Closing of Public Hospitals Does Not Mean Reduced Access to Care for Uninsured, Report Finds

Although the advent of managed care, declining revenues and reduced admissions led many public hospitals to reduce the number of beds or to privatize, a report from the Urban Institute's Assessing the New Federalism notes such measures in five localities did not "usually mean closing the hospital and never meant wholly abandoning the safety net." Local public hospitals "have long served as medical providers of last resort for the uninsured poor, anchoring the safety net that provides access for the disadvantaged, especially in large urban areas," the report notes. Furthermore, public hospital supporters maintain that "only public operations can maintain the truly 'open door' that guarantees good-quality care to all patients regardless of ability to pay." Advocates for public hospitals note that while "paying patients" can receive treatment in "a dozen or more private hospitals in large urban areas," such hospitals "do not want to serve many of the uninsured and in any case simply cannot match the public sense of mission in doing so." To test the safety net in the absence of public facilities, the report examined five localities that ceased running public hospitals. Milwaukee, Boston and Hillsborough County, Fla., each closed a public hospital during the 1990s, while San Diego and Philadelphia stopped operating their public hospitals "decades before." The report notes that only two of the five public hospitals had their buildings closed, and a "successor hospital" stayed in business in the same location in four of the five localities. Those successors "had some mandate to continue serving the needy." The three localities closing public hospitals in the 1990s each created new safety net programs modeled on managed care, which shifted patients from the former public hospitals to community clinics. The two earlier privatizations also "came to rely heavily on clinics as well," the report notes. Among the other findings for the three newer privatizations:

• Integrating services was a "key feature" of the new managed care plans;
• The new plans improved the "efficiency" of services, giving the uninsured "better access through clinics and referral providers than they had at the prior public hospital alone;"
• The uninsured's access to care "remained as good as it was before;"
• Although performance has been good, local support has not increased, nor have programs expanded;
• State and federal funds have "become more important in guaranteeing continued access, given limited local funding and enrollment in the new programs."