Back to Annual Meeting Page		American Public Health Association 133rd Annual Meeting & Exposition December 10-14, 2005 Philadelphia, PA

Abstract #114925

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, Nasreen Khan, MS, Pharmacy Administration, University of Illinois at Chicago, 1603 W Taylor, Chicago, IL 60612, and Anil Bamezai, PhD, RAND Corp, 1700 Main St, Santa Monica, CA 90406.

Safety net (SN) hospitals in the US, also known as “hospitals of the last resort” provide health care services to the uninsured, low income, underinsured, to Medicaid beneficiaries, to patients who are “undesirable”. This study examined the financial performance of these hospitals over the 1990-2000 period. We combined data (revenue, expenses) from the Medicare Cost Report data sets with a range of hospital characteristics from the American Hospital Association Annual Survey of Hospitals for all urban general acute care hospitals in the US. We created a set of safety net measures including a factor characterizing the socio-economic status of the population living in the hospital's service area, and the proportion of Medicaid patients. We then modeled revenue, expenses and profit margin as a function of time varying hospital and market characteristics using hospital fixed effects specifications. Profit margins were consistently lower at safety net hospitals but the gap between these profit margins and those of non-safety net hospitals did not increase during the 1990s. These results must be seen as results conditional on a hospital continuing to function as a free-standing general acute care hospital. In fact, there was selective attrition for poorer performing hospitals. Safety net hospitals were disproportionately impacted by the public policy and market changes that took place in the 1990s. There is a need to focus subsidies properly to ensure the survival of the safety net in an environment where budget constraints and price competition are likely to persist and even to increase.

Learning Objectives:

• To know how to define safety net hospitals
• To understand how safety net hospitals' profitability differed from other hospitals all else equal

Keywords: Access to Health Care, Safety Net Providers

Presenting author's disclosure statement:

I wish to disclose that I have NO financial interests or other relationship with the manufactures of commercial products, suppliers of commercial services or commercial supporters.

Recorded presentation