PROVIDENCE – On late Thursday afternoon, April 4, as members of the R.I. House Committee on Oversight demanded answers to questions about questionable expenses of millions of dollars in Medicaid disbursements as identified by the auditor’s report on the Unified Health Infrastructure Project, or UHIP, ConvergenceRI found himself in the waiting room of Clinica Esperanza/Hope Clinic, deep in the heart of Olneyville, surrounded by a multitude of patients and families, representing three generations.

Everyone was waiting to be seen by a volunteer physician, a nurse practitioner or a navigator, to receive what was not readily available to them anywhere else in the health care delivery system: a continuum of care for the uninsured or under-insured, with providers who could converse with them in their native language.

ConvergenceRI was there to talk with the volunteer medical director and founder of the clinic, Dr. Annie De Groot, who in her day job, serves as the CEO and CSO of the biotech firm she founded, EpiVax, Inc.

At first, the connection between the two events might not appear obvious: efforts by government to contain the ever-increasing costs of Medicaid coverage, through a glitch-ridden software system built by Deloitte, compared with efforts to deliver free care in a volunteer-run clinic and save money by avoided emergency room visits.

Where the glitchy UHIP system has floundered, the Clinica Esperanza/Hope Clinic model has succeeded, providing a continuity of care to some of Rhode Island’s most vulnerable residents, with a proven record of cost-savings and improved outcomes.

Cutting health costs as a national priority
The mantra for most of the conversation around health care reform, proposals for a single payer system, or a Medicare For All platform, has been how to achieve cost savings while achieving better health outcomes.

One of the frequently cited lowest-hanging targets in many cost-saving proposals is how to cut down on the number of unnecessary emergency room visits and the costs of what is known as charity care – what some business groups have promoted to patients “choosing wisely” about health care.

But where will the money come from to invest in models of care that can save money on unnecessary emergency room visits? Is it by improving access to emergency care and urgent care on weekends and after hours, with incentives paid to physician groups that can show such results? Is it by adopting expensive health IT systems to manage the entry point of the state’s benefit system? Is it through making work requirements a condition of Medicaid?

The reality is that the people most dependent on emergency room care are often the people who are uninsured or underinsured; without the ability to access care in their own neighborhoods, the likelihood is that they will continue to go to emergency rooms.

What cheer, Netop?
The phrase, “What cheer, Netop,” [or friend in Narragansett], considered a turning point for Roger Williams in his negotiations with the Native American tribes in the founding of Rhode Island in 1636, has a modern-day equivalent.

The Clinica Esperanza/Hope Clinic Emergency Room diversion initiative, or CHEER clinic, is a nurse-run ambulatory care center for only uninsured patients, featuring walk-in appointments and short wait times.

The CHEER clinic has served as an alternative to visits to the emergency department for the low-income, predominantly Hispanic population in Providence since 2012.

The CHEER clinic has proven to be a valuable source of ambulatory health care for adult uninsured patients experiencing non-emergent medical conditions. An evaluation of the CHEER program during a four-year period demonstrated a positive return on investment, both in terms of avoided emergency room visits and the value of chronic disease diagnosis, prevention, and treatment [measured in quality-adjusted life years].

“We love this work,” said De Groot, in a recent interview with ConvergenceRI. “We’re happy to do this work. But, we can’t do it on air,” lamenting the lack of institutional support, particularly from hospitals, for her clinic.

“That’s the dynamic that I am dealing with here,” De Groot continued. “We need to have funding to continue to do the work that we are doing here, to see people who need what’s known as preventable emergency room care visits. They don’t have an emergency, they just need to have somebody to look at their scrapes and their bruises and their sore throat. We’re happy to do this work, but we can’t do it on no money.”

Crunching the numbers
The conversation between De Groot and ConvergenceRI centered on the difficulties of finding financial support for the work being done at the clinic, which recently quantified that, for the four years, between January 2013 and December 2016, providing access to health care services for uninsured patients at Clinica Esperanza/Hope Clinic had reduced emergency department expenditures in Rhode Island by approximately $448,875.

Further, the analysis found that Clinica Esperanza/Hope Clinic might have also reduced future health care costs for this population by a total of more than $48 million over the four-year evaluation period.

