For Oakland safety-net clinic, reform has helped but challenges abound

Walking through Oakland’s Fruitvale District can feel like visiting a foreign country. Signs in storefront windows beckon to customers in Spanish. Sidewalk food carts sell churros, tacos and tamales. Men in large sombreros may saunter past.

Here lives a population that has historically had little access to health care.

Since 1971, La Clínica de la Raza’s raison d’etre has been to provide care for this diverse, multi-ethnic community that includes Chinese and African Americans mixed among Latino immigrant families. But paying for that care has always been a financial puzzle. Until recently, many of the patients who sought treatments at its network of medical and dental clinics covering three Bay Area counties did not have insurance.

In theory, La Clínica is the kind of community clinic that should be benefiting from the Affordable Care Act. And in part, that’s true. Its population is shifting. More patients are now insured through Medi-Cal, the state’s low-income insurance program, or Covered California, the newly formed state insurance exchange. Yet its financial future is still precarious, according to Jane Garcia, chief executive officer of La Clínica de la Raza.

“Well, we’re certainly happy that the Affordable Care Act happened,” Garcia said. “(But) there’s a perception that all patients now have coverage and everything has been solved. And that’s really not the case.”

Covered California’s second enrollment season will end on Feb. 15 and La Clínica has pushed hard to enroll patients, many of whom qualify for subsidies. The effort has paid off. In addition to those now enrolled in Covered California, the application process identified patients newly eligible for Medi-Cal under revised rules that opens the benefit to all adults with incomes less than 138 percent of the federal poverty line, or $21,708 for a family of two. In addition, the La Clínica effort uncovered a hidden group — those who could have had Medi-Cal all along, but didn’t know it.

As a result, the clinic’s patient population has grown. But its uninsured population still decreased by about 10 percent. Before, those uninsured patients could often not pay even the sliding scale rates charge by La Clinica. But now those same patients, newly insured, are bringing in dollars for their care, Garcia said.  

You’d think all these newly insured patients would make the accounting department happy. And to some extent, it does.

“Getting more people covered and changing our payer mix does absolutely make a difference,” Garcia said.

But she admits the organization’s finances remain precarious. Many of its remaining uninsured patients are undocumented. At least right now, they do not qualify for federal or state programs.

La Clínica’s budget also depends on federal dollars — funds that are subject to the whims of Congress. Unless Congress renews spending in October for federally qualified health clinics such as La Clínica, it could have a big deficit. According to a new report from Capital Link, at least 25 percent of California’s federally qualified health centers “operate in a very vulnerable financial position, with operating losses and insufficient cash reserves.”

La Clínica’s budget is already tight. Two years ago, the clinic reported a $3.7 million loss in its annual report. In 2014, it just about broke even and is on track to do the same for this year. To manage expenses, it froze salaries and put in place an administrative hiring freeze that was only recently lifted.

La Clinica would hire more physicians if it could find doctors willing to work for lower salaries in an underserved area. But to control costs, it’s also purposefully kept medical staffing at less than ideal levels.

La Clínica has, however, invested in a new medical health records system. Even in the Bay Area, where Silicon Valley spits out new apps at a breakneck pace, health care is still behind when it comes to electronic medical records and connecting systems between hospitals and clinics. La Clínica’s new record-keeping system has been a costly investment, but one Garcia believes will ultimately streamline and improve care.

“Those are costs that nobody wants to pay for,” said Garcia. “But it is part of what I think will ultimately make a big difference, not only again in controlling costs, but in truly creating an integrated system.”

La Clínica’s delicate financial balance shows that despite the passage of the ACA, caring for the lowest-income populations remains tricky. Obamacare may be helping, but it’s not yet a cure. And while patients with insurance are better off, it’s not always easy to find the providers needed to serve them.

Photo by Eric Fredericks via Flickr.