Effects Of Health System Changes On Safety-Net Providers

Growing competition in health care markets and Medicaid managed care, combined with cuts in government funds that subsidize care to the uninsured, are challenging the viability of the safety net. In response to these pressures, "safety-net" providers in fifteen communities are integrating vertically and horizontally, contracting with or forming managed care plans, and seeking to attract paying patients. Such strategies appear to be successful for community-based primary care clinics, but other providers--including hospitals that cannot quickly develop primary care capacity, most local health departments, and providers that fail to attract Medicaid patients--are more vulnerable to health system changes. While the safety net may be intact now, access to care among the uninsured is more at risk in communities without state programs or local taxes that subsidize such care.