The rub, it seems, is that it is difficult to quantify the way that hospitals spend what’s known as Medicaid Disproportionate Share Hospital Payments, or DSH payments, made to hospitals for uncompensated charity care. There appears to be no clear forensic accounting in place to document exactly how the DSH payments, are spent on care, according to sources.

What is happening, De Groot explained, is that I am knocking on all the doors in the state, seeking ways to fund Clinica Esperanza/Hope Clinic. “If we can see uninsured adult patients, and connect them to care, and get them into to see a primary care doctor, or an internist, or a family doctor, wouldn’t that be a better scenario?”

But, she continued, “When I knock on all the doors in the state, everyone kind of shrugs their shoulders.”

That conundrum was what De Groot wanted to talk about. Here is the interview with Dr. Annie De Groot, founder and volunteer medical director at Clinica Esperanza/Hope Clinic, on Valley Street in Olneyville.

ConvergenceRI: Why do you believe it is so difficult to find out what happens with DSH payments to hospitals?
DE GROOT: It is federal money. And, it must come into the state, and I am imagining that it goes into the state budget. And, that it is looked over by the Governor’s office. Presumably it’s under the care of R.I. EOHHS. So, presumably, people at R.I. EOHHS would know.

We do know that those payments go the hospitals for what’s called charity care. And, that, theoretically, because of Obamacare, the amount of money was going to decrease.

I’m imagining, and I don’t have any evidence for this, but I am imagining, [hypothetically], that if I were a hospital, I would say: this is how much emergency room care costs. Say it’s a $1,000. And that’s what we are going to charge against the DSH payments. We are going to say, [hypothetically], we saw 100 patients for $1,000 each, which is $100,000.

But, what if it actually it costs them $350 to see the patient? I’m imagining that there may be a profit there that they don’t disclose, and that they use [the difference] to fund their operations.

Because, if I were a hospital, that’s what I would do. I mean, it seems like a way of doing business.

ConvergenceRI: What has been the response when you have approached hospitals?
DE GROOT: What happens is that when you go to the hospitals, and say: we’re saving you $500,000 a year, which we’ve documented in the article we’re going to publish this month, and ask: How about if you give me $200,000 to run my clinic? They say that money doesn’t exist.

Why do they say that money doesn’t exist? To me, I can’t understand that.

[From my vantage point], I believe, but I do not know for sure, that the money they spend on charity care is not money from their bank account [being used] to pay for emergency care.

ConvergenceRI: What do you mean?
DE GROOT: What I suspect, [although I have no proof], is that they are really taking the cost of that charity care and putting it against the “profit” they are making.

By taking the full “rack” rate of the charity care, as I would call it, putting it against the “profit,” they show a very minor profit margin, if they do at all; they probably show a loss.

ConvergenceRI: Is it a hard message to get people to understand?
DE GROOT: I really do think that it’s worth asking the hospitals how they do their finances. They are not public institutions, so it’s not like you can really do that.

If you could get at how much the hospitals are actually spending on uncompensated care, how much DSH money they get, and how much the charity care actually costs, [you might get some answers.]

Please show us that you are actually somehow losing money on this; we think that you may be actually making money on this.

And, in addition, I think that some of those costs may actually be distributed to other payers, to insurance companies for example.

If there is a cost to that charity care, then presumably, what they may be saying to [to a health insurer] is: hey, in order to operate as a hospital, we have this kind of overall cost that we have to pay, it’s the rent, the heat and the electricity, it’s the charity care, so you must give us this much money for a patient visit, of which we know that $50 or $100 for a patient’s visit is going to go to covering uncompensated care.

ConvergenceRI: What is the reason why this kind of scrutiny is important?
DE GROOT: It is a taxpayer issue. And, it is better to provide patients with a continuity of care in a clinic that is willing to accept them.

In other states, hospitals support free clinics, they provide financial assistance to free clinics to take care of patients who are what might be called “charity” cases. And, free clinics are happy to do that; that’s what we are here for. We love those patients.

That’s the dynamic that I am dealing with here: we need to have funding to continue to do the work that we are doing here, to see people who need what’s known as preventable emergency room care visits. Wouldn’t that be a better scenario?

At this point, with the Governor’s initiative on cutting costs in health care, to me it seems like, some of the fat in that budget may be absolutely be costs related to charitable care that could actually be better spent in the free clinics that already exist in the state, for my clinic and the Rhode Island Free Clinic, providing a continuity of care instead of sporadic, interrupted care.