When it comes to medical care, the poor just keep getting poorer

by Kristi Park, August 13th, 2008, 7:00 am

While the big for-profit hospital operators continue their long-term turnarounds (HMA, Tenet, and LifePoint have all posted financial improvements this quarter) and politicians of all stripes debate the merits of expanded health insurance coverage, the nation’s health care safety net — the US’s patchwork system for caring for the poor and uninsured — continues to adapt to industry realities in order to survive. Problem is, surviving may have led them to abandon their main mission: serving as the last resort for indigent patients needing health care.

A new report in the journal Health Affairs (via the Wall Street Journal Health Blog) chronicles the ways in which safety net providers have adapted to competitive pressures in an increasingly profit-hungry health care world. And the upshot is that the doctors, community health centers, and public and not-for-profit hospitals that make up the safety net are, in some cases, turning their backs on Medicaid patients and the uninsured and focusing their attention on more profitable service offerings (heart surgery, anyone?) and populations (i.e., those with insurance).

The Health Affairs article lists a number of factors involved in the shifting strategies of safety-net providers. Among them are:

• the continuing rise in the number of uninsured patients, leading to increased demand for services and higher levels of uncompensated care
• greater competition between hospitals and doctors, who are increasingly providing outpatient services that were formerly the purview of hospitals
• a decreasing number of doctors, especially specialists, who are willing to serve Medicaid and indigent patients, and
• competition from non-safety-net providers for patients with insurance

In response to these pressures, providers have taken a number of steps, including expanding into more affluent areas, marketing their services to insured patients, and restricting access to charity care for non-emergency cases. These steps effectively refocus safety-net providers’ attention away from the patients who already have incredibly tenuous access to health care and make it well nigh impossible for them to get care before their situations become emergencies.

It’s a problem that’s been noted before, of course. Senator Chuck Grassley has, for some time, been investigating not-for-profit hospitals and whether they are living up to their mandate to provide charity care. And increased regulatory scrutiny is one of the policy recommendations that the Health Affairs authors make. They also contend that raising government subsidies for safety-net providers — such as the Medicaid disproportionate-share payments that go to the hospitals treating the lion’s share of poor patients — would help the situation. But, as I think everybody ought to know by now, they point out that the most direct way of fixing the problem is to expand insurance coverage. The best way to accomplish that is up for debate, I suppose, but whether we have to is no longer a question.