Background Paper

The Health Care Safety Net in a Time of Fiscal Pressures
April 2001


Richard Hegner


This background paper reviewed the role played by the health care safety net in serving the nation's uninsured, underinsured, and indigent populations as well as those Americans who experience problems in obtaining access to health care. Against the backdrop of the March 2000 Institute of Medicine report, America's Health Care Safety Net: Intact But Endangered, the paper examined the recurrent choice in U.S. health policy between underwriting public insurance and subsidizing direct provision of health care. It recounted a number of reasons for direct federal interest in the safety net — including the important role played by Medicaid, the major source of revenue for safety net providers. The importance of local variation in safety nets was underscored, and a number of local factors which contribute to that variation were identified. The paper reviewed what is known about the uninsured population. Major sources of safety net funding were reviewed, including the complex system of cross-subsidies that allow safety net providers to offer uncompensated care. Factors placing safety net providers in jeopardy were enumerated. The paper concluded with a review of the special problems faced by hospital emergency rooms as safety net providers.

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