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As in many areas of the country, low-income people in Washington, D.C., face a number of challenges in obtaining health services delivered in a timely manner, in an appropriate setting, and with attention to continuity and quality of care. One barrier is financial; nearly 30 percent of nonelderly DC residents below 200 percent of the federal poverty level (FPL) are uninsured. Another barrier is availability; many economically depressed sections of the city are underserved by health care providers. Hospitals and clinics that serve the poor are experiencing some financial strain as competition among hospitals for paying patients continues to increase and Medicaid payments are held in check. The District's Medicaid program has for many years paid facilities relatively generous rates. In an effort to control what many perceive as a bloated program budget, the city has adopted new fee-for-service payment methodologies and instituted managed care reforms. From a fiscal perspective, the effect of these changes and others on the budget appears favorable; however, the outcome for safety net providers and Medicaid recipients remains to be seen. Some observers are optimistic that access to providers—whether traditional safety net providers or providers who mainly serve a commercially insured population—and continuity of care for the Medicaid population will be improved. Moreover, increases in Medicaid coverage under the Children's Health Insurance Program (CHIP) as well as other proposed coverage initiatives promise to alleviate some of the financial barriers to care faced by low-income persons in the District who are not currently enrolled in Medicaid. Simultaneously, safety net providers could witness a decline in the amount of uncompensated care they provide.
This report is an effort to assess the status of the health care financing system for the low-income population in the District of Columbia. It first focuses on the Medicaid program, beginning with an analysis of its spending levels and trends and efforts to control spending. Medicaid managed care, the most recent initiative adopted to make spending more predictable, is discussed next. Efforts to expand Medicaid coverage, including CHIP, are then described. This section is followed by a discussion of the safety net in the District and a section on the availability and financing of long-term care services. The report concludes with a summary of the major findings and a look at the challenges facing the District's health care sector in the near future.
The information in this report was derived from interviews with policymakers, providers, and consumer advocacy groups in the District and from written reports on District policies and proposals. The analysis of expenditures was based on data submitted by the District to the Health Care Financing Administration (HCFA) under HCFA forms 2082 and 64.
Overview of the District of Columbia
Washington, DC, is a diverse city characterized by extremes in wealth and poverty, multiple public health problems, and a unique government structure. Al though there are areas of integrated neighborhoods, the District is, in general, segregated along lines of income, race, and health status. The southeastern section of the city has the highest concentration of low-income persons and black persons, and the far northwestern section has the greatest proportion of high-income persons and white persons. The highest incidences of heart disease, infant mortality, and cancer are found in the southeast quadrant.
Demographics
The nation's capital is home to 570,000 people, 70 percent of whom are African Americans and 24 percent of whom are non-Hispanic whites (table 1). Measured against the composition of the entire country, Washington's population consists of smaller proportions of children, elderly, and noncitizen immigrants. While the country had a 5.0 percent gain in its census from 1992 to 1997, the District lost 9.5 percent of its population, a decline similar to those experienced in other large northeastern cities.
Government Structure
Governance of the District of Columbia has taken many forms since the territory was established as the U.S. capital in 1800. Congressionally dictated forms of government have included an elected council with a presidentially appointed mayor, an elected council and board of aldermen who elected the mayor, a governor and council appointed by the president, and a municipal corporation governed by three presidentially appointed commissioners. In 1973, Congress granted the city "home rule" and the right to elect a mayor and city council for the second time in its 200-year history. (From 1820 to 1871, the District was governed by an elected mayor and council.) In 1971, the District's right to elect a nonvoting delegate to Congress was reestablished for the first time since 1873.1 In local, congressional delegate, and presidential elections, the District shows an overwhelming preference for Democratic candidates.
