In the past decade, increased competition with other hospitals, rising demand from uninsured patients, and decreased revenue from payers resulted in a number of safety net hospitals adopting strategies that often mimicked non-safety net hospitals, including limiting their exposure to uncompensated care, managing payer mix, and expanding into more profitable service lines and communities to attract private payers (Cunningham et al. 2008). Some hospitals have limited their exposure to uncompensated care by reducing or eliminating certain service lines—such as mental and behavioral health—that are often heavily utilized by vulnerable populations but tend to produce less revenue than other service lines, such as oncology and cardiac care. Although such activities did not result in an explicit change of mission, some hospitals were consciously trying to change their safety net image in order to appeal to a broader spectrum of patients. In Massachusetts, such activities by some safety net hospitals were spurred in part by the state’s health reform, which—along with the decrease in state subsidies—compelled safety net hospitals to more vigorously compete for the newly insured patients, who now had a wider range of choices.
Such competitive pressures could intensify nationally. Yet, given the estimated 31 million who will remain uninsured, many policymakers agree that there will still be considerable need for safety net hospitals. As in the past, safety net hospitals will need to walk a fine line between engaging in activities designed to maintain or increase their margins and still being an essential provider of inpatient and outpatient services to low-income, uninsured people.