Safety Net Providers and Federal Health Care Reform

Federal legislation including the Recovery Act in 2009 which supports dissemination of information technology and the Patient Protection and Affordable Care Act (PPACA) in 2010 which broadly affects health insurance coverage and targeted funding for safety net providers will have a substantial impact on the health care safety net. The demand for health care services is likely to rise following the expansion of health insurance coverage, but it is unclear what role the health care safety net will play in delivering those services. Safety net providers may become more critical as a source of care because they are located in medically underserved areas. However, the increased availability of health insurance coverage for many of those who were previously uninsured may result in a migration of patients away from the safety net toward those providers who serve privately insured populations. As a part of PPACA, safety net hospitals will experience a decrease in targeted funding under the Medicaid Disproportionate Share Hospital (DSH) fund while safety net clinics will benefit from an increase of $11 billion in new funding. To compete in the marketplace, safety net providers will need to use information technology to enhance their ability to provide efficient and high quality care. They should also consider adopting some of the policies and practices of the most successful safety net delivery systems in order to ensure their financial viability to care for those who remain most vulnerable for poor health outcomes due to lack of health insurance or other social characteristics.