Population characteristics of markets of safety-net and non-safety-net hospitals

Research Objectives. To compare and contrast the markets of urban safety-ne t (USN) hospitals with the markets of other urban hospitals. Study Design. To develop profiles of the actual inpatient markets of hospit als, we linked 1994 patient-level information from hospital discharge abstr acts from nine states with 1990 data at the UP code level from the US Censu s Bureau. Each hospital's market was characterized by its racial and ethnic composition, median household income, poverty rate, and educational attain ment. Measures of hospital competition were also calculated for each hospit al. The analysis compared the market profiles of USN hospitals to those of other urban hospitals. We also compared the level of hospital competition a nd financial status of USN and other urban hospitals. Principal Findings. The markets of USN hospitals had higher proportions of racial and ethnic minorities and non-English-speaking residents. Adults res iding in markets of USN hospitals were less educated. Families living in ma rkets of USN hospitals had lower incomes and were more likely to be living at or below the federal poverty level. USN hospitals and other urban hospit als faced similar levels of competition and had similar margins. However, U SN hospitals were more dependent on Medicare disproportionate share payment s and on state and local government subsidies to remain solvent. Conclusion. USN hospitals disproportionately serve vulnerable minority and low-income communities that otherwise face financial and cultural barriers to health care. USN hospitals are dependent on the public subsidies they re ceive from federal, state, and local governments. Public policies and marke t pressures that affect the viability of USN hospitals place the access to care by vulnerable populations at risk. Public policy that jeopardizes publ ic subsidies places in peril the financial health of these institutions. As Medicare and Medicaid managed care grow, USN hospitals may lose these pati ent revenues and public subsidies based on their Medicaid and Medicare pati ent volumes. The loss of these funds would hinder the ability of USN hospit als to finance uncompensated care for uninsured and underinsured patients.