Stricter Rules and Tighter Budgets Strain the System, But it Keeps on Ticking

Analysis of Options to Help Remake the Health Care Safety Net

During 1995 and 1996, investigators at Kalkines, Arky, Zall and Bernstein took a snapshot of the state of the health care safety net in four major urban areas (Boston, Miami, Philadelphia, and New York City).

The research team also made program development recommendations to the Robert Wood Johnson Foundation (RWJF) regarding the maintenance and improvement of the health care safety net.

Kalkines, Arky, Zall & Bernstein was a Manhattan law firm specializing in health care law. It was acquired in 2003 by Los Angeles-based Manatt, Phelps & Phillips.

A similar contract was awarded to the Lewin Group under grant ID# 028039, to assess safety-net viability in Dallas, Los Angeles, Memphis, and also in New York City.

Key Findings

Along with findings related to each of the studied cities, investigators presented the following findings to RWJF regarding the overall state of the safety net:

  • The numbers of medically indigent were on the rise due to corporate downsizing, immigration, and rising health care costs that were causing employers to drop their health insurance benefits.
  • The Medicaid program, which had been the backbone of the safety net, was changing in ways adverse to low-income populations, communities and the health care providers that serve them.
  • The states and the federal government had begun to reduce a wide range of health care grant programs to safety-net providers, including support for maternal and child health, categorical aid for HIV, substance abuse and mental health.
  • The rapid implementation of mandatory Medicaid managed care presented challenges for the safety net, such as a shortage of physicians and facilities in inner cities, restrictions on choice of providers, and deeply discounted rates for community providers.
  • Most safety-net providers were poorly positioned to compete in the health care marketplace.
  • Despite overall consolidation in the health care field, few safety-net providers were linking to form integrated, resourceful delivery systems.
  • The proposed federal Medicare and Medicaid cuts threatened to deliver a "knockout blow" to many safety-net providers and the communities they served.
  • Nevertheless, there was not yet a major crisis in the safety net of the cities studied.

Funding

RWJF supported this project through a grant of $180,800.