This lesson goes over the definition of the U.S. healthcare safety net. You’ll then learn what kinds of providers may be included in this definition and a bit about the funding of current trends in this area.

U.S. Healthcare Safety Net

While it may not always be the case, as of now, the United States doesn’t have universal healthcare. And while the Affordable Care Act has tried to make inroads in getting everyone health insurance so that they can, by extension, get better healthcare, things haven’t worked out as smoothly as one might have hoped.

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This means that plenty of people are still without health insurance, and many who have it are still unable to pay for many medical services. Instead, these individuals might come to rely upon a loose patchwork or network of medical providers that deliver significant healthcare services to patients without insurance or with Medicaid, also called the U.S. healthcare safety net.

Safety-net providers do so without regard for whether or not the individual can pay for the healthcare services. The outlook for these providers is changeable and dependent on a myriad of financial and political factors. This lesson will go into some of the current trends.

Types of Healthcare Providers

So which types of healthcare providers actually comprise the healthcare safety net? Well, the answer to this will vary from state to state, but they include:

  • Retail clinics, like those located within a pharmacy
  • Rural health centers, which may be public, private, or non-profit in nature
  • State health agencies, which can place medical professionals into places of need through loan repayment programs
  • School-based clinics
  • Specialty service providers, like those targeting people with HIV/AIDS
  • Community health centers, which may or may not receive federal funding and might be run by volunteers and be faith-based
  • Community and migrant health centers – these are like community health centers but are funded under the Public Health Service Act
  • Private, public, and Disproportionate Share Hospitals
  • Federally qualified health centers and look-alikes (look-alikes don’t receive federal funding)
  • Teaching hospitals
  • Private physicians

What types of settings might we find these providers in? Well, more often than not, they will either be directly in or next to low-income communities, rural communities, communities with lots of immigrants, and communities of color.

Trends in Funding

The situation with respect to funding and availability of healthcare providers in the safety net is currently very fluid. This is in part due to repeated attempts to repeal or replace the Affordable Care Act (ACA) and as a consequence of the act itself.

Since 1981, the federal government has allotted $20 billion to help pay for the Disproportionate Share Hospital program, which covers healthcare services provided by safety-net hospitals and clinics. Once the ACA kicked in, uncompensated care in hospitals dropped by about 20% since many people were required to sign up for health insurance.

This was basically one of the main points of ACA in general, to decrease uncompensated care. That sounds great, but there’s always a flipside. The flipside is that because of this, the government has been cutting funding for the Disproportionate Share Hospital program.

What’s the problem? While some of the hospitals will save money thanks to more of their patients being insured due to the ACA’s requirements, not all hospitals are serving communities impacted by the ACA this way. For example, very low-income communities and communities with a large number of illegal immigrants don’t benefit from ACA since these people don’t qualify for ACA-mandated insurance. Hospitals serving these populations will lose a lot of federal funding, since the Disproportionate Share Hospital program is cut without commensurate compensation from insurance companies.

This is just part of the issue. The other part is the continued efforts to repeal and replace the ACA. Depending on exactly how this trend plays out, the impact on the healthcare safety net could be immense. Under the ACA, the individual mandate requires most people to have health insurance coverage. If reversed, this could lead to a reduction in revenues for safety-net healthcare providers.

If something similar to the American Health Care Act, which limits the amount of federal money states receive, is passed, then safety-net hospitals stand to lose 83% of their income.

As you can imagine, this will greatly impact the availability of these safety-net healthcare providers in general, as well the availability of services they can provide, as there is limited funding to begin with.

Lesson Summary

The U.S. healthcare safety net is an imprecisely defined term that generally refers to a loose patchwork of medical providers that deliver significant healthcare services to patients without insurance or with Medicaid. These medical providers commonly serve communities of color, communities with lots of illegal immigrants, and rural communities. The types of healthcare providers serving these communities can be quite varied and include:

  • Retail clinics
  • Rural health centers
  • State health agencies
  • School-based clinics
  • Specialty service providers
  • Community health centers
  • Community and migrant health centers
  • Private, public, and Disproportionate Share Hospitals
  • Federally qualified health centers and look-alikes
  • Teaching hospitals
  • Private physicians

The healthcare safety net has been, in part, improved thanks to increased revenues as a result of the Affordable Care Act, which has increased the number of people that are insured. But not all hospitals have been equally affected by this law and some stand to lose funding without a commensurate increase in profits as a result of this law’s effects.

Similarly, it’s unclear how the current debate on repealing and replacing the ACA will play out, but the general trend appears to be that a repeal/replacement of the ACA will negatively impact the U.S. healthcare safety net for decades to come.

Medical Disclaimer: The information on this site is for your information only and is not a substitute for professional medical advice.