Overview
The health care safety net encompasses a broad patchwork of institutions, services and financing mechanisms that vary considerably across the country and that aim to provide health care to underserved populations, including individuals who are uninsured or low-income. It is comprised mainly of public hospitals; private not-for-profit hospitals that serve a disproportionate amount of underinsured or uninsured patients; federal, state and locally-supported community health centers (CHCs); and local health departments. Several smaller service providers, such as family planning clinics, school-based health programs, and Ryan White AIDS programs are also considered part of the safety net.[1]
These providers serve the uninsured, low-income underinsured, and a sizable proportion of Medicaid beneficiaries who comprise the population in need of a health care safety net – in 2007, nearly 40% of safety net patients were uninsured and more than 45% were Medicaid, Medicare, SCHIP or other public insurance beneficiaries.[2] Many of these individuals are minorities and immigrants and live in communities that are economically challenged or rural.
This module will focus on the two main providers: community health centers and safety net hospitals.
Community health centers (CHCs), launched in 1965 as part of the War on Poverty, have become a vital component of health care access for the medically underserved. The CHC program is administered by the Bureau of Primary Health Care in the Health Resources and Services Administration (HRSA) of the Department of Health and Human Services. The federal government determines where health centers may be located and sets requirements for the services provided. These centers are also called Federally Qualified Health Centers or FQHCs.
Health centers deliver a wide range of services set by the government, including preventive, diagnostic and laboratory services, dental care, case management, and health education [3] They also provide a combination of comprehensive medical and enabling or “wraparound” services (e.g. language translation, transportation, outreach, and nutrition and social support services) that target the needs of vulnerable populations.[4]
Today, there are more than 1,000 health centers across the country, which serve an estimated 16.3 million people, mostly uninsured or covered by Medicaid or SCHIP.[5] Patients who are uninsured pay according to a sliding scale based on their ability to pay. In recent years, the number of health center sites has increased dramatically, up 58% from 1997 to 2004; the number of patients increased 90% over the same time period.[6] Although federal funding for federally qualified community health centers has increased, much of this money has been devoted to building new health centers in additional communities, and support for existing CHCs has not kept pace with patient growth.[7] CHCs often are understaffed and have limited resources for providing medication, specialized treatments or long-term care.[8]
Health centers rely on a mix of revenue sources that include Medicaid, federal grants, state funds, contributions from local and philanthropic organizations, other third party sources, patient payments and Medicare. The combination of unprecedented growth in health center patients with dwindling operating budgets has strained community health centers, a vital source of health care for those who are un- or underinsured.
Safety net hospitals include more than 1100 public and non-profit hospitals that provide a disproportionate amount of care to low-income and uninsured patients. Many of these hospitals function as the sole source of hospital and specialty care for the populations they serve; additionally, they often are the main source of outpatient services for their communities and they operate outpatient pharmacies that provide free or reduced-cost pharmaceuticals.[9]
In particular, emergency departments of all hospitals often serve as sources of specialty care for uninsured or underinsured individuals who cannot receive this care in a CHC. Under a federal law called the Emergency Medical Treatment and Labor Act (EMTALA), all hospitals that participate in Medicare must furnish screening and necessary stabilization services to all who enter the hospitals’ emergency department. However, the law does not require emergency departments to provide care for those who do not have an emergency condition, defined as a condition that threatens a person’s life or long-term health, and these patients often are sent to public hospitals after they are stabilized.
Safety net hospitals often are classified as DSH, or “disproportionate share” hospitals, serving a large number of Medicaid and low-income uninsured patients. These hospitals receive a supplemental payment from state governments in addition to the reimbursement they would normally receive under the Medicaid program. The hospitals qualifying for these additional payments and their payment rates are generally state-determined (and subject to federal requirements). In addition, safety net hospitals are often teaching hospitals and qualify for supplemental payments for indirect medical education (IME). The number of public hospitals has steadily been decreasing since 1990, with the closure of several large public hospitals across the nation.[10]
With the economic downturn, increasing numbers of uninsured people, decreasing Medicaid budgets, and shortage of primary care providers, the squeeze on the health care safety net is likely to tighten. Health reform has the potential to alleviate this burden – any measure that helps increase insurance coverage should have a positive impact – however, even universal health care will not render the safety net obsolete. Many safety net providers are located in areas that are in remote rural communities or in inner city neighborhoods where there are few other health care providers available to serve residents. Furthermore, many of these providers have special training and resources to help manage the complex health and social needs of many safety net patients. Finally, we likely will still need a safety net to provide care to the individuals in our society that fall through the cracks but will still need a medical home. Health insurance coverage alone will not guarantee access to health care, particularly for those with low income, who often, disproportionately, are members of racial and ethnic minorities and highly reliant on our nation's safety net providers.[11]
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[1] Institute of Medicine. 2001. America’s Health Care Safety Net: Intact but Endangered.
[2] US Department of Health and Human Services. 2007. Health Resources and Services Administration, Bureau of Primary Health Care, Uniform Data System.
[3] Hoffman C & Sered SS. 2005. Threadbare: Holes in America’s Health Care Safety Net. Kaiser Commission on Medicaid and the Uninsured.
[4] Institute of Medicine. 2001. America’s Health Care Safety Net: Intact but Endangered.
[5] Iglehart JK. March 2008. Spreading the Safety Net— Obstacles to the Expansion of Community Health Centers. New England Journal of Medicine, 358(13):1321-23.
[6] Rosenbaum S & Shin P. March 2006. Health Centers Reauthorization: An Overview of Achievements and Challenges.
[7] Hurley R, Felland L & Lauer J. December 2007. Community Health Centers Tackle Rising Demand and Expectations, Center for Studying Health System Change.
[8] Hoffman C & Sered SS. 2005. Threadbare: Holes in America’s Health Care Safety Net. Kaiser Commission on Medicaid and the Uninsured.
[9] Ibid.
[10] Bindman A. 2008. America’s Health Care Safety Net. KaiserEDU online tutorial.
[11] Siegel B, Regenstein M and Shin P. Fall 2004. Health Reform and the Safety Net: Big Opportunities; Major Risks. The Journal of Law, Medicine & Ethics.
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