(Circulation. 2000;101:e9029.)
© 2000 American Heart Association, Inc.
Safety Net in Jeopardy
On March 30, 2000, as the sun was beginning to set, a group of medical, college, and high school students gathered in front of Ben Taub General Hospital in Houston, Texas, for a candlelight vigil to remind the county’s citizens of the needs of the area’s medically indigent. The vigil was particularly appropriate in that place at that time because of the $30 million gap between the needs of the hospital district that runs the city’s public healthcare facilities and the amount that will be provided by tax funds. It was also a reminder that even in times of prosperity in the United States, 45 million people have neither public nor private health insurance; this number is equal to the combined populations of Canada and Australia.
Across the nation, the public hospitals where these indigent patients seek care are in jeopardy. The increasing numbers of people who look to them for health care has made their burden greater. At the same time, both federal and private insurers have reduced the amounts they will pay these hospitals, making cost shifting to cover the indigent impossible. Federal Medicare and Medicaid programs to reimburse hospitals who provide a "disproportionate share" of care to indigent patients have been steadily reducing the amount of money they are willing to give. Local and state governments have also been unwilling to provide funds adequate to provide care to the nation’s citizens who lack the funds or insurance to pay for their health care.
A 1999 survey of 1000 Americas by the national opinion research firm of Lake, Snell, Perry & Associates found that 51% of Americans have been without health insurance at some point in their lives, and 96% said that safety net hospitals and clinics are important because of the care they provide to those who cannot pay. Eighty-six percent said tax dollars should be spent on such hospitals, and 72% said such funding should be higher because no national, comprehensive health plan exists; 83% said Congress should pass comprehensive health legislation, but only 35% thought that such legislation was possible.
These are all issues that affect members of the National Association of Public Hospitals, said Lynne Fagnani, the vice president for finance and reimbursement of the hospital group. Right now, her group is working to attempt to get cuts in the disproportionate share funding from the federal government eliminated. Medicaid Disproportionate Share Hospital programs (DSH) covered 35% of the costs of treating the uninsured and poorly insured in the nation’s public hospitals in 1997, and Medicare DSH covered another 8% of the cost. Larry Gage, president of the National Association of Public Hospitals, told a Congressional Committee last May that cuts in the DSH programs have severely hurt hospitals. Ms Fagnani noted that the largest cuts were taken in the year 2000, and she hopes that Congress can be persuaded not to take the next 2 years of proposed cuts in the program to allow public hospitals to recover from the financial blows they have already received.
She said her group has also advocated increasing funding for community programs that provide care to indigent patients. She noted that Congress allocated $25 million last year to programs to integrate such services, and she hopes that amount can be increased to $250 million this year.
Across the nation, the problems of public hospitals vary. At Jackson Memorial Hospital in Miami-Dade County, Florida, the hospital itself generates funds to cover 80% of its costs, according to a report by the Urban Institute published in June 1999.
However, in the Harris County Hospital District in Texas, the hospitals can collect only 48% of their operating costs, and at Highland Hospital in Alameda County, only 58% of funds are internally generated. The Urban Institute estimates that federal reductions in DSH payments have and will hit these hospitals hard if nothing is done. California is expected to lose a total of $461 million in DSH money between 1998 and 2002; Texas will lose $546 million, and Florida, $28 million.
In Texas and Florida, state governments provide little funding for indigent care, but California has taken over the funding of indigent hospital care. In Miami-Dade County in Florida, the county spends only 1 in 9 tax dollars on health care, and in Harris County, Texas, only one-tenth of tax dollars go to the hospital district. The Urban Institute pointed out that Harris County funding was particularly tenuous because the county had chosen to cut back on ad valorem tax rates dedicated to health care during a period when DSH money was plentiful. "The county has the ability to fund Harris County Hospital District’s current operating deficit, but the county has not chosen to restore the property tax to its previous level," said the Urban Institute’s researchers. "Thus, while it may be beneficial to a hospital to be located in a county that can generate tax revenue and use that revenue to fund the hospital, unless the tax revenue is dedicated and nondiscretionary, the hospital is still vulnerable to policy changes by county government."
At Highland Hospital in California, the county has little taxing authority, and most of the hospital’s costs are covered by federal and state revenue. Because these funds have fallen below what is needed, the hospital has had to cut its costs by cutting services. "Again, Highland clearly is in a very tenuous position," the authors wrote.
At Jackson Memorial Hospital in Miami-Dade County, Florida, a 1 cent sales tax provides a source of dedicated revenue to the hospital. In addition, a law mandates that the county will contribute the same proportion of its budget to the hospital each year. "In combination, Miami-Dade County provides some $190 million a year in funding to Jackson, and that funding is not subject to administrative changes but instead is mandated by law," the researchers wrote. "As a result, Jackson Memorial Hospital is fully and securely funded."
Not only is the nation’s safety net in jeopardy, but the size of the holes in it varies from state to state and from city to city. An uninsured person’s ability to find health care depends on the state in which he or she lives. Many people are aware that such hospitals may be important to them at some point in their lives. "Given the public’s high regard for safety net institutions and their personal concerns about access to care and availability of insurance for themselves and their families, it is not surprising that the American voter wants something done about the problems facing safety net hospitals and the uninsured population in this country," said Gage. "They know that they may need those hospitals some day." \
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