David R. Jones
President and CEO, Community Service Society, New York City
The Mindless Drive to Privatization
Presented at
Envisioning Ethical Atlernatives in Health Care
9 December 1996
This morning we heard some powerful arguments about why the crisis in health care needs resolving, and fast. What I want to do is focus on how the system impacts on the poor of this city. I want to pinpoint three ways in which they are hurt.
The lack of primary care physicians in poor neighborhoods, the mindless drive to privatize our city hospitals without regard to the cost in human suffering, and the rush to push more than 1 million medicaid recipients into managed care without education or preparation are each in themselves troublesome. Coming as they are in combination, they are calamitous. I think there are solutions that go a ways toward resolving these problems.
Six years ago, CSS released its report, Building Primary Health Care in New York City's Low Income Communities. We concluded that New York severely lacked primary care capacity in poor neighborhoods. Six years later, it is still true. The report found that only 27 full-time physicians were available to provide care for 1.7 million New Yorkers in nine of our poorest neighborhoods. There is no evidence the situation has improved. The Health Care Financing Administration is even threatening to delay New York State's Medicaid Managed Care waiver - which will stall Medicaid managed care in its tracks - until the city and state can document adequate primary care capacity.
Insufficient primary care capacity contributes to over-reliance on emergency care, often the only medical service available in many sections of this city. Plans are overwhelmed with enrollees they cannot serve. Phones, the point of entry into the system, are never answered. There are waits of weeks and in some cases months for appointments. And surely lack of community-based primary care contributes to the emerging health epidemics - like the new virulent tuberculosis strain - we continue to experience.
Hospitalization rates for chronic conditions such as asthma are high and growing, precisely because they are not being treated earlier. Underserved communities show higher-than-average death rates for many diseases, some that could be treated initially through on-going relationships with primary care providers.
We know why these communities - Bushwick, central Harlem, East New York and the others - are underserved. It is no secret. Medicaid reimbursement rates are so low, even the most dedicated physicians find it financially hard to practice in inner-city neighborhoods. Attempts to induce doctors to work there are hamstrung in part because there has been no effort to reverse the Medicaid disincentive.
Proponents of free-market solutions believe that managed care will magically expand primary care capacity. Primary care doctors are critical to making managed care work. If care is administered regularly and early, preventive medicine can do wonders. But the market argument fails because there is no carrot that can attract more doctors to underserved neighborhoods or entice the medical schools to make primary care more attractive to students.
Let's talk about managed care.
Without a massive infusion of primary care doctors, all the problems of the present system - overuse of emergency departments, avoidable hospitalizations, long waits for treatment - will remain. Managed care will likely be successful in managing cost, not but care.
Still, I am a realist. I recognize that managed care is something we will have to live with. But we want safeguards built into the system, based on concerns that grow out of a project we are doing at CSS.
Enrolling in a managed care plan changes the way in which individuals use health care. Managed care systems have different points of entry into the system that require a change in the way one approaches the health care system. In order to use a managed care plan effectively and obtain the maximum benefits from that system, sometimes significant behavior changes are required from enrollees. Most New Yorkers, whether on Medicaid or privately insured, are unprepared for these changes.
The Community Service Society of New York launched its Medicaid Managed Care Education Project to begin educating Medicaid beneficiaries on how managed care operates. CSS sends trained volunteers to community-based organizations in underserved communities, offers workshops on managed care, and produces written material designed for low-literacy and culturally diverse populations. (And let me just plug this program. If your church or community group would like such a workshop, please contact us.)
To ensure that these workshops and materials address the most critical concerns of Medicaid recipients, and to understand how policy makers and health-care providers can meet the needs of this population, CSS surveyed Medicaid recipients about their use of health care services as well as their knowledge and experience with managed care plans. With the report set for release shortly, I can sketch its general conclusions.
We found that Medicaid beneficiaries do not understand the basic concepts of managed care and are therefore less able to adopt behaviors that allow them to benefit from the system. This lack of information can harm them. Managed care respondents - people already enrolled in programs - had no more knowledge about how managed care worked than did the fee-for-service respondents. Many reported having been told they had to sign up for a plan in order to remain eligible for Medicaid. That is not true!
Few knew about their plans' dispute resolution and complaints procedures. Plans fail to ensure that all enrollees obtain routine physicals. Many did not receive the recommended physical at enrollment or at any time since joining their plan.
Emergency departments were the most frequently cited source of care, even for those enrolled in managed care plans. Managed care respondents showed no fewer visits for asthma and other chronic conditions than did those in fee-for-service Medicaid. Managed care enrollees had no less difficulty getting medical care when they needed it than did fee-for-service Medicaid patients. Many cited being denied care in emergency departments, usually because they were enrolled in a health plan. Others had trouble receiving follow-up care after treatment in an emergency department because their health plan refused to cover the visit - suggesting that appropriate referrals for follow-up care are not being made for many health plan members.
