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Help the Uninsured (Without Going Broke)

Jim Molpus, Kathryn Mackenzie, John Commins, for HealthLeaders Magazine, August 11, 2008
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The number of people who can't pay much—or anything—for their care just keeps rising. Some hospitals have found new ways to help them while still protecting the financial health of the hospital.

Treating the nation's uninsured population is not a new problem for hospitals—but it's a problem that is only getting bigger. Even as the number of uninsured patients flooding healthcare facilities across the country grows larger, hospitals and health systems must find ways to care for those patients with limited financial resources amid the threat of government reimbursement cuts.

Is there any way to effectively manage the uninsured? Some organizations have decided that spending time and money on the front end—whether through initiatives like a physician/administrator committee that allocates resources for uninsured care or training frontline staff to be financial counselors—makes more sense than waiting for patients to accumulate massive bills later. For other facilities, the key to offsetting uninsured costs is the revenue resulting from integrating employed physicians into an ambulatory care network. But even organizations that have taken clear steps to deal with the uninsured problem now face an uphill battle.

Creative solutions
Nowhere is the challenge of treating the uninsured more acute than in Texas. More than 5.5 million people, or 25% of the population, in the Lone Star State are uninsured—the most in the nation, according to the Texas Medical Association. The state's uninsured rates are 1.5 to 1.7 times the national average. As those numbers continue to climb, hospital leaders have been forced to take more creative measures to combat the problem. In Houston, where the uninsured rate has climbed to 33% of the city's population—or nearly 1.5 million people—leaders at Memorial Hermann Healthcare have searched for answers outside the walls of the system. The 14-hospital organization helped form a collaborative of 174 public and private safety-net health systems, coalitions, advocacy groups, and social service providers to guide the city's medically indigent residents away from emergency rooms and into a new network of primary- and specialty-care providers.

"The collaborative had to take aggressive strategic actions to deal with this situation. We saw that with the spike in uninsured, we were now going to have to shift our focus from internal efforts to external efforts," says Dan Wolterman, Memorial Hermann's president and CEO. That shift in focus eventually culminated in the Gateway to Care Provider Health Network, a corporation through which a network of physicians and supporting service providers have agreed to take a self-determined number of uninsured patients each month. Since the program's inception in 2000, Gateway to Care has brought $77.5 million in new healthcare funding to the region, says Carol Paret, board president for Gateway to Care and CEO of the Memorial Hermann Community Benefit Corporation. "Essentially we are building a community infrastructure so the uninsured will have a primary-care medical home other than the ER, with the necessary specialty care in the community to support the medical home," says Paret.

The program, which has opened 19 new federally qualified health clinics over the past eight years, operates on an annual budget of $1.8 million, says Paret. But quantifying the savings to the Memorial Hermann system is not an easy task, because the program is a collaborative effort between the hospital operator and numerous other Houston health systems, she adds. "The cost to each program differs, and each program has a different budget, but we all have the same ultimate goal of achieving 100% access to healthcare for the uninsured."

Wolterman says a key component to providing quality healthcare to the region's uninsured population is making sure they have access to specialty care. "We were seeing patients visit primary-care clinics and being diagnosed with a condition that needs a specialist. But since they have no way to see a specialist, they end up in the ER. We've restructured the system and created a new corporation solely focused on providing services to the un- and underinsured in the Memorial Hermann community," says Wolterman, who adds that the network has more than 1,000 physicians in all specialties who volunteer one or two slots per month to uninsured patients.

The Gateway to Care model also provides patients with a "nurse navigator" who helps direct them to the appropriate venue for care, says Wolterman. Navigators perform a combination of services associated with case management, such as outreach, eligibility determination, health promotion, referral, advocacy, and facilitation of service coordination.

Farther south, officials at the University of Texas Medical Branch at Galveston have given physicians more decision-making power in caring for the uninsured. The Demand and Access Management Program allows a senior group of physicians and administrators to determine how many uninsured patients the hospital can take on each month based on the hospital's available resources. Placing such limits on access to care may seem controversial, admits Mike Hill, interim associate COO at UTMB, but it was a necessary step for a system being stretched thin by uncompensated care.

"We tried to take as many unsponsored patients as we could for as long as we were able, but it has gotten to the point where he have had to make a determination about how to proceed," says Hill. The group's decision about whether to take on a patient, however, is always clinically based, he adds. "We log consults and pass that log onto the physicians who determine whether they can or need to see the patient based on clinical data and allocation. We have and continue to provide a tremendous amount of service to the unfunded. That's part of our mission—but like everyone else, we are limited in the amount of resources we can spend on uncompensated care."

Hill says surrounding counties send the hospital consults, and the hospital decides based on available resources and clinical evaluations whom it can afford to take care of, keeping in mind alternative health provider choices like urgent- and primary-care clinics. UTMB's program also seeks to educate patients on available services in their area, encouraging counties to provide as much primary care as they can. Hill emphasizes, however, that although the system has had to place limits on the number of uninsured it can handle, the decision is never based solely on allocation and does not apply to emergency room patients. He says physicians may choose to refer a patient to other less expensive healthcare venues only if the patient's case is not critical or if the patient can be treated just as well at a local urgent- or primary-care clinic.

Devon Herrick, a senior fellow with the Dallas-based National Center for Policy Analysis, says UTMB's DAMP program is actually not all that uncommon as more hospitals find they have to limit the number of nonemergency uncompensated care cases they accept in an effort to remain solvent. "They are all attempting to get people out of the ER into a lower-cost setting," says Herrick. "They are also taking steps to reduce fraudulent use of the system by patients who don't qualify for care either based on geographical location or because they exceed income limits."

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