California's Safety Net: The Role of Counties in Overseeing Care

Originally published by the Center for Studying Health System Change (HSC), a nonpartisan policy research organization that operated with principal funding from the Robert Wood Johnson Foundation.

California HealthCare Foundation Issue Brief -- December 2009

Authors: Laurie E. Felland, Aaron Katz, Johanna Lauer

Background: The CHCF-HSC California Market Study

In July 2009, the California HealthCare Foundation (CHCF), partnering with HSC, published six reports on regional health care markets based on site visits to California communities. The markets covered -- Fresno, Los Angeles, Oakland/San Francisco, Riverside/San Bernardino, Sacramento, and San Diego -- spanned a wide range of economic, demographic, health care delivery, quality, and financing conditions. CHCF followed up in December 2009 with four additional reports exploring specific health system themes that emerged from the broader six-market study.

County Government's Central Role in California's Safety Net

This issue brief examined how California's counties served as the primary organizers and overseers of safety net health care for uninsured and low-income residents. Unlike most other states, California placed extensive responsibility on county governments for financing and delivering health care to populations that lacked private insurance or eligibility for state and federal programs. County health systems operated public hospitals, clinics, and behavioral health services, and they administered local indigent care programs that filled gaps left by Medi-Cal and other public coverage options.

How County Safety Net Systems Varied Across California

The six-market study revealed substantial variation in how counties structured and funded their safety net operations. Wealthier, more urban counties like San Francisco had developed sophisticated systems with robust county hospital networks, extensive clinic infrastructures, and innovative programs like Healthy San Francisco that sought to provide coverage to all uninsured residents regardless of immigration status. Larger counties like Los Angeles operated massive public health systems -- including LA County + USC Medical Center -- that served as last-resort providers for millions of uninsured individuals.

By contrast, more rural or exurban counties like those in the Inland Empire (Riverside and San Bernardino) and the Central Valley (Fresno) often had fewer resources and less developed safety net infrastructure. These counties relied more heavily on federally qualified health centers (FQHCs), private charity care, and a patchwork of state and federal funding streams to meet the health care needs of their uninsured populations. The capacity of county systems to absorb demand varied enormously based on local tax bases, political priorities, and the availability of federal and state matching funds.

Financial Pressures on County Health Systems

The economic recession that began in 2008 placed heavy strain on county safety net systems across California. Tax revenues fell as property values declined and unemployment rose, shrinking the local funding available for health care services just as demand from newly uninsured residents was climbing. Counties faced painful choices about which services to maintain, which to scale back, and how to stretch scarce resources across growing patient populations. The recession also reduced state revenues, putting pressure on the Medi-Cal program and other state-funded health services that counties relied on to offset their own spending.

Looking Ahead to Health Reform

At the time of the study, the Affordable Care Act's Medicaid expansion and insurance exchange provisions were still several years from implementation. County safety net leaders were watching the reform debate closely, since a major expansion of Medi-Cal eligibility would shift many currently uninsured residents into public coverage and potentially reduce the burden on county-funded programs. However, counties also recognized that even after reform, significant numbers of residents -- particularly undocumented immigrants excluded from federal coverage expansions -- would continue to rely on county safety net services. The brief raised questions about how counties would adapt their roles in a post-reform environment and whether existing county infrastructure could handle the administrative demands of enrolling large numbers of newly eligible residents into Medi-Cal.

The full report was originally available on the CHCF website.

Sources and Further Reading

California HealthCare Foundation -- Funder and publisher of the California regional market studies.

AHRQ -- Federal health care quality research agency.

Health Affairs -- Peer-reviewed health policy research.

Robert Wood Johnson Foundation -- Health policy research and funding.