Time Stamps

  • 00:00 Hahnemann University Hospital
  • 04:52 What is a Safety Net Hospital?
  • 11:31 The Origins and Paradox of the Safety Net Hospital


S: Hi everyone! I am very excited to feature today’s episode. A little bit of a backstory – I’ve had the pleasure of working with Dr. Michael Shen on the career paths series, the telehealth episode and many more and gosh if you haven’t listened they’re gems. Michael is a master creative thinker with audio, graphics and everything btw. He had the opportunity this year to be a Health Affairs Podcast Fellow where he created a 3-episode series about a health policy topic near and dear to all of our hearts as internists – safety net hospitals. Wherever you’re coming from, you’ve probably trained in one. We can’t call this Core IM if we don’t highlight the all things that are Core to Medicine – so that’s not just the latest on hyponatremia or health failure, but also the complex questions plaguing the healthcare system we have. How essential are safety net hospitals in caring for low income Americans? How do we pay for that care? And why are safety net hospitals barely surviving?

Check out the series by looking up the Health Affairs Pathways podcast – wherever you listen. We’ll also link it in the show notes. Without further ado, here’s the first episode.

Links to other episodes:

A Complex Patchwork of Supplemental Payments:


The Future of Safety Net Hospitals & Payment Policies:



1. Hahnemann University Hospital

Michael Shen: When Hahnemann University Hospital was under threat of closure in 2019, it drew national attention.

“Today health professionals rallied over what they’re calling a public health emergency that will happen when Hahnemann pulls the plug…”

Michael Shen: Philadelphia is a city wracked by the highest poverty rate among the nation’s ten most populated cities. What would it do without its single largest safety net hospital?

“Keep it open, keep it open, keep it open…”

Michael Shen: In September of 2019, Hahnemann Hospital finally locked its emergency room doors for good. Its closure displaced nearly 2500 healthcare staff, 570 medical trainees, and over 50,000 patients, nearly all of whom had public insurance or were uninsured.

In the months following the closure, nearby hospitals saw a 15-20% jump in their emergency room volume, increases that most likely put stress on both staff and patients.

My name is Michael Shen, and as a primary care doctor, I wonder what happened to all of those people, and the relationships built over time within the hospital – so many of them lost, severed. Those same patients already experienced barriers to accessing care, and now one more door was closed to them.

When I was still in medical training, I spent half my time rotating through a well-endowed, private hospital, and the other half just down the street in the public hospital, a safety net hospital. I remember being surprised by how different the two worlds felt, how different even the waiting rooms looked, and I wondered – why, in a wealthy nation like America, do I see such differences in healthcare, right across the street from each other? Why do safety net hospitals, which serve the most vulnerable Americans, exist on such thin financial margins? And something I still wonder today…what’s keeping my hospital from ending up just like Hahnemann?

Welcome to a three-part series – the story of America’s safety net hospitals and how we pay for them – from Health Affairs. Again, my name is Michael Shen. I’m a primary care doctor in New York City’s public hospital system. Today, in Part I, we’ll explore what safety net hospitals are and their critical role in caring for America. This is… “A Disproportionate Share”.

So, Hahnemann Hospital, at the time of its closure, was owned by a private equity firm and that company made the decision to shut it down because, in the end, they couldn’t turn it around; it just wasn’t profitable. Now what happened at Hahnemann will go down as a historically significant event in health policy forums – the closure of a large urban hospital affiliated with a major academic medical center – it raises red flags about the state of care for vulnerable populations.

2. What is a Safety Net Hospital?

Michael Shen: But before diving into why safety net hospitals are at risk, I wanted to start with the basics of what a safety net hospital is. For some people, they might have a mental image of a large urban hospital in the inner city, and for others they might think of a small rural hospital in the countryside, and for the most part, they’re both correct.

Paula Chatterjee: Safety net hospitals are not a monolithic concept. And so for that reason, we actually don’t have a universally accepted definition for how we define safety net hospitals. 

My name is Paula Chatterjee. I’m a physician and assistant professor of medicine at the University of Pennsylvania. 

Michael Shen: She’s Dr. Chatterjee is also a senior fellow at the Leonard Davis Institute of Health Economics.

Paula Chatterjee: We’re often left with this like – know it when you see it determination. 

Michael Shen: In fact the lack of an accepted definition is a major policy challenge which we’ll get to later in the series. But let’s start with the “you know it when you see it” definition. The key element is that of healthcare access.

Paula Chatterjee: Care for low income patients, care for patients of color is really concentrated in that the majority of care is provided in a very small subset of facilities.

Michael Shen: What she’s saying here is that most care for those who can’t afford it takes place in a select group of hospitals – safety net hospitals, the focus of much of Dr. Chatterjee’s research.

