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Part I: Hospital Structural and Geographic Characteristics

Safety-Net Hospitals Span All Locations, Sizes, and Ownership Groups

  • About 56 percent of safety-net hospitals are in urban areas, and 44 percent are in rural areas.
  • By far, the South has the largest share of the Nation's safety-net hospitals—about 66 percent.
  • The concentration of safety-net hospitals in the South may be somewhat related to the large proportion (nearly 50 percent) of the Nation's uninsured discharges that are in the South.

Select for Figure 3 (7 KB), Urban/Rural Hospital Location.

Table 1. Regional Distribution of All Hospitals, Safety-Net Hospitals, and Uninsured Discharges

Region Midwest Northeast South West
Percent of U.S. Safety-Net Hospitals 10.2 13.2 65.8 10.9
Percent of U.S. Community Hospitals 29.0 13.6 38.8 18.5
Percent of U.S. Uninsured Discharges 18.8 18.9 48.3 14.0
  • One in 5 (20 percent) safety-net hospitals is a teaching hospital. Non-safety-net hospitals have about the same proportion of teaching hospitals.
  • Over half of safety-net hospitals are small hospitals with fewer than 100 beds.

Select for Figure 4 (8 KB), Hospital Teaching Status.

Select for Figure 5 (9 KB), Hospital Bed Capacity.

Safety-Net Hospitals Are More Likely To Be Public Hospitals

  • Safety-net hospitals include all types of ownership: 43 percent are publicly owned, 45 percent are non-profit, and 12 percent are investor-owned, for-profit.
  • Publicly owned hospitals represent 43 percent of the safety-net hospitals but only 19 percent of non-safety-net hospitals.
  • Non-profit hospitals make up 45 percent of safety-net hospitals and 66 percent of non-safety-net hospitals.
  • Investor-owned hospitals make up 12 percent of the safety net hospitals and 16 percent of the non-safety-net hospitals.
  • Safety-net hospitals in rural areas are much more likely to be public hospitals than safety-net hospitals in urban areas. In rural areas, 58 percent of safety-net hospitals are public hospitals, whereas in urban areas, the percentage drops to 31.

Select for Figure 6 (9 KB), Hospital Ownership.

Select for Figure 7 (13 KB), Ownership by Urban/Rural Location.

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Part II: Hospital Financial Status

Safety-Net Hospitals Are Financially Vulnerable

  • Compared with non-safety-net hospitals, safety-net hospitals have substantially more Medicaid discharges—27 percent versus 17 percent.
  • Safety-net hospitals have fewer discharges covered by private insurance (25 percent) or Medicare (34 percent) than non-safety-net hospitals.
  • This payment mix makes it more difficult for the safety-net hospitals to cross subsidize care for the uninsured.
  • The patient revenue margin is equal to net patient revenue (i.e., patient revenue minus operating costs) divided by the operating cost of a hospital.When only patient revenues are considered, safety-net hospitals have a median patient revenue margin of -3.0 percent, compared to a median patient revenue margin of -1.5 percent for secondary safety-net hospitals and -1.1 percent for non-safety-net hospitals.

Select for Figure 8 (10 KB), Patient Health Insurance Coverage.

  • The total income margin is the total income for a hospital (i.e., net patient revenue plus contributions, government appropriations, and other income), divided by the total expenses (i.e., operating costs and other expenses). After subsidies and government budget allocations are added to net patient revenue, safety-net hospitals have a median total income margin of 2.4 percent. This is slightly more than the median total income margin of secondary safety-net hospitals (2.1 percent), but still lower than non-safety-net hospitals (3.0 percent).
  • Over one-third of safety-net hospitals (36 percent) experienced negative total income margins, despite their median total income margins of 2.4 percent. This was more than the percentage for non-safety-net hospitals (28 percent) and slightly more than that for secondary safety-net hospitals (32 percent).

Select for Figure 9 (5 KB), Hospitals With Negative Total Income Margin.

Select for Figure 10 (7 KB), Median Margins.

Public Safety-Net Hospitals Fare Worse Financially Than Other Safety-Net Hospitals

  • In terms of patient revenue margin, public safety-net hospitals fared much worse than other hospitals with -6.7 percent compared to -0.8 percent for non-profit safety-net hospitals and 2.2 percent for investor-owned safety-net hospitals.
  • Public safety-net hospitals had a lower median total income margin (1.7 percent) than non-profit (2.5 percent) and investor-owned (2.6 percent) safety-net hospitals.

Select for Figure 11 (10 KB), Median Margins of Hospitals by Hospital Ownership.

  • Thirty-four percent of public safety-net hospitals experienced a negative total income margin, which was similar to the proportion for the non-profit (37 percent) and of investor-owned (36 percent) safety-net hospitals.

Select for Figure 12 (7 KB), Hospitals With Negative Total Income Margin by Hospital Ownership.

Uninsured Patients in Public Safety-Net Hospitals Have Greater Resource Needs

  • Public safety-net hospitals have a higher proportion (81 percent) of their uninsured patients who are seen for non-obstetrical reasons, as compared to non-profit (75 percent) and investor-owned (61 percent) safety-net hospitals. Non-obstetrical treatment tends to be more costly than other categories of treatment.
  • The uninsured in public safety-net hospitals have a higher casemix index (DRG weight) when compared to the uninsured in non-profit and investor-owned safety-net hospitals, 1.04, 0.97, and 0.87, respectively. This means that, on average, the uninsured in public safety-net hospitals tend to have conditions that are more costly to treat.

Select for Figure 13 (11 KB), Type of Conditions Seen in Uninsured Patients in Safety-Net Hospitals.

Select for Figure 14 (5 KB), Casemix Index for Uninsured Patients in Safety-Net Hospitals.

Rural Safety-Net Hospitals Are Especially Vulnerable

  • Rural and urban safety-net hospitals have similar median patient revenue margins of about -3 percent.
  • After subsidies and government budget allocations are added to net patient revenue, rural safety-net hospitals have a median income margin five times lower than urban safety-net hospitals: 0.5 percent compared to 2.5 percent.

Select for Figure 15 (8 KB), Median Margins of Hospitals by Urban/Rural Location.

  • Thirty-eight percent of rural safety-net hospitals have negative total income margins, compared to 34 percent of urban safety-net hospitals.
  • For secondary safety-net hospitals, the disparity between rural and urban hospitals is larger. Thirty-seven percent of rural secondary safety-net hospitals have negative total income margin, compared to 26 percent of urban secondary safety-net hospitals.

Select for Figure 16 (6 KB), Hospitals With Negative Total Income Margins by Urban/Rural Location.

Financial Status of Teaching Safety-Net Hospitals is Mixed

  • Safety-net hospitals that were also teaching hospitals had a relatively high negative median patient revenue margin (-9.6 percent).
  • Teaching safety-net hospitals were quite successful in obtaining subsidies, government allocations, and other revenue to achieve their total income margin of 1.2 percent. This was lower, however, than the median total income of non-teaching safety-net hospitals (2.5 percent).

Select for Figure 17 (7 KB), Median Margins of Hospitals by Teaching Status.

  • The percent of hospitals with negative total income margins was similar for teaching and non-teaching safety-net hospitals (33 and 36 percent, respectively).
  • However, among secondary safety-net hospitals, teaching hospitals were much less likely than non-teaching hospitals to have negative total income margins (10 and 35 percent, respectively).

Select for Figure 18 (6 KB), Percent of Hospitals With Negative Total Income Margin by Teaching Status.

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