San Joaquin Valley: Despite Poverty and Capacity Constraints, Health Care Access Improves

California’s San Joaquin Valley is geographically and economically diverse. Known for rich irrigated farmland and agricultural output, the region is also home to Fresno, a city of more than 500,000 residents. Across the region, which spans the counties of Mariposa, Madera, Fresno, Kings, and Tulare, more than 20% of the 1.8 million residents have incomes below 100% of the federal poverty level (FPL). At the same time, there are pockets of affluence in the region, primarily in north Fresno, where providers vie for privately insured and Medicare patients.

In 2018, nearly half of the residents in the San Joaquin Valley were covered by Medi-Cal (44%), and 8% were uninsured. Despite the expansion of the safety net after implementation of the Affordable Care Act (ACA), including growth of Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs), the Fresno region continues to face problems with access to care, especially for behavioral health services, and struggles to recruit physicians and other health care professionals. The COVID-19 pandemic — which hit the region particularly hard, though later than the rest of California — has compounded these challenges.

The region has experienced a number of changes since the previous study in 2015–16. Key developments include these:

• While financial performance improved in larger hospitals, some independent hospitals struggled. Several smaller hospitals have struggled financially, leading one district hospital to close permanently and another to cede management to a larger hospital system after closing temporarily. Given the large and growing share of the region’s Medi-Cal population, almost all hospitals play a significant role in the fabric of the region’s safety net.
• While many physicians continue to practice independently in solo or small practices, some are choosing to affiliate with hospitals. The pace at which physician practices have aligned with hospitals has been slower than in other regions. However, the physician practice landscape continues to shift as financial pressures, market conditions, and demographics all combine to make independent practice less attractive.
• FQHCs and RHCs continue to expand across the region, sparking competitive tensions in some areas. FQHCs now provide services to more than half of the region’s Medi-Cal enrollees. Both FQHCs and RHCs are working with hospitals to improve care integration and access to specialty services for Medi-Cal patients.
• While several hospitals have taken a leap toward global risk contracts, the movement toward risk-based arrangements for other providers has been slow. Most providers are developing the infrastructure to manage risk-based payment, but the market, particularly for specialty care, remains heavily tied to fee-for-service (FFS) payment.
• Shortages of physicians and other health care professionals continue to plague the region, even with scholarships, loan repayments, and other recruitment incentives. Shortages exist across a range of specialties, notably psychiatry (especially pediatric psychiatry), dermatology, optometry, pain management, and orthopedics. The San Joaquin Valley’s relatively low rankings on a range of quality-of-life measures may inhibit recruitment and retention of clinicians.
• Data sharing among San Joaquin Valley providers remains challenging despite the presence of a health information exchange (HIE) serving the region’s two largest counties, Fresno and Tulare. While hospitals report participating in the HIE, many outpatient providers reported limited use. Barriers to adoption include perceived challenges of integrating practices’ electronic health record (KEHR) systems with the platform and a lack of staff resources.
• Access to mental health and substance use disorder services for Medi-Cal enrollees has been improving, though significant gaps in care remain. Inpatient psychiatric beds are in short supply. This shortage may be offset by a new 128-bed inpatient psychiatric facility slated to open in Madera County in 2023. County specialty mental health plans in the region have adopted more holistic approaches to addressing behavioral health needs, developing partnerships with health plans and adding new services.
• Health and income disparities, as well as other sociodemographic factors, have worsened the impact of the COVID-19 pandemic in the San Joaquin Valley. The area’s residents suffer disproportionately from risk factors, such as obesity and asthma, that can lead to worse outcomes if affected individuals contract the virus. The regional economy’s heavy reliance on agriculture and food processing may have softened the pandemic’s initial economic impact in the region but put workers at higher risk of contracting and spreading the virus.

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.