Volume 61, Number 3 - Summer 2010

 

By Daymon Doss

Multiple factors are coming together to create significantly enhanced access to care for the uninsured and underinsured in southern Sonoma County. The new federal health reform legislation (commonly known as the Affordable Care Act), coupled with a grant from the Health Resources and Services Administration, will enable the Petaluma Health Center to double its capacity over the next decade. 

The HRSA grant is for $8.9 million and will be supplemented by a $500,000 federal apportionment secured by Rep. Lynn Woolsey. These monies, augmented by a $6 million bond from the state, will allow the health center to purchase and remodel a 53,000 square foot building in Petaluma, with opening scheduled for the summer of 2011.

Sonoma County is most fortunate to have an excellent network of federally qualified health centers (FQHCs) in our communities. The Petaluma Health Center (PHC), originally a department of the Petaluma Health Care District and Petaluma Valley Hospital, became an FQHC in 2001. As such, it is operated as an independent 501(c)(3) nonprofit and has its own governing board and administration. 

The 16,000 people in PHC’s patient population are often perceived to be low-income or uninsured, but that perception is somewhat inaccurate. The truth is that PHC serves the entire community. Fifty percent of PHC patients participate in Medi-Cal or Medi-Cal related programs such as Healthy Families. Another 10% are insured through Medicare, and 15% have private third-party insurers. The remaining 25% are uninsured. 

The uninsured include undocumented patients (2%), sliding-scale patients (10%), and patients whose income exceeds the financial levels required for Medi-Cal coverage (13%). Undocumented patients are welcome at PHC and receive the same process of care and patient services as all other patients. They are not identified externally as undocumented, but they are reviewed for ability to pay through the sliding-scale process.

The total uninsured population served by PHC exceeds 4,000 patients, many of whom will be directly impacted by pending changes in eligibility for government programs. 

Starting this year, the Affordable Care Act expands Medicaid (Medi-Cal in California) to all adults under the age of 65 with incomes up to 133% of the poverty line. This expanded coverage will have an immediate effect on uninsured patients in southern Sonoma County. The Act also includes a provision to establish a temporary national high-risk pool for individuals with pre-existing medical conditions. Children up to the age of 26 will be eligible for coverage, and health plans will be barred from excluding children with pre-existing conditions.

An additional feature that may affect the uninsured and underinsured is a health-related tax credit for small businesses and nonprofit organizations. The credit, which goes into effect this year, gives small businesses up to 35% tax credit for contributions to their employee health plans; nonprofits can receive up to 25%. The credit may encourage small businesses and nonprofits to begin offering health coverage to their uninsured employees. 

Next year, a new cafeteria-style plan will provide another vehicle through which small businesses can provide tax-free health benefits to their employees. The plan may ease the administrative burden for small employers and move more uninsured employees into an insured category. Concurrent with this change, Medicare is slated to increase payments for primary care physicians and general surgeons in medically underserved areas by 10%.

Another change beginning next year is the gradual phase-out of the Medicare Advantage program. The program will be frozen at 2010 levels and then ratcheted back to different levels for different areas over the next several years. In southern Sonoma County, the vast majority of Medicare Advantage patients are enrolled with Kaiser Permanente. Any decline in that enrollment will impact community based providers. 

One consequence of all these changes is that newly insured patients may be unable to find a physician. Perhaps in anticipation of that problem, Medicare will test innovative payment and service delivery models starting in 2011. Such models will probably include increased documentation and accountability for outcomes.

During 2012, the focus of the Affordable Care Act shifts to integration. Physicians will be paid more for primary care services and will be encouraged to form Accountable Care Organizations. These ACOs will require a much greater level of integration and collaboration than we have now in Sonoma County and will drive physicians and hospitals to look at their roles and how they partner. The ACOs may also signal the end of small private practice models in Sonoma County. 

The year 2012 will also bring value-based hospital purchasing programs that pay more for better outcomes in acute care hospitals. These policies may affect our local providers and their ability to maintain or grow their practices.

Beginning in 2013, Medi-Cal payments for services provided by primary care doctors will increase. These enhanced payments, scheduled to continue into 2014, will be supported by 100% federal funding and may increase the number of physicians who are interested in primary care as their professional base. Such a change could increase access to care and affect how patients choose their medical home. 

Two particularly significant provisions of the Affordable Care Act are slated to begin during 2014. The first is the opening of state-based health insurance exchanges for individuals and small employers, allowing them to comparison-shop for standardized health packages. The exchanges will facilitate enrollment and administer tax credits so that people of all incomes can obtain affordable coverage. 

The second provision gives states the option of joining multistate insurance exchanges offering nationwide health plans under the supervision of the Office of Personnel Management. These two provisions may completely change the insurance world we know today. 

The Affordable Care Act in its early phase is about increased access. I believe the Act will have its desired effect, and that many of our citizens will soon have more insurance coverage than today. This increased access will create multiple pressure points on our system and force us to integrate and collaborate. 

The next area of focus will be utilization and quality accountability. These are the tools that will be used to pay for the increase in access. The Act does not specify how to control costs, but the implementation regulations that will come from Medicare and other agencies will drive cost containment.

Thanks to the Affordable Care Act, the uninsured and underinsured will have greater access to care and will be better able to afford insurance coverage. The provider community, however, will be hard pressed to adapt to this new model and to the emergence of ACOs in our service areas. A major concern for Sonoma County will be the recruitment and retention of physicians. Access to systems without access to providers is not really access at all.