Rising Number of Uninsured Is Causing Safety Net to Unravel

When Roland Palencia first arrived as executive director of the Clinica Monsignor Romero three years ago, about 10 to 15 new patients turned up each day at the nonprofit health center in a heavily Latino neighborhood just west of downtown Los Angeles.

Lately, the clinic has been inundated with 40 to 50 new patients a day -- gardeners, janitors, garment factory workers, all with health needs. And almost all without health insurance.

“Obviously, we are not able to absorb that kind of demand,” says Palencia, whose modest budget allows for only five doctors to staff the clinic on each shift. “What it means is sometimes we set an appointment three months later. Sometimes they have to wait to see if somebody who already has a scheduled appointment does not show up. They might not be seen until 3 p.m., even if they show up at 8 a.m. And these are not people who are there to receive an award; they’re in pain to start with. It’s not a comfortable situation to wait that long.”

For the U.S. health-care system, the lines at Clinica Romero are like the first waves reaching the shore as a storm approaches. The Census Bureau reports that in 2001, the number of Americans without health insurance jumped to 41.2 million, up 1.4 million from 2000. All signs point to a bigger increase this year. “I would be amazed if the number of uninsured in 2002 grew by less than 2 million,” says Dan Hawkins, vice president for policy at the National Assn. of Community Health Centers.

People without insurance still get sick, or hurt on the job, or hit by cars. And when any of that happens, they turn up, bloody or fevered, at the providers of last resort -- the public hospitals and nonprofit community health clinics that comprise the safety net for the uninsured. Sometimes they have to wait too long when they get there. Many times they see a doctor who has never met them before. But almost always they are treated, whether or not they can pay.

The providers of last resort fund this care for the uninsured through grants from federal and local governments, charitable contributions and the revenue they earn from treating patients who are covered under Medicaid or the Children’s Health Insurance Program or, more rarely, private insurance. But this safety net is unraveling under the pressure of the rising number of Americans without health insurance. The system simply can’t bear the weight of providing for so many individuals who have no means of paying for their care.

The experience of Los Angeles County offers a preview of what’s ahead for the safety net elsewhere if the ranks of the uninsured continue to grow. It’s not a pretty picture. For at least a decade, the county’s system of public hospitals and clinics has been on the edge of calamity.

The system is groaning under such enormous demand that emergency rooms are frequently forced to turn away arriving ambulances for lack of space. Yet funding shortfalls have forced the county to steadily retrench its services.

Only two bailouts from the Clinton administration prevented massive cutbacks in the 1990s. The county was faced with the prospect of closing trauma centers and two public hospitals -- the Harbor-UCLA and Olive View-UCLA medical centers -- until voters last month approved a ballot initiative raising property taxes to provide them with more money. And even with that, the county has been compelled to close clinics and downsize hospitals to save some $350 million. It will need to cut much further if the state and the Bush administration, which has been resistant, don’t cough up an additional $230 million in the next few months.

Mismanagement and bad decisions contributed to this perpetual crisis. As Jonathan Cohn recently wrote in a perceptive essay in the New Republic, the county system “evolved haphazardly, beset by corruption and inefficiency.”

But the core of the county’s problem is that it is being asked to treat an unsustainably large number of uninsured patients: At least 2.5 million people, more than one in every four county residents, have no health coverage.

“People say the county should be more efficient. You can do a better job managing,” says County Supervisor Zev Yaroslavsky. “Sure, we can all do a better job managing. But there is a structural problem. Clearly, the number of uninsured is paramount to all our problems.”

In the coming months, safety net providers around the country will face an even tighter squeeze. Payments from Medicaid, the joint state-federal health care program for the poor, provide the largest source of revenue for both public hospitals and community health centers.

But states are warning of “draconian” cuts in Medicaid as they try to dig out from deepening budget deficits. This means that even as the public providers are forced to offer more uncompensated care for the uninsured, they will face reductions in their most reliable source of revenue.

There are no inexpensive answers to these dilemmas. Washington could ease the sting of Medicaid cuts by providing states an emergency increase in funding for the program; the Senate voted to do that last summer, but both the House Republican majority and the Bush administration are leery. Bush is more enthusiastic about bolstering the 3,500 federally funded community health clinics, such as Clinica Romero; he wants to add 1,200 more by 2006, and in each of his first two budgets, he has invested significant dollars toward that goal.

Yet while the safety net providers clearly need more direct aid, in many respects that’s like buying a better Band-Aid. Even the providers themselves recognize that the system can’t be stabilized without guaranteeing more Americans access to health insurance.

“We deeply appreciate the president’s commitment to expanding primary care services,” says Hawkins, “but it should not be seen as a substitute for insurance coverage.”

Bush’s answer is a proposal to spend $90 billion on tax credits over the next decade to help the uninsured buy coverage. But at best that’s another Band-Aid. The tax credit is so much smaller than the cost of health insurance in most cities that most uninsured still probably couldn’t afford a policy. It’s going to take much bolder thinking -- and a lot more money -- to shorten the line of the uninsured anxiously assembling every morning in Roland Palencia’s waiting room.

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Ronald Brownstein’s column appears every Monday. See current and past Brownstein columns on The Times’ Web site at: latimes.com/brownstein.