President Barack Obama’s health care reform efforts accomplished his key goals of expanding health insurance coverage, reducing costs, and providing greater stability of coverage for Americans.[1] This has been a step in the right direction, as studies show that health insurance coverage status is a leading predictor of access to care.[2] These positive steps, however, have not solved the problems of access for many poor Americans or corrected the health disparities that persist in our nation. Specifically, it is increasingly difficult for Medicaid patients to obtain care despite coverage expansions, and the facilities that care for the poorest Americans are endangered as market pressures threaten their survival.

Health care reform in 2010 included expansions of Medicaid coverage by increasing the income thresholds for eligibility and increasing federal subsidies to states. Approximately two-thirds of uninsured individuals were low income, and research showed that strengthening Medicaid through increasing provider payments would improve access without creating a new infrastructure for the low-income uninsured.[3] Unfortunately, this expansion fell short by not addressing the administrative burdens that discourage physicians from Medicaid participation. These burdens, which include payment delays and rejections, can counteract the positive impact of higher reimbursement.[4] In their study of factors affecting physicians’ decisions to treat Medicaid and charity care patients, Peter Cunningham and Jack Hadley cite data from the Community Tracking Physician Study that shows that the number of physicians seeing Medicaid patients and providing charity care has been declining since the mid-1990s. Simultaneously, physician income has been stagnant.[5] Declines in income decrease the likelihood of physicians accepting new Medicaid patients but have no effect on providing charity care—this indicates that physicians (especially in small practices) may not want to deal with the bureaucratic hassles that accompany Medicaid participation.[6] These results do not bode well for the current Medicaid expansion. Prior to health reform, experts estimated that coverage expansion would add approximately 17.1 million formerly uninsured individuals to Medicaid (roughly 37% of the uninsured population).[7]

An influx of uninsured individuals to Medicaid has not only worsened access, but has exacerbated health disparities that persist along the lines of income and race.[8] The history of Medicaid, and of care for the underserved generally, has shown that poorer patients are often isolated in an inferior, “second tier” of health care.[9] A survey by James D. Reschovsky and Ann S. O’Malley showed that physician practices treating a high number of minority patients and were dependent on Medicaid funds for a significant portion of their revenue experienced more quality-related difficulties than those in practices with a lower proportion of minority patients. These practices reported problems with care coordination and being able to spend adequate time with patients.[10]

This pressure is also felt by hospitals that care for large numbers of Medicaid, uninsured, and minority patients. Safety-net providers are not immune to competitive pressures. In a profit-driven health care environment safety-net hospitals must adopt the practices that other facilities are using to survive—concentrating on profit-generating services and scaling back in areas where reimbursements do not adequately cover costs.[11] This situation, when combined with the difficulties that Medicaid patients experience when seeking care from private physicians, illustrates the contraction in available services for the poor. Improving access to primary care services that generate low profit such as pediatrics, geriatrics, and mental health is critical in erasing health disparities. In contrast with higher-margin specialty services, primary care is linked with a more even distribution of health in populations.[12]

In addition to this squeeze on services, safety-net hospitals face challenges of technology, personnel, and plant that compromise their ability to provide high-quality health care and further deepen health disparities. Although health reform and the 2009 American Recovery and Reinvestment Act contained incentives for hospitals to adopt electronic health records (EHRs), there is evidence of a “digital divide” between hospitals that care for large numbers of poor patients and those that do not. While these hospitals also performed poorer on quality measures, those that had EHRs were able to close the gap in quality.[13] Hospitals with concentrations of poor patients also have trouble planning for the future because of difficulty obtaining capital for needed improvements and struggles in retaining staff. The recession that began in 2007 forced many hospitals to delay capital projects to improve their aging facilities, and many reported pressure to control labor costs through layoffs and wage freezes.[14] Economic insecurity robs these facilities of the ability to build the infrastructure that would allow them to provide consistent high-quality care, plan for the future, and improve the health of the underserved populations that they serve.

There are key steps that can address these problems. First, an expansion of Medicaid must come with a reduction in the administrative burdens that accompany program participation. Although reimbursement levels will not match those of private insurance, a simplification of the claims process would lessen the opportunity costs for physicians taking Medicaid patients and ease access. Additionally, to address both problems of access and disparities, the primary care physician workforce should be strengthened through loan forgiveness for students who choose careers in primary care, and reimbursement incentives for the currently under-valued work of care coordination. Finally, to offset the financial pressures faced by safety-net hospitals, Medicaid disproportionate share hospital (DSH) payments (which have been flat since 1998[15]) must increase to provide greater financial security to these facilities so they can invest in infrastructure improvements and improve the health of their communities.

While President Obama’s efforts to increase coverage have eased the burdens of many Americans, the access problems and health disparities that persist among underserved populations must be addressed. Without taking these necessary steps, the inequities that that plague our system will continue to grow and vital safety-net providers may be driven to the breaking point. If the promise of health reform will be fulfilled, then the most vulnerable members of our population must not be forgotten.