This is a disaster! Unless strong educational initiatives are taken, the managed care system will be flooded with people who cannot benefit from it because they don't know how to use it. The private nature of these plans is a disincentive to turning the Medicaid public into educated consumers. Without a huge education campaign, managed care will promise more than it can deliver.
Now, let's talk about privatization. You knew I was going to get to this one.
As a member of the Health and Hospitals Corporation board, I've argued in the past that selloffs of city services are ideologically driven. Arguments in support of bringing in the private sector to run our hospitals have more to do with a minimalist notion of how government should operate than an appreciation of how the system can best serve those for whom it was designed. The benefits of privatizing medical care are dubious.
Ever since the mayor proposed selling off parts of the Health and Hospitals Corporation, many have sought proof that a privatized community hospital helps local residents. Despite requests from this and other board members, from members of the Coney Island community - the site that is on the block today - and from elected officials, no studies have been done showing how privatization benefits the city or the population using its hospitals. Comptroller Alan Hevesi said privatization would be justified if a private operator could offer better care at present costs, or provide present levels of care for less money to the city. Instead of showing how care can be improved and money saved, the city administration has taken the low road of attacking the public hospitals and the services they provide while glorifying the private sector. That is doctrine, not analysis.
In trying to break up the Health and Hospitals Corporation, HHC's board - the legally responsible governing body of the system - was excluded from the privatization process. We never discussed its merits. We did not participate in developing the request-for-proposals to recruit potential buyers. We took no part in the selection process, and we have not been privy to lease negotiations. The mayor conducted his own process in private, away from the scrutiny and oversight of the board and public.
That is why I joined board members Jim Dumpson and Diane Lacey-Winley in suing the mayor, former HEIC chair Maria Mitchell, the Health and Hospitals Corporation, and the Economic Development Corporation, to stop the privatization steamroller. We want the city to follow its own rules governing the procurement of services. These include a public RFP process, competitive bidding, and explicit criteria for evaluating competing bids.
Now, why should people here, or in other communities across the city, care about what the mayor is doing to Coney Island? And to Queens? And to Elmhurst, should deals to sell those facilities move forward? You should care because pain inflicted on the outer boroughs will be felt everywhere there is a city hospital. It will be felt immediately and sharply. Here's how:
There is also the threat to the well-being of everyone else if health care needs for a large section of the public are not met.
There is one final reason why people here should care about what happens to hospitals elsewhere in the city. It is a reason that touches on politics and empowerment. The precarious unity among the many city communities that rely on HHC for health care services will be shattered if HHC is cut down. While these communities are geographically disparate, they share many characteristics and needs. They have large concentrations of low-income residents who rely on public hospitals for their health care. Neighborhoods like Harlem, Coney Island and Jamaica also rely on their hospitals for jobs and economic stability. These are - and not coincidentally - communities that show little likelihood of supporting the mayor next year. Cutting hospitals in some but not all areas further divides the tenuous progressive coalition common to many poor neighborhoods.
So what do we do now? On getting more primary care physicians back into our poorest neighborhoods:
we should require that public funds spent training doctors be used to supply the kinds of doctors needed today. That includes not only primary care, but minority outreach programs that provide people from underserved communities the education they need to return to their own communities to provide medical services. That is the basis on which the CUNY Medical School was founded, and it is a good one. If medical education feeds from the public trough - it is, after all, financed in large part with public dollars and trains future providers who will receive public Medicare and Medicaid dollars as a major part of their pay - then why not ensure the system be socially responsible as well?
We should expand efforts like the Primary Care Development Corporation, six of whose projects have broken ground (including the most recent one in east Harlem), and some 30 of which are in development. By providing technical expertise, in planning as well as in obtaining access to capital, PCDC is making concrete strides in expanding primary care where it is most needed.
We should encourage the city and the state to monitor its own Medicaid managed care program to assess the adequacy of networks before allowing plans to "go live" (as the Health Care Finance Administration calls it) in poor neighborhoods. Unduplicated counts of providers, explicit provider to enrollee ratios, and random verification of appointment availability should all be incorporated into New York's program.
On Medicaid managed care, where education is abysmal and many plans seem to like it that way, here is the least we should do:
The city and state should require health plans to conduct on going member education to increase the Medicaid population's knowledge of the role of the primary care practitioner, how to get specialty care, and other aspects of how managed care functions. Current educational initiatives that are based on one-time orientations and dense member handbooks don't work. Plans should be required to offer community-based education, conduct health forums, and participate at health fairs to increase the general awareness and knowledge of basic primary and preventive health, independent of enrollment in any specific plan.
The city should also use its role as a purchaser of services to aggressively monitor the performance of plans holding city contracts. Monitoring should include member education, such as the current audit the city conducts on all new enrollments. It should monitor behavioral changes that we want to encourage, such as successfully linking enrollees with providers, actually providing preventive care services, and creating successful referrals from emergency departments back to primary care providers.
And on privatization, I have one recommendation. Just say No!