Are Safety Net Programs Losing Their Safety Net?

A far bigger safety net must be in place to support these essential facilities, programs, providers, and the communities who rely on them. More must be done quickly to ensure safety net sustainability.

The nation’s 56 official safety nets strive to provide quality health and mental health to the nation’s most in need populations. Yet, new struggles to do so are endangering the lives of patients and mandate swift action.

Safety Net Realities 

A quilt of >14,000 sites comprise the safety net system: disproportionate share hospitals, federally qualified health centers (FQHCs), rural, and community health centers. Location maps and listings are accessible at HRSA’s FQHC with a safety net hospital list at their trade association website (America’s Essential Hospitals). These sites provide care:

  • Independent of patient ability to pay and immigration status
  • To the highest share of Medicaid and uninsured patients: 75% and 60% of the population respectively!
  • Across rural and urban regions and both, public and non-profit entities 

Pandemic-related financial headaches continue for the industry, safety net hospitals shouldering more than their share of this burden. Rural regions have seen a waning hospital presence, adding pressure to remaining FQHCs. The Sheps Center displays >100 closures in the past decade50% of 2020 closures for safety net facilities alone.

A recent Kaiser Family Foundation issue brief reviewed COVID’s disproportionate impact on populations covered by Medicaid and Medicare, including people of color and those who use long-term services and supports. Providers serving these patients were less likely to have received monies from the $178 B in pandemic federal provider relief funds; barely $13.1B went to safety net hospitals with a mere $11B to rural providers. This reality contributes to national health expenditures soaring to $4.1 Trillion dollars. The amount accounts for early 2020 through the pandemic’s first wave, which hit safety net facilities hard. Pandemic-related losses for the largest safety net hospitals (e.g., 1000 beds) are as high as 50% of their quarterly revenue. 

Loss of 340B Drug Discounts

Recent loss of 340B drug discounts has meant major fiscal challenges for safety-net programs. The legal battle against drug makers wages in the courts. HRSA has stepped up, imposing fines against drug makers when possible. A study of 510 urban facilities identified losses at 23% of savings from due to loss of 340B, a median of $1 M. Critical access hospitals saw 40% of savings lost, roughly $220,000. While that amount seems small, it is a major hit to these rural hospitals with a max of 25 beds, located 10 miles from other providers. While dollars and losses are relative to each organization, the bottom line is the same; patient endangerment from cuts and closures of needed programs, potentially the only facility or service provider for miles.

How to Save the Safety Nets

7 ideas are posed by experts to strengthen the safety-net foundation: 

  1. Increase federal funding: Target funds to hospitals that qualify for Medicaid disproportionate-share hospital (DSH) payments. Use hospital census data to more equitably distribute payments to facilities that primarily treat uninsured and Medicaid patients (and not Medicare patients). 
  2. Clear Guidance: Federal agencies, as the CDC should use hospital census data to more equitably distribute payments to facilities primarily treating uninsured and Medicaid patients. This action is a sound public health reimbursement strategy moving forward. 
  3. Streamline Regulation: Reduce regulatory burdens to foster reimbursement, such as ongoing expansion of telehealth and virtual requirements and reimbursement, lengthen quality reporting programs, and extend leniency with value-based purchasing programs. These will help hospitals to recover financially from pandemic-related losses.
  4. Loan Forgiveness: Expand programs that incentivize new clinicians to accept positions in safety-net programs. This action will bolster the workforce of providers who accept new Medicaid patients.
  5. Expand Coverage Options: Advance these options to limit growth of uninsured patients and uncompensated care
  6. State And Local Initiatives: Enact policies to mitigate effects of hospital closures. Keep public and surrounding healthcare systems informed so regions can best plan for, and provide necessary outreach to service shortage areas. This will also minimize service gaps, providing safer transitions of care.
  7. Community and Volunteer Efforts: Target corporate and community investing to bridge gaps in care: create grants, fundraising campaigns, horizontal mergers, to build satellite clinics, services, and programs. 

A far bigger safety net must be in place to support these essential facilities, programs, providers, and the communities who rely on them. More must be done quickly to ensure safety net sustainability.

I know there will be other suggestions, so add them in the comment area below.

#safetynet #accesstocare #bridgethosegaps #340B #funding #interprofessionalimpact #interprofessional insights 

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Author: Ellen's Interprofessional Insights

Bio: Ellen Fink-Samnick is an award-winning industry subject matter expert on interprofessional ethics, wholistic health equity, trauma-informed leadership, and supervision. She is an esteemed professional speaker, author, and knowledge developer with academic appointments at George Mason University and the University of Buffalo. Ellen is a clinical supervision trainer for NASW of Virginia, and serves in national leadership and consultant roles. She is also a Doctoral in Behavioral Health Candidate at Cummings Graduate Institute of Behavioral Health Studies. Further information is available on her LinkedIn Bio and website

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