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Fragile but Resilient: Most Community Health Care Safety Nets Stronger

Leadership, Community Support and Improved Business Practices Bolster Safety Net Providers

News Releases
August 20, 2003

FURTHER INFORMATION, CONTACT:
Alwyn Cassil: (202) 264-3484

ASHINGTON, D.C.—Fragile by nature, many community health care safety nets for low-income and uninsured people have grown stronger in recent years thanks to improved business practices and some new funding, according to a study released today by the Center for Studying Health System Change (HSC).

A combination of factors has helped major safety net providers—typically community health centers (CHCs) and public hospitals—make the most of available funding to organize, reinforce and expand local safety nets in 12 nationally representative communities, the study found. Key factors include strong political leadership, community support, collaboration among government agencies, providers and other organizations, as well as capable managers using effective business strategies.

"While local safety nets generally are stronger, the true test lies ahead as states grapple with budget deficits and demand for safety net care increases because of the sluggish economy," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation.

"Even strong safety nets can fray under the dual pressures of funding cuts and increased demand for services, but most communities are in a better position to weather the tough times ahead," said Laurie E. Felland, an HSC health research analyst and co-author of the study along with J. Kyle Kinner, HSC public affairs manager for policy, and Jack Hoadley of Georgetown University.

Over time, community safety nets endure ups and downs. Between 1996 and 2001, safety net providers showed significant resilience to various pressures, including the 1997 Balanced Budget Act, welfare reform and the transition to Medicaid managed care—all changes that hindered safety net providers’ ability to fund or cross-subsidize charity care.

During the same period, the booming economy helped many states expand public coverage options, and the safety net benefited from new revenue sources as uninsured people gained coverage through Medicaid expansions and the State Children’s Health Insurance Program. New ongoing funding also became available in 2000-01 through federal CHC expansion grants and federal Community Access Program (CAP) grants, which help communities integrate care delivery for the uninsured. By 2002, however, the economy in most states had slowed, and threats to critical public funding sources had returned.

The study’s findings are detailed in a new HSC Issue BriefThe Health Care Safety Net: Money Matters but Savvy Leadership Counts. Common strategies among the 12 communities—Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.—include:

  • Streamlining operations and improving productivity, for example, by using more clinical support staff and nonphysician clinicians, upgrading information technology, and improving payment collection from insurers and patients.
  • Leveraging economies of scale and sharing technical expertise with other safety net providers.
  • Enrolling uninsured patients in public insurance programs on site and attracting more privately and publicly insured patients to improve payer mix.
  • Raising funds and applying for grants, especially federal CHC expansion grants, particularly to develop mental and dental health services.

Generally, these strategies, coupled with new funding, have increased primary care and hospital services available to low-income people, although most communities remain much more limited in providing specialty, mental health and dental services. Also, significant differences in availability of safety net services exists across communities, and communities with less well-established safety nets typically have more significant service gaps and financial difficulties.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely insights on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded exclusively by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.

 

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