The 131st Annual Meeting (November 15-19, 2003) of APHA

Abstract #66486

Jack Zwanziger, PhD, Health Policy and Administration/School of Public Health, University of Illinois at Chicago, 1603 W Taylor St, Chicago, IL 60612-4394, 312 996 1062, jzwanzig@uic.edu

Local hospital systems, the common ownership of hospitals in the same MSA, have grown to dominate many hospital markets. These systems have great potential to increase hospitals’ profitability, both by lowering costs facilitating clinical and administrative integration and by increasing hospital market power in negotiating with managed care plans. Safety net hospital activities, those hospital activities provided to vulnerable populations that involve financial losses, are increasingly threatened by the reductions in payment rates by public payers and by managed care. Membership in a local hospital system may improve a hospital’s ability to continue to provide safety net services.

Our study creates measures of hospitals’ involvement in safety net activities. We chose five criteria to develop a composite measure of safety net activity: ownership, membership in COTH, provision of a disproportionate share of services to Medicaid patients, provision of an atypically high outpatient clinic and ED intensity and serving a low SES population. We created indices using cluster analysis. We use data from the Williamson Institute to identify membership in a local hospital system in 1989, 1995 and 2001, that were compiled using a painstaking combination of efforts to verify membership. These include the AHA (the only source for most analyses) and a review of web sites, newspaper and trade press and telephone calls. We then examine the probability of membership in a system as a function of hospital and market characteristics. The results of this study would show whether safety net activity makes such hospitals undesirable members of hospital systems and therefore less able to survive in the current competitive environment

Learning Objectives:

• To define safety net activities for hospitals
• To identify measures of these activities for urban hospitals
• To show the competitive advantages of belonging to a local hospital system
• To relate safety net activities to membership in local hospital system

Keywords: Safety Net Providers, Hospitals

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.