Public hospitals feel recession's pinch

September 1, 2012

Some hospitals are feeling the pinch of the Great Recession.

SINCE THE ONSLAUGHT of the 2007 recession, safety net hospitals have seen usage numbers soar, according to a survey of the National Association of Public Hospital and Health System's (NAPH) members. And it's not just the emergency room that is being flooded.

NAPH members provided nearly $128 billion in inpatient and outpatient services in 2010, according to a recent report developed by the National Public Health and Hospital Institute, NAPH's research affiliate.

During 2010, the typical safety net hospital averaged 21,300 admissions, an increase of more than 16% since 1998. During that same 12-year period, ambulatory visits-which included 79,000 emergency department visits in 2010-soared 35% to more than 573,000.

According to Bruce Siegel, MD, NAPH president and CEO, the increase in outpatient services reflects both harsh economic conditions and a greater focus by safety net facilities on providing integrated care.

"The economy has driven many more people to the safety net, but you're also seeing a major investment in outpatient primary care by the safety net," he says. "It's something that distinguishes safety net hospitals from the rest of the industry. They've invested in huge community networks. They've invested in care management and they're moving ahead in medical homes at a breakneck pace. They're very committed to managing patients across the continuum beyond the four walls of the hospital."

The typical safety net network now includes 20 or more ambulatory care sites providing both primary and specialty care. Roughly 58% of ambulatory visits in 2010 were for specialty care services, according to the report.

DISPROPORTIONATE SHARE

Despite the growing mission, Dr. Siegel notes the economic strain under which the safety net hospitals operate. Although they represent only 2% of the nation's acute care hospitals, NAPH members delivered 20% of the uncompensated care provided by U.S. hospitals in 2010.

The hospitals treat a high percentage of uninsured and Medicaid patients, with rates 30% to 40% lower than commercial reimbursement, Dr. Siegel says. Additionally, NAPH hospitals provide costly specialized services such as trauma and burn units, which often fill a unique need in their local communities.

"We think of the safety net as the ultimate form of capitation," he says. "The safety net has gotten incredibly resourceful at care management. As the move toward managed care or other accountable models is going to continue, these hospitals can clearly provide models for the managed care industry."

-Shelly Reese