Declining medi-cal enrollments are hitting state's safety-net clinics harder than managed care

A growing percentage of California’s Medi-Cal patients are receiving medical care within a managed care system, and this policy change has raised concerns about whether “safety-net” health care providers can maintain their market share of these patients.

A new study published today reports that a majority of primary care clinics that anchor the state’s medical safety net for low-income persons have experienced a decline in the number of patients insured by Medi-Cal.  But the decrease was due to an overall decline in the number of Medi-Cal beneficiaries rather than implementation of Medi-Cal managed care, according to the analysis.  Findings showed the clinics maintained their traditional market share of patients.
Researchers from the University of California, San Francisco headed the study team.  A summary of their findings, titled “Medicaid Managed Care’s Impact on Safety-Net Clinics in California,” appears in the new issue (January/February 2000) of the journal Health Affairs.

Over the past few years, the California State Department of Health Services has been converting its traditional fee-for-service Medicaid program-known as Medi-Cal-to a mandatory managed care system in an effort to reduce the cost of the program and enhance the access of patients to health care providers.

This mandatory system has been implemented in many of California’s largest urban counties (Alameda, Contra Costa, Fresno, Kern, Los Angeles, Riverside, San Bernardino, San Francisco, San Joaquin, Santa Clara, Stanislaus, and Tulare). 
“If our study results represent Medi-Cal beneficiaries’ choices on the basis of quality, then this is a welcome finding for both safety-net providers and the Medi-Cal program,” said study principal investigator Andrew Bindman, MD, a UCSF associate professor of medicine, epidemiology, and biostatistics.  “But if Medi-Cal beneficiaries are continuing to use safety-net clinics because of a lack of other provider options, then this finding may represent a failure of Medi-Cal managed care to improve access.”

During the late 1990s, California has averaged about 360 safety-net clinics, the largest number in the country.  They include federally funded community and migrant health centers, county-run health centers, and Indian Health Service sites-all of which provide health care to a population of patients who are predominantly Medi-Cal beneficiaries or uninsured. 

The study covered the operations of safety-net primary care clinics statewide during 1995-97 that treated more than 1,600,000 total patients and almost 500,000 Medi-Cal patients annually.  Data were provided by the California Department of Health Services and the California Office of State-wide Health Planning and Development.
Among their conclusions, the researchers noted that that even if clinics are able to maintain their market share of Medi-Cal patients, they still face tremendous challenges that threaten their survival.  “Maintaining market share of a dwindling Medi-Cal patient base might not provide adequate resources for clinics that are marginally financial viable, particularly if they need to spread their patient revenues to subsidize care for a growing number of uninsured patients,” they stated.

Adding to the mix is the impact of cost control measures under Medi-Cal managed care, most commonly in the form of capitation, that threaten to decrease the amount of money that clinics receive for caring for Medi-Cal patients, according to Bindman, who also serves as director of the UCSF Primary Care Research Center at San Francisco General Hospital Medical Center.
Other study results include:
—Between January 1996 and January 1998, the percentage of Medi-Cal beneficiaries statewide receiving their care through managed care increased from 21 to 37. 
—Fifteen of the 58 counties in California experienced an increase in the percentage of Medi-Cal beneficiaries in managed care programs during this period.
—At the same time, the total number of Medi-Cal enrollees in California actually decreased from 5.4 million to 4.9 million-a 10 percent reduction.
—Between January 1996 and January 1998, the total number of Medi-Cal patients using the state’s safety-net primary care clinics decreased 14.6 percent, from 563,250 to 480,789. 
—Because the total number of Medi-Cal beneficiaries statewide also dropped during this period, the percentage of the state’s Medi-Cal beneficiaries visiting at least one safety-net primary care clinic decreased by a modest 0.7 percent (from 10.4 percent to 9.7 percent).
—Most clinics (87 percent) in counties that converted to Medi-Cal obtained Medi-Cal managed care contracts.

  “Our results in no way undermine the clinic supporters’ arguments that safety-net providers are on the ropes.  If the safety-net clinic system is to remain intact there needs to be a mechanism to quickly replace the funds that it is losing from a diminishing pool of Medi-Cal patients,” said Bindman.

Study co-investigators are Kevin Grumbach, MD, UCSF professor and chief of family and community medicine at San Francisco General Hospital Medical Center; Susannah Bernheim, UCSF medical student and research associate in the UCSF Primary Care Research Center; Karen Vranizan, senior statistician, UCSF Department of Medicine; and Michael Cousineau, DrPH,  associate professor, University of Southern California School of Policy Planning and Development.

The study was funded by the Henry J. Kaiser Family Foundation and the California Program on Access to Care.