HOW MUCH CAN THE SAFETY NET HOLD?

The rising number of uninsured and the expansion of Medicaid managed care are straining the financial viability of the current health care safety net

The US health care system presents a troubling paradox: While perhaps the most sophisticated of any, it has among the worst health indices in the industrialized world. For millions, health care is available only through the largely public "safety net" of agencies organized specifically to serve the poor, uninsured, and otherwise vulnerable. Yet, this network itself has become endangered, through shifting policies and lessened support.

Assessing the current challenges facing that safety net--and the measures needed to keep it intact--has been the goal of a recent federally funded study. On March 30, 2000, the Institute of Medicine (IOM) of the National Academy of Sciences released its much-anticipated report, America's Health Care Safety Net: Intact but Endangered. [2] The report portrays a system in crisis and calls for a series of initiatives to repair and strengthen it.

Increasing Need for Reform

Funded by the US Department of Health and Human Services' Health Resources and Services Administration (HRSA), the IOM study attempted to capture the impact on safety net providers of waning political support, funding cuts, and the rapid expansion of managed care. It concluded that, in the absence of massive reforms, the safety-net delivery system could collapse. That such a collapse would compromise the health status of millions of Americans is clear. More than 34.5 million people in the United States fall below the official poverty line, for a staggering poverty rate of 12.7%. [2] Our health care industry comprises approximately 14% of the gross domestic product, and health care expenditures exceed $1 trillion annually. Yet we are one of the few major industrialized nations that does not guarantee health insurance to all residents, [3] leaving 44 million persons without such coverage. [4] An estimated 48 million currently lack access to quality health care (Figure 1). We rank 19th worldwide in infant morta lity, 21st in life expectancy for men, and 16th in life expectancy for women. [5]

Those numbers--and the significant disparities in health status that persist between racial and ethnic groups, poor and non-poor, women and men--are likely to increase. By the year 2050, one third of Americans will be people of color; within the next 25 years, Hispanics will become the single largest ethnic group in the United States. [6] If current trends continue, these persons will more likely be living at or below the poverty line and will not have access to health services equivalent to that of whites. [6]

Role of the Safety Net