Recently, the government of the District of Columbia has undergone yet another change. In 1995, in response to a looming budgetary crisis and perceived widespread mismanagement and administrative shortcomings, Congress gave authority over public spending to the Financial Responsibility and Management Assistance Authority, locally referred to as the Control Board. While the city's political structure of an elected mayor and city council was retained in form, the Control Board gradually assumed oversight of the administration of almost all city services, including the school system, the police department, and the Department of Health, effectively dismantling most of the city's home rule structure.2 Congress intends to disband the Control Board and restore governance by elected officials once the District achieves fiscal solvency. As a first step toward fiscal solvency, the federal government granted the District pension relief, tax breaks, and increased federal funding for certain programs, including Medicaid, under the District of Columbia Revitalization provisions of the Balanced Budget Act of 1997 (BBA), eliminating what officials had long felt were inequities in the original home rule provisions. In January 1999, a new mayor was inaugurated with a stated priority of addressing management and administrative problems.
Economic Landscape
The gap between Washington's rich and poor reveals itself in economic statistics. While the District ranks second highest in per capita personal income among the states,3 it also ranks third highest in overall poverty rates4 and highest in poverty rates for children.5 Consistent with the District's poverty rate, the unemployment rate in the city approached 8 percent in 1997, while the rate for the Washington metropolitan area as a whole was only 3.3 percent. The rate of growth in total personal income from 1992 to 1997 amounted to less than half the national average, which can be attributed in part to the shrinking population of the District. Growth in per capita income, however, matched the national rate (table 1).
One-third (33.1 percent) of the District's nonelderly population had family incomes below 100 percent of the FPL during the 1994-95 period,6 the highest concentration of nonelderly poverty among all the states; the poverty rate nationwide averaged a much lower 18.9 percent. More than half (53.9 percent) of the District's children lived in families with incomes below the FPL during that same period (a larger share than any state), compared with a national average of 25.7 percent.
The concurrent extremes of high per capita income and high poverty reflect, in part, the nature of the District, which is more akin to that of a city than a state. The District does not have the more homogeneous suburban and nonurban areas that in most states counterbalance the extremes often found in a state's urban areas. Nor does it have a state government to take on central functions usually not performed by cities alone, such as financing and management of the prison system or the Medicaid program, and regulation and oversight of businesses and health care providers.
Health Status
Washington struggles under the weight of numerous health-related problems. The infant mortality rate in 1997—12.1 deaths per 1,000 live births—was 70 percent higher than the national average (table 1). Although high, this rate represents a substantial drop from 19.6 per 1,000 in 1992 and 18.2 per 1,000 in 1994. The high rate of teen births in the city likely contributes to the high infant mortality rate; in 1995 there were 78 births per 1,000 females ages 15 to 17, compared with 36 per 1,000 nationwide.7 The number of AIDS cases per 100,000 people, at 189 in 1997, is nearly nine times the national average. Violent crimes, whose victims fill the city's emergency rooms, occurred at a rate of 2,470 per 100,000 population in 1996, almost four times the national rate of 634 per 100,000. A summary measure of the health of a population is the premature death rate, or the potential years of life lost before age 65 per 1,000 population. In the District, this figure was 120.9 in 1995, compared with 46.7 nationally.
Health Care Providers
The District has one of the highest numbers of primary care physicians (PCPs) per capita in the nation; nonetheless, a large number of its residents do not have adequate access to primary care.8 The PCPs are distributed unevenly across the city, and not all accept Medicaid patients. The Mayor's Blue Ribbon Panel on Health Care Reform Implementation reports that the more affluent parts of the city have more than three times the number of PCPs found in the poorer neighborhoods.9 It has been estimated that DC General Hospital and its eight neighborhood clinics, along with a collection of not-for-profit clinics, accounted for more than 50 percent of primary care furnished to uninsured DC residents in 1994. These clinics also serve an estimated 10 percent of the Medicaid population.10
Health Insurance
Washington has a large class of educated and well-paid professionals whose employers typically offer health insurance, but overall, employer-sponsored insurance is less prevalent in the District than it is nationwide. Only 57.8 percent of District residents received health insurance through their employers, compared with 66.1 percent nationally, in 1994-95. Yet among those who are employed, health insurance is much more likely to be offered as a benefit in the District than is the case in most states. Not only do the federal and District governments offer health insurance, but as of 1994, 66 percent of private-sector employers did as well—the second-highest rate in the country after Hawaii.11
The city also has one of the nation's highest percentages of uninsured persons and Medicaid recipients. In 1994-95, the proportion of people without health insurance in the District was 18.7 percent, compared with 15.5 percent nationwide. A similar proportion (18.9 percent) of District residents had Medicaid coverage, exceeding the national average (12.2 percent) by more than 50 percent. When only those below 200 percent of the FPL were considered, the District's uninsurance rate remained above the national average in 1994-95: 29.1 percent versus 25.3 percent. Medicaid coverage of the population below 200 percent of the FPL, on the other hand, is more extensive in the District (40.0 percent) than nationally (34.1 percent).
