The Disappearing of America’s Safety Net Hospitals – Disadvantaged Populations Detrimentally Affected

by Suzy OGawa on January 23, 2012

The 2010 Patient Protection and Affordable Care Act (PPACA) represents the culmination of a shift in thinking about healthcare delivery in the United States. PPACA and its push for Accountable Care Organizations (ACOs) is moving the US healthcare system towards integration. With the downward push in costs and incentives for quality and efficiency, mergers and acquisitions in the healthcare industry are likely to ramp up in the next decade. The formation of ACOs and the increasing consolidation of healthcare organizations present a number of questions, policy, legal, equity, etcetera.

One of the more important and often underrepresented issues in the media is the disappearing of America’s safety net hospitals. These are the hospitals that serve many of our country’s vulnerable populations and provide essential health services. There are 2,700 safety net hospital in the United States. Without these hospitals, many of these communities would not have local healthcare services. Safety net hospitals are responsible for taking care of many of the US’s uninsured, Medicaid, racial/ethnic minorities and rural patients. (Meyer, 2004) Cost control, quality and efficiency standards could have an inequitable effect on the US population, where the communities served by safety net hospitals get an unfair portion of hospital closures, and thus are left without sufficiently reasonable healthcare access.

Gloria Bazzoli, et al. in their recent study (Feb, 2012) in the Journal of Health Services Research, entitled “The Effects of Safety Net Hospital Closures and Conversions on Patient Travel Distance to Hospital Services,” examined the effects of safety net hospital closures on uninsured, Medicaid, and racial/ethnic minorities. They looked at patients’ travel distances, through a framework of consumer search decisions and hospital choice. They also accounted for patient characteristics that affect perceived travel costs and benefits (i.e. traveling an hour for life saving emergency care versus traveling an hour for primary care). Bazzoli, et al. found that Safety Net Hospital closures “appear to have detrimental access effects on particular subgroups of disadvantaged populations.”

While there were several limitations to this study, it still raises important policy implications. Policy makers should make an effort to address the needs of these marginalized populations if it happens that their Safety Net Hospital closes. Services relating to transportation to and from health care centers may be the ideal way to deal with health services disruptions. On the other hand, this is a mitigating step, and perhaps we should first be asking the question, do we want our healthcare to be further away from home? What are the benefits and what do we lose when we choose high quality, high efficiency and lower cost healthcare over community-focused healthcare? This is obviously not an either/or question but rather what should be considered when discussing policy implementation. This an issue that should be considered by both urban and rural dwellers, as Safety Net Hospitals are located in communities of varying population densities. However, I would argue that a healthy population cared for in an equitable way is in all of our best interest.

The future of healthcare organization shows a trending towards increased integration and regional health systems in the hopes of achieving greater efficiencies, higher quality and lower costs in our healthcare system. The effect of this trend could see safety net hospitals disappear as they will be forced through financial pressures to either merge with larger health systems or shut their doors.


Jack A. Meyer (Nov, 2004). “SafetyNet Hospitals: A Vital Resource for the U.S.” Economic and Social Research Institute.

Gloria J. Bazzoli, Woolton Lee, Hui-Min Hsieh, and Lee Rivers Mobley (Feb, 2012). “The Effects of Safety Net Hospital Closures and Conversions on Patient Travel Distance to Hospital Services.” In Health Services Research, 47:11.

Gaythia Weis January 23, 2012 at 5:46 pm

Another well researched and thoughtful post, Suzy! I think that you have done a great job incorporated both your previous good use of references and some of the suggestions made in your last post regarding style. I am glad to see this issue highlighted here, as I think it is very concerning. We all face being losers if medical care skims the easy and profitable cases and disregards the rest. I do think that more detail on the impact on all of us could have been incorporated here.

Suzy OGawa January 24, 2012 at 10:52 am

Thanks for you comments, Gaythia. I will try in future posts to draw more connections to and implications for the greater population.

Angela January 23, 2012 at 5:53 pm

Thank you for the post! Not being American, I wasn’t aware of the existence of safety net or public hospitals in America in general. Am glad they exist! Wasn’t sure if I understood correctly: they are in danger of being closed, because there are new, more rigorous quality and efficiency standards applied to all hospitals, which these public hospitals tend to fall short of? That’s scary!

