Community health centers and managed care: Helping to provide a safety net for the safety net

Managed care organizations affiliated with community health centers are the largest or second-largest Medicaid managed care organizations in several states and are the plans many states look to for help when commercial plans leave. But community health center-affiliated plans have financial problems of their own and need support to remain effective safety net providers.

Two recent studies have found the health plans affiliated with community health centers actually outperform commercial plans on standard quality measures.

In March, the Association for Health Center Affiliated Health Plans (AHCAHP) in Washington, DC, released data on a Kaiser Family Foundation analysis of 1998 Health Plan Employer and Data Information Set (HEDIS) measures and an American Public Human Services Association (APHSA) study of 1999 HEDIS scores.

In the APHSA study, plans affiliated with community health centers outperformed the national Medicaid mean in nine of 11 quality measures. That result confirmed similar findings in the Kaiser study that said that health center plans outperformed other Medicaid-dominant plans as well as commercial plans serving Medicaid on five of nine quality indicators.

Margaret Murray, executive director of AHCAHP tells State Health Watch the association contends there are several reasons why plans affiliated with community health centers score so well on quality measures. First, such plans generally are provider-sponsored, so they have closer and better relationships with their core provider network than do many other plans. Second, the plans have a deep commitment and involvement with their communities, including people who are currently uninsured. And third, they have a firm commitment to the Medicaid program.

Ms. Murray says that as commercial plans have begun to leave the Medicaid managed care marketplace, health center-affiliated plans have become larger players. In 1997, for instance, 64% of the plans in the Medicaid marketplace were commercial, but by 1999, that had dropped to 58%. By 2000, the health center plans were the first or second largest Medicaid plan in each of seven states.

Building better clinical systems

The close relationship plans have with providers, Murray says, allows them to build better clinical systems of care and to obtain greater provider support for clinical changes. Their business model is based on a partnership with providers rather than the command and control type of arrangement that is the hallmark of some commercial plans.

Some health center-affiliated plans pay their providers incentives for higher-quality provision of care rather than imposing penalties or incentives to limit care.

Also, the core provider network generally depends on community health centers, which have a proven track record of providing better care to low-income and vulnerable populations. And because the core of the networks is community health centers, plan members can see the same providers regardless of their insurance status.

By law, community health centers must offer free or reduced prices to low-income patients. So even if patients are not insured, they can continue to see their community health center providers and receive the necessary primary and preventive care. That continuity of care improves health outcomes over the long run.

A study conducted by George Washington University professor Ann Zuvekas for the University’s Center for Health Services Research and Policy in Washington, DC, found that community health center-affiliated plans are a viable alternative for Medicaid managed care if states can make accommodations for some of their unique characteristics.

Offer enabling services

She says that many plans and state officials are not aware that the health center plans offer a product that is more comprehensive than that offered by commercial health plans, particularly in terms of enabling services — such as transportation, language translation, and nutrition counseling that help members gain access to services or lead healthier lives. While funding often is not readily available for these services, they help set the plans apart and can save money in the total health care system over the long term.

Jim Hooley, CEO of Neighborhood Health Plan in Boston, tells State Health Watch that his organization has been significantly hurt by recent health care inflation and that state premium rates have not kept pace with inflation.

"There are financial issues that the state and federal governments are going to have to consider if they are to continue purchasing services from us," he says. "We’ve done a lot to try to manage our costs in terms of pharmacy usage and working closely with physicians on the level of care they provide. Unfortunately, our financial problems are coming at the same time that governments are struggling financially," he says. "There are no easy answers. If we want to maintain high quality health care and also contain costs, we need to develop strategies to help that happen."

Mr. Hooley says he’s convinced that the approach health center-affiliated plans take to their members can ultimately save states money on health care. "We offer more services that are appropriate for Medicaid enrollees," he says. "We meet people’s needs better. It will help if we invest in supporting people and caring for them early on rather than putting a lot into institutional care. We can save the state money and at the same time improve individuals’ quality of life."

[Contact Ms. Murray at (202) 659-8563, Ms. Zuvekas at (703) 978-2554, and Mr. Hooley at (617) 772-5701.]