Fresno: Health Providers Expand Capacity, but Health Reform Preparation Lags
The Fresno region remains one of the poorest areas in California. With the economic downturn, Medi-Cal enrollment rates have been driven even higher than in prior years, and the proportion of the population with no insurance has continued to expand. The population has continued to grow, although at a slower pace than during the early 2000s. These factors have strained already inadequate provider capacity, particularly of physicians.
Key developments since the last study was conducted in 2008 include:
- Focus on inpatient capacity. Hospitals are expanding inpatient beds and services to ease overall capacity constraints and to compete aggressively for the shrinking base of commercially insured patients. Most hospitals weathered the economic downturn, although they continue to face financial pressures.
- Little traction on hospital efforts to align with physicians. Hospitals are making efforts to align more closely with physicians, including developing medical foundations to compete more effectively with other provider organizations in recruiting physicians to the area. Most physicians, however, continue to work in independent solo and very small practices and show little interest in hospital alignment efforts.
- Expanded clinic capacity still falling short of demand in underserved communities. Federally Qualified Health Centers and hospital-operated rural health clinics (RHCs) are expanding capacity and improving patient access, although demand still outstrips supply. As a result of these expansions, competition for Medi-Cal patients in rural areas is heating up, and competition to recruit physicians across the region is growing more intense.
- Limited preparations for national health reform. The region trails other areas of the state in preparing for coverage expansions under reform. Fresno County is one of only a few California counties that have not yet committed to participating in the Low Income Health Plan (LIHP), an optional county program to provide health care services to low-income, uninsured adults and to transition most enrollees to Medi-Cal once they become eligible in 2014.1 The second-largest county in the region, Tulare, will get a late start, launching the LIHP in January 2013.
A defining characteristic of the Fresno market remains unchanged since 2008: Health maintenance organizations (HMOs) play a much more limited role in the region than elsewhere in the state. For example, Kaiser Permanente Health Plan, a large, closed-model HMO, maintains only a modest presence in the Fresno area even as it has strengthened its competitive position in many parts of the state in recent years. As in the rest of the state, total HMO enrollment continues to decline because of competition from lower-priced preferred provider organization (PPO) products — including lower-premium, consumer-directed health plans — and the overall erosion in commercial coverage from the economic downturn. As a result of the relatively limited role of HMOs, health system features that typically develop in tandem with HMOs, such as large physician organizations operating under the delegated-capitation model, are uncommon in the market.
Since 2009, CHCF has published a series of regional market studies that examine the health care markets in specific regions across California. These studies highlight the range of economic, demographic, and health care delivery and financing conditions in California. They are published as part of the CHCF California Health Care Almanac, an online clearinghouse for key data and analyses examining California’s health care system.