Cities struggle to pay for health care - Reforming Health Care: State and Local Actions

Operating on limited resources, urban hospitals are being asked to treat growing numbers of indigent patients.

Many hospitals operating in the nation's cities are under siege. Beset by an enormous range of problems, most are struggling to care for the growing numbers of the poor and sick while they operate on dwindling resources.

Public hospitals, in particular, serve many city dwellers who have little or no insurance. According to the Employee Benefit Research Institute, in Washington, Medicaid is the primary source of health insurance for 16.4 million people in U.S. cities. Medicaid pays hospitals about 80 cents for every dollar of service, according to the American Hospital Association (AHA), in Chicago. Even worse is the fact that city hospitals care for the 27.5 million urban residents who have no coverage at all.

For many of the nation's urban poor, going to the doctor means showing up at a hospital emergency room. During the 1980s, for example, in Chicago, Los Angeles, and Dallas, emergency room visits increased by about 30%, according to the AHA. And because those without insurance do not typically seek treatment when their illnesses are still in early and more treatable stages, they tend to arrive at emergency rooms with symptoms that are more difficult and often more costly to treat.

Not only does the use of overcrowded emergency rooms for primary care result in interminable delays for sick patients. It drains already scarce hospital resources.

Impact of social problems

While the poor already represent a major proportion of those seeking care in city hospitals, their numbers are bound to increase. In September 1992, the U.S. Census Bureau released the latest statistics on Americans living below the poverty level. The number is 35.7 million, or 14.2% of the population--the highest poverty rate since 1964.

Many of the urban poor are also homeless. Today, according to the U.S. Conference of Mayors, in Washington, 35% of the homeless are families with children; one in every four homeless persons is a child. Fully one-third of the homeless are mentally ill.

AIDS is yet another problem that affects the poorest in U.S. cities. Experts say that as many as 30% of the people living in shelters for the homeless are infected with HIV, which causes AIDS.

Care of AIDS patients, in particular, has fallen squarely on public hospitals. The AHA estimates that only 20% of all AIDS patients ever had health insurance, and for those who do, significant shortfalls occur. Moreover, as the disease progresses, employment--with its potential for coverage--becomes even less likely.

The Rand Corp., a research organization based in Santa Monica, Calif., estimates that the lifetime cost of medical treatment for a 30-year-old AIDS patient is between $70,000 and $141,000. This compares with $67,000 for a heart attack patient and $29,000 for someone afflicted with leukemia.

The repercussions of poverty and homelessness on the health care system are staggering. Treating children and adults suffering from malnutrition, exposure, drug abuse, AIDS, and injuries resulting from violence is now part of the daily routine in urban emergency rooms throughout the country.

Due in part to the AIDS epidemic and to all of the social crises that perpetuate the cycle of poverty and poor health, American cities are experiencing a resurgence of tuberculosis. By 1985, the number of TB cases in the United States had declined to a low of 22,000. By 1991, there were 27,000 new cases. The American Lung Association predicts that unless major efforts are made to combat this new epidemic, there will be at least 50,000 new TB cases every year.

Hospitals as homes

In addition to being the primary care centers for patients with diverse and often multiple health problems, urban hospitals frequently become temporary homes for abused, neglected, or abandoned babies. The Child Welfare League of America and the National Association of Public Hospitals, both in Washington, conducted a study of so-called boarder babies living in hospitals in 11 cities. The survey, released in June 1992, revealed that caring for such babies, many of whom have been exposed to drugs and alcohol, costs these cities a total of almost $35 million per year.

While identifying the causes of urban health problems is relatively easy, finding solutions isn't. Moreover, as conventional sources of funding continue to shrink, public and private agencies, employer groups, and the hospitals themselves are challenged to find evermore-creative ways to cope with the crises they face. Unable to continue caring for the urban poor, some have been forced to close. Others have met the challenge of caring for the poverty-stricken and improving their health, while remaining financially viable.

"Nontraditional care in nontraditional settings" is how Ron Anderson, M.D., chief executive officer of Dallas Parkland Memorial Hospital, describes one of the ways in which his medical center tries to solve some of the pressing problems of urban health care.

In the mid-1980s, faced with the need to cut the costs associated with the growing use of the emergency room and the hospital's overcrowded clinics, Anderson, who is chairman of the Texas Board of Health, called on local universities, physicians, citizen groups, and a cooperative of existing clinics serving the poor to help devise an action plan.

