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  • 22 Oct 2014

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Clinics feel squeeze as Medicaid expands

Some doctors in short supply as Obamacare boosts public demand


With more low-income Medicaid patients crowding area emergency rooms, hospitals, clinics and doctors’ offices throughout the Portland area, doctors are trying to manage the increase while staying solvent.

Underlying the problem, say health officials, is a shortage of primary care doctors and specialists willing to add more Medicaid patients to their rosters.

“Primary care access is needed more than ever to take on these new patients,” said Julie Scholz, development director for the Portland-based Coalition of Community Health Clinics, a nonprofit network of 14 “safety net” clinics.

Last year, the clinics provided mostly free care to a combined 60,000 people without health insurance coverage. This year the coalition is adjusting its business model to take on people with federal Medicaid health insurance coverage who can’t find a doctor.

Coalition clinics also are seeing more people who have regular insurance but can’t afford the high deductibles, Scholz said.

The federal health care act, known as Obamacare, made more low-income people eligible for federally funded Medicaid health insurance by raising the eligibility level to $16,100 a year for an individual and $32,900 for a family of four. (Eligibility varies by state).

In Oregon, the expanded program has added an estimated 140,000 to 150,000 people to the Medicaid health insurance program this year. Clark County (Wash.) Medicaid enrollment is up by 19,000 with a total of 100,000 now qualifying for the program. Nationally, Medicaid enrollment stands at 65 million, up 6 million from a year ago.

Reimbursement versus charity care

While the increase in residents with some sort of health insurance has been welcome, the reality is that Medicaid provides only 40 cents of reimbursement to doctors and hospitals for every $1 of care provided.

Some health care officials say the increasing cost of providing care to Medicaid patients has more than offset a decline in losses from charity care write-offs.

“For Legacy, the expanded Medicaid coverage has helped decrease the amount of charity care we’ve provided,” said Brian Terrett, spokesman for Legacy Health System in Portland. “This increase (in Medicaid ER patients) is not a surprise. The problem is that primary care practices are at capacity and access is one of the big challenges.”

Legacy has seen Medicaid emergency department traffic at its five hospitals increase 7.8 percent this year over 2013 while Medicaid inpatient admissions as well as outpatient and clinic visits are up 33 percent. Last year, Legacy wrote off $196 million in charity care.

At PeaceHealth Southwest Hospital in Vancouver, Medicaid traffic to its emergency department has jumped 18 percent in January through May from the same time frame last year. The hospital also is seeing more people who have private insurance but with high deductibles. These patients can’t pay the deductible, so the hospital must decide whether to write off that debt as charity, said Tim Strickland, regional spokesman for PeaceHealth.

“The financial impact of all this is significant and not limited to the Medicaid situation,” Strickland said.

PeaceHealth also operates a hospital in Longview, Wash. where Medicaid patients now represent 25 percent of the total patient load, up from 20 percent last year.

The jump in emergency room use by low-income patients this year is contrary to what designers of the Affordable Care Act had hoped for. The goal was to get uninsured patients out of high-cost emergency departments and instead give them insured Medicaid care through primary care providers.

That hasn’t happened locally or nationally. In a recent national poll conducted by the ACEP American College of Emergency Physicians of emergency room administrators, 86 percent said they expected ER visits to increase in the next three years and that their ERs were not prepared for significant increases.

Primary care access

Meanwhile, many doctor-owned clinics have taken steps to limit their Medicaid patient load because they have reached maximum capacity and because of the money-losing aspect of providing that low-reimbursed care.

Last month, The Vancouver Clinic, with 190 physicians working at eight locations, announced that it no longer will accept new Medicaid patients because of the financial burden. In addition, the clinic hopes to reduce its Medicaid patient population from a current 25 percent to about 10 percent over the next several years.

Clinic administrator Duane Lucas-Roberts said “historically low reimbursement rates for serving Medicaid patients have made it increasingly difficult to provide quality care to all our patients in a way that is financial sustainable.”

This year, the Free Clinic of Southwest Washington saw a 35 percent decline in patient visits as more low-income Vancouver-area residents qualified for Medicaid and sought care elsewhere. Now the clinic, which operates urgent walk-in medical and dental clinics with 600 volunteers, including 125 health care professionals, is seeing a return of Medicaid patients who cannot find a doctor, said Barbara West, clinic administrator.

“We also are seeing people with insurance but with high co-pays who can’t swing it,” West said. “We changed our policy so we can serve these under-insured people who can’t get care (because they can’t afford the co-pay or the high-deductible).”

Looking ahead, West said the region’s health care system faces “enormous new challenges.”

“We’ve gone through Step One to get these people insured, but we didn’t think about whether they would be able to access care once they were insured,” West said. “We set people up to expect care. But with federal reimbursement rates for Medicaid and Medicare not going up even as the number of people in those two categories increases, how do we manage the cost of care? This requires a redesign of the health care delivery system.”

PeaceHealth’s Tim Strickland observed that the Portland-Southwest Washington region is not alone in facing the latest round of challenges.

“What’s happening here is no different than what’s happening all around the country,” he said. “There’s not a national solution, so we have to work together to find a local solution.”

Nationally, Medicaid enrollment is expected to annually increase 2 to 3 percent through 2024.