COORDINATED HEALTH SYSTEM of JEFFERSON COUNTY

Birmingham, AL

April 2000

        §       Background  

In late 1996, the Council for a Coordinated Health Care System was created to address concerns about charity care in Jefferson County, Alabama.  The Council's members, representing virtually all of the private and public healthcare providers in the county, agreed that the system of care needed to refocus on preventive and primary care services rather than predominantly on inpatient and emergency services.  The redesign of the system was seen as critical both to improve healthcare outcomes and to control costs.  

Through Council activities over the next two years five lessons emerged:

• The uninsured use a variety of public and private providers for care, but in a poorly coordinated manner.

• There is a broad-based willingness to develop public-private partnerships that facilitate access to care for the uninsured within the limitations of current resources.

• For a coordinated system to work a reimbursement and recognition system for private providers is crucial to the long-range success of the public-private partnerships.

• Identifying those persons with the greatest healthcare needs is the strategy most likely to garner political and provider support and to show success.

• Coordinating the work and ideals of the Council with the Medicaid program offers a mechanism to insure additional resources into the system.

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§       Guiding Principles

The Guiding Principles which emerged from the Council for a Coordinated Health Care System and which will govern and design strategy of the Jefferson County Healthcare Authority are:

• The healthcare system should improve the health status of the residents of Jefferson County.

• The system should integrate Medicaid and the Indigent Care Fund.

• Both public and private healthcare organizations should participate in the system, but no provider should be financially over-burdened.

• The system should emphasize community-based preventive and primary care.

• Every eligible person should have a medical home which coordinates and manages their care.

• Persons with special healthcare needs should have access to services to meet their needs.

• The system should ensure adequate primary care capacity.

• Responsibility for developing primary care capacity rests in the public sector.

• No additional county resources should be required to operate the system of care.

• All participating providers should accept appropriate, reasonable and equitable risk.

• The integrity of the safety net in Jefferson County should be maintained.

• Governance of the system should reflect a balance of essential community providers, private providers and consumers.

Financing Strategy

Jefferson County is the only county in Alabama that levies a tax specifically to meet the healthcare needs of "those who afford none or only part of the costs of their healthcare."  The sales tax generates approximately $84 million a year, approximately $37 million is for the Indigent Care Fund (ICF) and $14 million in direct subsidy to the Jefferson County Department of Health (JCDH).  The Jefferson County Commission oversees the ICF as part of the Cooper Green Hospital budget.  The ICF provides half of the operating budget for Cooper Green and provides specific services at the Jefferson County Department of Health, Children's Hospital and UAB.  Monies from the ICF are not used to offset uncompensated care costs in the private sector.  The need for a reimbursement system for private providers, principally specialty physicians was clearly identified following the opening of the Bessemer Northside Community Clinic.  This primary care practice opened as a partnership between Bessemer Carraway Medical Center (BCMC) and Jefferson Health System (JHS) as a direct outgrowth of the Council's activities.  In this partnership agreement, JHS support 1/2 of the family physician's compensation package so that 1/2 of the practice is comprised of uninsured persons.  BCMC and its medical staff agreed to provide specialty referral care, diagnostic services, emergency care and hospitalization as their community charitable contributions.

After approximately 14 months of operations more than $1.4 million in physician and hospital charges have accumulated from the Bessemer Northside practice.  The private physicians have become increasingly vocal about the magnitude of their contributions without compensation especially when physicians in the public sector are paid for services rendered.  From this tension has come the realization that a formal reimbursement system must be developed and adopted if this partnership is to service and others to develop.  In Phase One, the Authority will work with staff at Blue Cross/Blue Shield of Alabama and actuarial consultants to create an appropriate and reasonable reimbursement methodology for the private providers.  The initial focus of this work will be outpatient care, but will subsequently address inpatient services.

A Charity Trust Fund is proposed to cover a portion of services not directly provided through the primary care infrastructure of the system.  The Charity Trust Fund will be established through an annual contribution from the Indigent Care Fund, but could also receive other funds, such as from a proposed local hospital conversion.  Ultimately, the Authority will secure a Section 1115 waiver that will allow a completed integration of Medicaid with the County funded programs.  It will be the responsibility of the Authority during Phase One to develop a formal proposal for the Charity Trust Fund and ultimately this fund would be administered through the Authority.

Outreach Strategy

A focus on enrollment will be an essential feature of the system development in Phase One.  Jefferson Health System, the Jefferson County Department of Health, and Children's Hospital have agreed upon a unified procedure for determining eligibility and enrollment for subsidized services.  These organizations are foregoing a new co-payment structure that incorporates a full accounting of services of each visit or encounter, including the intensity of physician services.  The Authority will implement the procedures that the co-payment system as well as monitor the effectiveness of the structural changes in the system.  In addition, one of the important lessons from the Council's work is that "building it" doesn't mean "they will come."  Developing a system that tries to enroll all the uninsured in Jefferson County is unrealistic within the limitations of existing resources.  Furthermore, local experience with Jefferson Health System's HMO for the uninsured (The Community Care Plan) and experience with the Children's Health Insurance Program suggests that encouraging uninsured persons to enroll in an insurance program, regardless of its economic merits is a near fruitless task.

Identifying persons with chronic healthcare needs and enrolling them in a coordinated system of care is locally realistic and politically desirous to politicians and providers alike.  The archeology of bad debt and charity care is selectively mining bad debt and charity care records from hospital and physicians to identify persons with chronic illnesses who without doubt will benefit from enrolling in a subsidized and coordinated system of care.  The Authority will develop the archeology of bad debt with Blue Cross/Blue Shield coincident with the development of the reimbursement system discussed earlier.  By using existing provider data to identify the individuals who are using the system but who are not insured, we will be able to actively determine likely enrollees into a system of coverage.

Delivery System

Jefferson County will be divided into five Network Service Areas reflecting current utilization patterns.  Each Network Service Area (NSA) will consist of primary care physicians, specialists, support services, and hospital's.  The uninsured will be actively enrolled into the system, select a primary care provider, and become part of the NSA.  The public sector, i.e. Cooper Green Hospital and the Jefferson County Department of Health, will be responsible for developing the primary care infrastructure along with an appropriate mix of specialty and diagnostic services.  Medical management of persons enrolled in the system will be consistent with managed care principles, i.e., primary care orientation, health promotion and pre-approval of referrals.  The NSA system will be the key focus in the initial establishment of networks and strategy for care delivery by the Authority.  In addition, Disease management Networks, will target conditions that are high cost, require an extensive specialty management, and/or have the potential for significantly improving health outcomes for the illnesses.  HIV/AIDS, Asthma, Diabetes and Sickle Cell Disease are the areas that are already in development and would be enhanced through the Disease Management Network.  The Disease Management Networks will build on the referral and patient-tracking relationships.

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§            §   Challenges

Along with the primary hurdle of financing, an additional hurdle is the maintenance of the working relationships among providers established by the Council.

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§            §   Demographics

Jefferson County is Alabama's largest county with a population of 658,000 (1997 Census estimates). Approximately 70% of the county residents are white, 29% are African American, 0.5% is Hispanic and 0.5% belongs to other ethnic groups. A community wide evaluation of health insurance status conducted in 1997 showed that approximately 225,000 Jefferson County residents were uninsured at some time during the previous year. HealthWatch also revealed that more than 250,000 persons delayed seeking necessary medical care primarily because of lack of insurance and 48,000 persons were actually denied medical care because they did not have health insurance or were unable to pay the bill. These remarkable numbers are in addition to the 43,000 residents who received Medicaid, approximately 35,000 children and 8,000 adults