Washington's Medicaid Program: Overview
The DC Medicaid program is administered by the Medical Assistance Administration (MAA, formerly the Commission on Health Care Finance) of the Department of Health. The MAA is responsible for establishing policy regarding coverage and eligibility and for overseeing program operations and service delivery. Eligibility determinations and enrollment are the responsibility of the Income Maintenance Administration of the Department of Social Services.
In recent years the Medicaid program has suffered from serious administrative problems; some are particular to the Medicaid program, but many relate to the District bureaucracy as a whole. For example, a 1997 article in The Washington Post12 reported the Medicaid director's catalogue of deficits in basic office equipment and systems and in key personnel, such as auditors and programmers. Problems in the eligibility and enrollment process and in complying with Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) standards were so serious that in 1996 these functions were placed under court-ordered supervision.
The city's decisions about Medicaid program changes have been influenced most by two factors. The first factor is a financial constraint, which is a function of both the city's recurring budget deficit and the fact that, until recently, the city's federal matching rate for Medicaid was 50 percent. In the past year both of these constraints have been relaxed. A budget turnaround has been achieved through the direction of the Control Board and a diligent and aggressive chief financial officer during a period of strong economic growth. In addition, the federal matching rate for Medicaid was raised to 70 percent under the 1997 District of Columbia Revitalization provisions of the 1997 Balanced Budget Act.
The second factor in policy decisions is how changes in Medicaid will affect the city's public hospital, DC General, and its associated neighborhood clinics, known collectively as the DC Health and Hospitals Public Benefit Corporation, or PBC. The PBC serves as the provider of last resort for city residents and receives an annual city appropriation to support this function. It provides more than one-third of the uncompensated hospital care in the city. Medicaid is an important source of revenue for the hospital and its clinics, accounting for more than 30 percent of gross hospital patient revenue.13 It is feared that a loss of Medicaid patients would threaten the financial viability of the PBC and diminish its ability to care for the uninsured.
Notes from this section
1. District of Columbia Homepage, ci.washington.dc.us/HISTORY/history.htm, May 8, 1997.
2. "A City in Transition: The District of Columbia, 1967-1997." Washington Post, July 31, 1997.
3. G. Alampi (ed.). Gale State Rankings Reporter. Detroit: Gale Research Inc., 1994.
4. J. Delaker and M. Naifeh, U.S. Bureau of the Census. Current Population Reports, Series P620-201, Poverty in the United States: 1997. Washington, DC: U.S. Government Printing Office, 1998.
5. D.W. Liska, N.J. Brennan, and B.K. Bruen. State-Level Databook on Health Care Access and Financing, 3rd ed. Washington, DC: The Urban Institute, 1998.
6. Ibid.
7. "1998 Kids Count: A Profile of America's Children." Governing, vol. 11, no. 9, p. 47, June 1998.
8. National Association of Community Health Centers. Access to Community Health Care. Washington, DC: National Association of Community Health Centers, 1995.
9. Final Report of the Mayor's Blue Ribbon Panel on Health Care Reform Implementation. Washington, DC, February 1995.
10. Lewin/VHI, Inc. District of Columbia Health Sector Analysis Final Report. Fairfax, VA: December 28, 1995.
11. National Employer Health Insurance Survey. Centers for Disease Control and Prevention, National Center for Health Statistics, 1994.
12. P. Offner. "In the Belly of the Beast." Washington Post, June 29, 1997.
13. District of Columbia Hospital Association. Report on Financial Indicators, Fiscal Year 1996. Washington, DC: District of Columbia Hospital Association, 1997.
Note: This report is available in its entirety in the Portable Document Format (PDF)
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