Charity Care Programs

CHARITY CARE IS AN INTUITIVELY ATTRACTIVE MODEL FOR ADDRESSING the health care needs of the medically underserved. The notion that practitioners can voluntarily provide “free” care to uninsured patients presenting with nonemergent problems—especially in rural areas—has met with widespread acceptance.1 Indeed, as the numbers of uninsured and underinsured Americans increase,2 such programs are proliferating and are receiving significant support from public and private funders. Both the Robert Wood Johnson Foundation and the Office of Rural Health of the US Health Resources and Services Administration (HRSA) have funded dozens of programs.

Traditional charity care—doctors directly dispensing needed care to individuals without charging for these services—is thought to be a common practice, even part of the physician s ethical and social contract with his or her community. (A promise to provide charity care is in fact part of the Hippocratic Oath.) Yet charity care has been criticized by public health practitioners at several levels. First, there is a significant degree of shame attached to the receipt of any kind of charity. Free or low-cost health care at the discretion of providers has the potential for being degrading to patients, given that at some point in the transaction begging essentially has to occur. Second, for the practitioner, there is an economic incentive to provide narrowly focused, episodic, and minimal care when there is no source of reimbursement. Thus charity health care is likely to suffer systemically from inferior quality Third, again due to economic imperatives, charity care is unlikely to fill existing health care access gaps. The disparity between the quantity of care offered and the medical care needs of the poor in any given community is so wide that charity care is ultimately ineffective. It is at best a well-intentioned gesture, unable to meet the magnitude of need that exists in underserved populations and therefore not a substitute for public health policy guaranteeing universal access to medical care.

In the traditional charity care model, physicians could shift costs from wealthier patients (or their health insurance companies) toward the poor by selectively writing off back “debt” for low-income patients and charging inflated fees to the well-to-do. Today, unlike in the days of fee-for-service reimbursement, cost shifting within the individual private practice is no longer tolerated by third party payers. This means that the true cost of “free” care is increasingly absorbed by physicians’ businesses, rather than being shifted to other patients or their insurers, as in the past (essentially spread across the other patients served by that practice). Thus, charity care, like house calls, now involves an economic sacrifice on the part of the individual physician.

Because of the general unwillingness of physicians to care for indigent and uninsured patients now that this means losses to their own incomes, todays charity care model has added a new element: an administrative, gatekeeping and case management function that is fragmented away from the actual delivery of medical care. This new element is seen by its proponents as necessary to leverage physician participation through minimizing the time expenditures (and therefore financial losses) of individual private practices.4 However, the inputs required to sustain this model and the benefits derived for underserved populations have not yet come under sufficient analysis.

Theoretically at some point the cost of delivering “free” care could exceed the cost of directly subsidizing additional medical care capacity in a community. If char¬ity care programs based on the new model are shown not to be cost-effective, the case would be particularly strong for subsidizing a model of proven efficiency and quality in caring for medically underserved populations, such as community health centers.

Charity care based on voluntarism on the part of comunity practitioners who do not otherwise meet their community’s needs, organized by administrative and gatekeeping entities, is promoted as a serious part of the solution to the problem of health care access for medically underserved populations. My own observations of Health Links, a local project in Franklin County, Massachusetts, leads me to conclude that this approach has limited utility in meeting the medical needs of medically under-served populations, is excessively costly, and provides fragmented, often substandard care for the poor. In our community, Health Links replaced the traditional model of informal charity care in many medical practices. Although it certainly altered the “flow” of patients unable to pay for health care, how much added value it delivered to the medically underserved remains open to question.

During the two year period 1995-1997, I served as a volunteer physician with Health Links and was a member of its advisory board. I was concurrently involved in a community organizing project aimed at the development and start-up of a federally funded community health center for Franklin County. This health center opened its doors in 1997 and has subsequently assumed responsibility for the primary care of all former Health Links patients.

Health Links was a conscientiously administered example of the new charity care model. As a participant, I directly observed the personal dedication of its staff, managers, and volunteers at close hand. As an advisory board member, I received copies of the projects monthly statistics and annual reports, which I analyze below. The data overall demonstrate that small numbers were served and that much of Health Links’ activities resulted in gate-keeping from rather than referrals to standard-quality care. The commitment of many community physicians to actually see patients without charging a fee was extremely limited, and did not increase over time. Finally, the project was quite costly overall.