The plan that evolved from their discussions is the Community Oriented Primary Care (COPC) program. The COPC program is similar to programs instituted in South Africa in 1948, in Israel in 1960, and in some rural U.S. communities during the 1980s.

The first part of the COPC approach is to identify the population considered at risk for a particular health problem. The second phase consists of developing a detailed plan to address that problem. Care is taken to remove cultural and social barriers that may exist for patients, such as problems with the language, or a fear or distrust of health care institutions. An interesting component of the plan is a system of financial incentives that are offered to those staff members who meet the stated goals of the particular program, as measured in health outcomes.

Dallas Parkland Memorial's commitment to bringing health care to residents in various parts of the city is shared by the local government, foundations, and corporations that do business in Dallas. Together, they launched the Homeless Outreach Medical Services Program. Under this program, mobile medical units seek out the homeless at city shelters and soup kitchens. Medical professionals provide front-line primary care, which includes immunizing patients, performing lab tests, and administering medications. A computer system helps to maintain medical records of the people who are treated at various sites so that providers can follow patients who move frequently.

Programs such as these "combine social justice and fiscal responsibility," Anderson says, adding that it would be "irresponsible not to run such programs."

A similar program in Los Angeles brings mobile radiology equipment to low-income residents. PacifiCare, a health care foundation in Cypress, Calif., that operates HMOs, and the Watts Health Foundation, which runs more than 20 health care programs in Los Angeles, joined together after the riots in South Central Los Angeles in the spring of 1992. They are building a mobile medical coach that will be outfitted with X-ray and mammography equipment. The program is specifically designed to address two problems of the urban poor: tuberculosis and a high mortality rate among low-income women who have breast cancer.

Employers pitch in

Joining city hospitals and clinics in the battle to provide better urban health care are businesses that draw much of their work force from urban populations. Via their support of programs that address a variety of intertwined social and health care issues, employers across the United States are trying to reverse what can appear to be the irrevocably downward slide in the health of city residents.

The partnership between John Alden Life Insurance Co. and Perrine Elementary School, both in Miami, is one of several corporate and school ventures in the Dade Partners program in Dade County, Fla. The relationship between the insurer and the school began in 1990. With overall goals of improving student attendance, grades, conduct, and self-esteem, the team has developed and implemented a comprehensive drug awareness program designed for students in kindergarten through fourth grade.

One part of the awareness program, says Barbara Epes, manager of employee and community affairs at Alden, involved organizing a schoolwide anti-drug poster contest. Other company activities include providing 50,000 copies of A Parents' Guide to Drug Abuse, Prevention, and Treatment to Florida schools and prevention organizations across the country and making peer counseling and substance abuse education available to Broward County middle- and high-school students.

Outreach projects such as these can require a substantial corporate commitment. John Alden's contribution to Perrine Elementary for the 1991-92 school year, for example, totaled more than $23,000 and over 2,000 employee hours. However, the company believes the investment will prove worthwhile. "First," says Epes, "as a good neighbor in the community, we believe that supporting outreach programs is the right thing to do." Less altruistically, she points out, is that "we're trying to prepare our future work force. It's very much our philosophy that it's better to support preventive, rather than rehabilitative, health care measures."

The Washington Business Group on Health (WBGH), an organization of large employers concerned about health care issues, in Washington, sees the trend toward employer involvement in urban health care as one that will grow. For example, one area of primary concern to WBGH member companies is the soaring cost of maternal and child health care. "Direct maternal and child health costs are frequently the single largest component of employers' health care costs," says Miriam Jacobson, director of the National Business Partnership to Improve Family Health, a WBGH project.

The total cost for a normal delivery, including hospital stay and physician services, averaged $4,334 in 1989, according to the Health Insurance Association of America, an industry trade association, in Washington. Those costs rose sharply in inner cities where lifestyle factors such as smoking, alcohol and drug use, and poor nutrition are often combined with little or no prenatal care.

WBGH designed the Business Partnership to Improve Family Health, a five-year educational program, to increase awareness of maternal and child health issues.

Employer efforts like the WBGH and John Alden Life Insurance Co. programs are still too new to be measured. But in the long term, what those in the private sector can do--and are willing to do--to improve the health of urban residents will likely benefit the entire U.S. health care system.

[Rita Shoor is a business writer who lives in Blythewood, S.C. Christine Hughes is a consultant in Chicago.]

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