This piece in HealthAffairs looks at the future of safety-net hospitals.
“N}national, state, and local government agencies historically have provided supplemental funding to these systems to offset unreimbursed and under-reimbursed care. Under the Affordable Care Act, however, that is changing. With the expectation that most people will be insured under the new law, policy makers have planned to reduce much of this supplemental funding. In this view, safety-net systems will either become financially independent or close.”
The authors write: “Our recent study of eight safety-net hospital systems indicates that while system redesign is needed to meet the demands of the current healthcare environment, the association between strategic system redesign and operating margins is weak. Critical additional factors affecting the safety-net systems’ operating margins are their business strategies and their competitive positions in local markets.”