Paula Chatterjee: And it was really that observation of how concentrated care is that stood out to me, and made me ask the question of why. And that sort of led me to, to sort of understand what the concept of the safety net meant in the US. You know, if you talk to folks from other health systems around the world, our concept of a safety net is different from theirs. You know, our healthcare safety net is very much rooted in this concept of insurance and how you pay for your medical care and that is a somewhat uniquely American concept.

Michael Shen: In countries with universal health insurance, there’s no concept of a safety net hospital because there’s no need for one – everybody has access, at least from an insurance standpoint.

Paula Chatterjee: So colloquially, when we think about safety net hospitals, they’re typically these hospitals that disproportionately serve low income, uninsured, or underinsured patients. 

Michael Shen: And I want to pause here to point out that word – disproportionate. Safety net hospitals are those that take care of a disproportionate share – a certain higher percentage, as defined by policy – of uninsured and Medicaid patients. And one of the main funding mechanisms for supplementing that care is also called the Disproportionate Share Hospital payment, or DSH payment. But for now, put that term in the back of your mind, cuz we’ll talk more about it in Episode 2.

Paula Chatterjee: However, the types of hospitals that fall under this big umbrella vary a lot across local contexts and geography. So, for example, safety net hospitals in urban areas tend to be these large nonprofit academic teaching hospitals. In rural areas, safety net hospitals can look different. They can be these smaller facilities that are often sort of the sole providers of care for these large geographic areas.

Michael Shen: An easy way to think about it is that this represents the different forms of limited access we might see: one is insurance status; another is geography.

Safety net hospitals can also vary by ownership. They can be public, like a county hospital, or like the public hospital system that I work in, NYC Health+Hospitals. They can also be private and hold either non-profit or for-profit status. Hahnemann, for example, was a privately-owned for-profit hospital at the time of its closure. Ultimately, it’s really about being the door to healthcare for those who have structural barriers to access, regardless of insurance status, ability to pay, and immigration status.

Paula Chatterjee: And I think this heterogeneity makes sense, right? Safety net is a broad term and it’s meant to capture many different aspects of what it means to have limited access to care.

Michael Shen: But there is also a more nuanced conversation, beyond just the population a hospital serves.

Matt Siegler: The most important thing about being a safety net hospital is wanting to be a safety net hospital.

Michael Shen: I spoke with Matt Siegler, Senior Vice President of Managed Care and Patient Growth in the system where I work, NYC Health+Hospitals.

Matt Siegler: Does your culture internally, your physicians, your teams, your leadership, view that safety net status as an asset and a part of the mission. If you view it as a disadvantage, I think that sets you up for a lot of struggles.

Michael Shen: There are hospitals that for various historical reasons serve disadvantaged and low-income communities. 

Matt Siegler: There are all kinds of structural issues, structural racism, demographic issues, economic redlining, other things that move certain populations towards certain hospitals and make them into lower resourced hospitals that end up being called safety net hospitals.

Michael Shen: So by the numbers, they meet the definition for a safety net. But an even more nuanced definition, their actions, the services they provide, their underlying drive and mission – do those go toward fulfilling the essential needs of the community?

Matt Siegler: For policy makers and for healthcare leaders, that orientation of – is this the community I wanna serve, and is this the mission I want to have, or am I struggling to be a well-resourced hospital that chases after commercial business – is an important one to kind of gut check with yourself as a leader and as a policymaker and in all these conversations.

Michael Shen: And so I when I think about the work that my hospital system does, I really feel like we embody all of that – in addition to emergency, trauma, and inpatient services, my hospital invests in things like primary care, HIV care, psychiatric care, substance use treatment, dental services, OB and prenatal care. These are all considered essential services. In addition, we charge sliding scale fees if you can’t afford to pay, and we have an access program if you don’t have documentation.

And then, I look across the street at the glass facade of the other hospital, where I also used to work, where we provided a range of advanced specialty services, but for a completely different patient population, a population that, to me, seemed very different by income and race.

And it really made me wonder – what is the course of historical health policy that brought us to where we are now, in need of that safety net to catch those who can’t afford care at the wealthy hospital?

3. The Origins and Paradox of the Safety Net Hospital

Michael Shen: It used to be that philanthropic hospitals ruled the scene of charity care, that is, care for low income individuals . By the turn of the century, these hospitals had started becoming more for-profit, seeing patients both rich and poor, and generating patient revenue.  But during this time, in the 1900s, the Jim Crow era was also in full swing, and a lot of these hospitals were actually segregated by laws that denied equal access to healthcare – for example a 1915 Alabama law that said that white nurses couldn’t take care of black male patients. And a 1917 Mississippi law that said every hospital had to have separate entrances and waiting rooms for white and black people. Apart from these biracial hospitals, there were also white-only facilities that denied black patients completely.

I mention this background because it’s important to understand the state of healthcare when the Civil Rights movement arrived in the 1960s, bringing along with it Medicaid and Medicare in 1965, both of which are essential to our conversation about safety net hospitals. In fact when it comes to the Civil Rights movement, it’s often stated that Medicaid and Medicare are two of the most underrated and significant Civil Rights achievements in our history.

