1447747

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