Health Care for the Poor and Uninsured After a Public Hospital's Closure or Conversion

Advocates for and against running public hospitals dispute who can best provide "safety net" care. To understand the issues in practice, we studied three localities that stopped running public hospitals in the 1990s (Milwaukee, Boston, Tampa). Two older sites provided comparative perspective (San Diego, Philadelphia). Implementation Decisions to privatize were political. Decisions were based partly on health policy concerns, but mainly on local public finance, state support, and budgetary tradeoffs. Transitions were more successful where: ? a private hospital took over for the public facility ? policy makers articulated a clear and plausible strategy for continuing to serve the poor ? change was planned over time rather than suddenly implemented ? stakeholders, especially unions, were consulted and their concerns addressed Efficiency and better value were key goals; the 1990s shifts replaced episodic public hospital care with a full continuum of private care, overseen by primary-care clinics under new programs. The programs created locally managed indigent health care, a new hybrid between public support for one local hospital and broad payment for most providers via health insurance or Medicaid. The programs feature local design and control, emphasize efficient delivery of care, and fund private systems of care with public monies. Benefits are broad, but provider payments and eligibility are limited. Clinics play a key role. The earlier shifts also came to rely on clinics, without integrating services. Impacts Efficiency of services has improved, as intended. Enrollees in the programs have better access through clinics and referral providers than they had at the prior public hospital alone. Quality is said to be as good as before or better, and the localities have all achieved budgetary savings. Successor hospitals are also said to be operationally more efficient. Overall access for the uninsured remains as good as before-not ideal, just no worse , at least in the early years after privatization. This success is due not just to the new programs, which fall well short of reaching all the uninsured, but also to continued private hospital charity. Access remains concentrated at traditional core safety net providers, especially the successor hospitals. Reliance on so few providers makes the safety nets vulnerable to further fiscal shocks. Clinics and hospitals report increasing difficulty in maintaining charitable care. Local support has not increased because of the programs' good performance, and program successes have prompted little expansion. Local funding is strictly limited under the new plans, which draw on state or federal support as well. Over a longer period in the comparison sites, local funding dwindled. State and federal funding has become more important in guaranteeing continued access, given limited local funding and enrollment. Implications Localities can innovatively restructure safety net care as states or federal authorities seldom can. However, the effort needed is substantial, the new programs remain relatively small, and local funding is problematic. Replicability is unknown. The need for a facility-based safety net persists because so many remain uninsured, and local funding contributes little there. State and federal support has been significant but current policy calls for cutbacks. Robust local safety nets thus need non-local funding. On reflection, this is unsurprising because the poor and the uninsured are geographically concentrated, but the tax base is not. Safety net policy needs to be made at both local and higher levels of government.