Brietta Clark: This was an incredible step forward in terms of helping the most vulnerable people. And in particular it definitely helped racial minorities, especially many of the Black people who had been excluded from healthcare.

Michael Shen: This is Brietta Clark, professor of law at Loyola Law School in Los Angeles.

Brietta Clark: It was the key financial leverage that the federal government was able to use to actually enforce civil rights laws that were passed in 1964, in particular the laws prohibiting discrimination on the basis of race by recipients of federal funding.

Michael Shen: Medicaid and Medicare meant that all of a sudden, hospitals were major recipients of federal funding.

Brietta Clark: And that meant that the government had leverage to go after them and say, you can’t exclude black people anymore. Not only can you not exclude them, you can’t segregate them even within your hospitals, which is something else that was happening. You’ve gotta give them truly equal care. 

Michael Shen: Medicare, which is government sponsored insurance for the elderly, was and still is a very politically favorable program, and at its inception, it forced the desegregation of every hospital in America virtually overnight. But when it comes to Medicaid, which is government insurance for low income people, Professor Clark says that there’s a paradox in the way it’s enacted that undermines some of that progress. 

Brietta Clark: But of course nothing’s perfect. And so there are a few reasons why even as it was actually helping in many ways to try to provide essential healthcare for minority populations, it at the same time continued to exclude primarily minority populations and helped reinforce a system of unequal care.

Michael Shen: And there were a few ways it did that. Medicaid originally only covered certain categories of people who were deemed deserving of aid.

Brietta Clark: Children, in some cases, pregnant women, in very few instances, low income families, which got expanded over time to cover more low income families, people with severe disabilities, who could not otherwise work. And so that did a couple of things. First it meant that there were a lot of people who could work, wanted to work, had been excluded, but still could not afford healthcare.

Michael Shen: And I also think it reinforces a certain kind of stigma.

Brietta Clark: Of people who can’t somehow get it on their own, right. If you’re not somebody we’ve deemed as worthy and deserving of help in this system, you know, we see you as somebody who somehow has failed in character or in your work ethic. 

Michael Shen: And this culture of the deserving and undeserving, that’s a mentality that has real effects on Medicaid policy and safety net funding.

Brietta Clark: It basically kind of creates a kind of snowball effect for other health policies, other social supports, that we kind of were looking at considering how to reform over the years and which kept getting stymied by this notion of people who aren’t deserving and not wanting to help the people who aren’t deserving. So that’s what’s really made it so hard until the Affordable Care Act to be able to make such inroads in terms of providing these essential supports.

Michael Shen: And part of the way that Medicaid is structurally vulnerable is in the way that it’s administered, through the states.

Brietta Clark: In a way that a lot of people don’t talk about, but that’s part of the record of why Medicaid is structured differently from Medicare. So Medicare, the program tied to social insurance, thought of originally to help retirees, is a federal program, and so there’s a universal nature to that. There’s a commitment to that that withstands political attack. 

Michael Shen: Medicare has always been politically favorable because it covers people who’ve worked their whole lives, are now retired, and “deserve” care.

Brietta Clark: Medicaid though, the program that was seen as helping folks who were poor, and again only the very deserving so we have to be very careful about who we let into that program, that was structured as a state based program.

Michael Shen: Medicaid is funded by both the federal government and states, but the states determine where that money goes and how it’s used.

Brietta Clark: The states are the administrators, and they have tremendous discretion in how they designed the program. At the time it was enacted, it was very clear that one of the reasons this compromise came about is that there were Southern states that did not want to be forced to participate in a program that would start forcing them to treat certain groups equally, to start giving resources to groups that they’d excluded. That was seen as something that was going to be too disruptive. And so it was very much that system of segregation that predated 1964 that was still in the ethos and culture, that led to treating Medicaid less favorably. And because of this history, Medicaid, which is essential to Safety Net Hospital functioning, has been vulnerable ever since.

Brietta Clark: It has been especially vulnerable to federal attacks. But it is also extremely vulnerable to state attacks. Whenever states go to cut their budgets, one of the first places they cut is Medicaid.

Michael Shen: About 1 in 5 Americans are covered by Medicaid – it’s the primary source of health insurance coverage for low-income Americans. But because of the way health insurance and Medicaid work in this country, a lot of people still aren’t covered or are underinsured, and many of them are people of color. That’s the paradox that Professor Clark is talking about – that we created a solution but that solution doesn’t work for everyone. These are the underpinnings of our safety net hospital system.

In the next episode we’re going to dive more deeply into hospital financing and understand some of the current day challenges facing our safety net hospitals. You’re listening to…A Disproportionate Share. See you next time.

Special thanks to the team at Health Affairs – executive producer Jeff Byers, senior editor Kathleen Haddad, and podcast fellow Tracey Fasolino. Music was composed and produced by Saul Guanipa.


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