Back to the future? New cost and access challenges emerge. Initial findings from HSC's recent site visits.

Every two years, researchers at the Center for Studying Health System Change (HSC) interview health care leaders in 12 nationally representative communities to assess changes in local health care markets. The third round of site visits is under-way, and early findings from 2000-2001 indicate significant changes in health care financing and delivery are taking place across the country. This Issue Brief discusses developments in managed care, hospital consolidation, physician-hospital tensions, risk contracting and health plan premiums. State and federal policy makers charged with balancing cost, coverage, access and quality of health care should consider these emerging trends in their decision making.

Emergency room diversions: a symptom of hospitals under stress.

Emergency room (ER) diversions-when ambulances are redirected from one hospital emergency room to another-are becoming common in communities across the country, raising concern that critically ill patients are increasingly confronting obstacles to timely medical care. Although hospitals have long diverted patients during the winter flu season, recent site visits conducted by the Center for Studying Health System Change (HSC) reveal that ER overflows are now a year-round problem. As this Issue Brief describes, difficulty obtaining emergency services may be just the most visible evidence of deeper problems facing many hospitals as they struggle to meet growing demand for services at a time of increasing capacity constraints.

Local innovations provide managed care for the uninsured.

A number of communities in the United States are adopting a managed care approach to caring for low-income uninsured individuals. This Issue Brief focuses on such programs in five of the 12 communities that the Center for Studying Health System Change (HSC) is tracking intensively. It describes the local market factors that motivated the creation and varying design of these initiatives, all of which seek to increase access to primary and preventive care while managing the use of more costly inpatient and emergency care. The Issue Brief also discusses the long-term viability of these programs as they attempt to simultaneously expand access to services and contain costs for this growing population.

Insolvency and challenges of regulating providers that bear risk.

Risk contracting and capitation are two widely used financial mechanisms that give incentives to health care providers to control costs. Risk-bearing arrangements have failed in a number of communities, however. This has shaken local markets, disrupting consumers' access to health care services and triggering losses for physicians and hospitals. It also has raised questions about the adequacy of related regulatory oversight, which holds important implications for local and national policy makers. This Issue Brief provides case studies of failed risk-contracting arrangements in two of the 12 communities that the Center for Studying Health System Change (HSC) tracks intensively--Northern New Jersey and Orange County, Calif.--and examines implications for policy makers.

Update on the nation's health care system: 1997-1999.

A major component of the Community Tracking Study is biennial site visits to twelve communities randomly selected to be representative of metropolitan areas. In the second round of visits, conducted in 1998 and 1999, we found an intensification of an earlier trend toward looser forms of managed care to be causing enormous turmoil, as health care organizations stumbled over and often abandoned strategies conceived for more tightly managed care. Communities' health care systems are not evolving as many anticipated but rather have focused increasingly on horizontal consolidation and regional scope.

Managed care and physicians' provision of charity care.

CONTEXT: Health system changes may be affecting the ability of physicians to provide care with little or no compensation from patients who are uninsured and under-insured and may result in decreased access to physicians for uninsured persons. OBJECTIVE: To examine the association between managed care and physicians' provision of charity care. DESIGN: The 1996-1997 Community Tracking Study physician survey. SETTING AND PARTICIPANTS: A nationally representative sample of 10881 physicians from 60 randomly selected communities. MAIN OUTCOME MEASURE: The number of hours in the month prior to the interview that the physician provided care for free or at reduced fees because of the financial need of the patient. RESULTS: Overall, 77.3% of respondents provided an average of 10.3 hours of charity care per month [corrected]. Physicians who derive at least 85% of their practice revenue from managed care plans were considerably less likely to provide charity care and spend fewer hours providing charity care than physicians with little involvement in managed care plans (P = .01). In addition, physicians who practice in areas with high managed care penetration provided fewer hours of charity care than physicians in other areas, regardless of their own level of involvement with managed care (P<.01). Differences in charity care provision were also shown for other important factors, including ownership of the practice and practice arrangements (more charity care occurred in solo and 2-physician practices; P<.01). CONCLUSION: Physicians involved with managed care plans and those who practice in areas with high managed care penetration tend to provide less charity care.