Suzy OGawa January 24, 2012 at 11:00 am

Thank you. Just to clarify, quality and efficiency standards are not “directly forcing” safety net hospitals to close. However, they are making it hard for safety net hospitals to stay open. Safety net hospitals typically run on very small margins, since they have a lot of charity care and low reimbursement Medicaid. This presents a number of problems including not having enough money to invest in new technologies and facilities, or to invest in staff that can work to improve quality and efficiencies. This idea of the ACO encourages health organizations to team up and agree to be accountable for population health. The benefit of forming ACOs means that they can share in the savings that are created from the ACO’s touted benefits (such as savings related to administrative efficiencies and clinical integration). These shared savings are provided by the Center of Medicare and Medicaid Services (CMS). And as Medicare and Medicaid go, so will the rest of the health insurance industry. Furthermore, CMS will begin not to reimburse for readmissions, hospital acquired infections, etc…these are related to quality and so can further place financial pressures on these safety net hospitals.

Catherine OGawa January 23, 2012 at 9:18 pm

You are right that one of the biggest problems for the poorer population, apart from the cost of medical care, is the ability to access that care. Often there is a need to rely on public transportation, which currently in the case of Detroit, is not always reliable. Also because of the difficulties in transportation and cost, poorer patients are less likely to seek access for preventative care and instead wait until their problems are more urgent. This defeats one of the main purposes of the accountable care organizations.
As for Angela’s comment, the problem with the inner city hospitals is not so much that they are poorer quality, but serving a largely uninsured or underinsured population they are inadequately funded to provide the needed services. Some of the larger hospital systems branch out not to eliminate these hospitals, but to serve them by balancing them with their better insured patients.
Inaccessible healthcare, whether through cost or location, is ineffective health care.

Suzy OGawa January 24, 2012 at 11:01 am

Great comments, Dr. OGawa 😉

MB Lewis January 23, 2012 at 9:36 pm

Kudos for taking on an important topic like this, Suzy. I will say there were times it felt more like literature review for a journal than a blog for the public. Could you have given any real-world examples to make us “feel” the threat? A child not getting asthma treatment in time, higher infant mortality in low-access areas, etc? Might seem like pandering, but vivid stories force a connection. Also, I finished reading and wondered: Just how unintended is this result? Who are the “bad guys” allowing it to happen, and much is it undermining the good of health care reform?
Just asking… Thanks for making me think!

Suzy OGawa January 24, 2012 at 11:06 am

MB, thank you for your comments. In future posts I will try to make that “human connection”.

I think one of the most important things for people to understand about health care and policy in general is that there isn’t necessarily a “bad guy”. People like to pick out a bad guy when seeking understanding; it’s a way of moving forward. However, these are very complicated social issues, and I don’t think any one person or one organization has the right answer (or the wrong answer). Societies and health care are created by people working in good faith towards a best solution. Trial and error is inevitable. We need people working together to develop the best solution for our communities and country.

Deana G January 24, 2012 at 3:08 pm

Really interesting post–and certainly very relevant. I work as a physician assistant at a fairly sizable “safety net” hospital in Grand Rapids, and we are seeing much of this concern in our area. Even small, community practices thirty, forty miles away from the city are being swallowed by the dominant health system in this area, which results in changes and limitations in the way in which providers can practice. Where the small practices would make exceptions for patients (billing at lower levels, seeing patients in off-hours, etc), they are unable to do this when involved in the larger health systems. In addition, the large health systems put limitations on insurance carriers in these clinics, making access to care even more difficult.

Anuj Mahajan January 24, 2012 at 4:22 pm

Interesting article – thank you for sharing. It seems quite ironic that the hospitals that probably receive the most government aid are being forced to shut down due to a policy passed by the “same” governing body. You raised some good questions. I think your post would have been stronger with some factual data extracted from the study (or other sources).

Caren Weinhouse January 25, 2012 at 7:42 pm

Thanks for the thoughtful post, Suzy. I wonder how full implementation of PPACA would affect these hospitals, particularly if all patients were required to carry some form of insurance. It’s easy to agree on the importance of these hospitals, but it would be great to have discussion of potential solutions or how upcoming legislation might affect the existing problem.

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