In the United States, people without health insurance and other vulnerable populations depend on a loosely organized "health care safety net" for access to care. Three factors threaten to overwhelm the safety net: the rising number of uninsured people, now almost one fifth of the US population; erosion and uncertainty of direct and indirect subsidies for safety-net providers; and intensified competition for Medicaid patients under managed care.

Concerned about the impact of these trends on the safety net, the Health Resources and Services Administration (HRSA) commissioned a policy study by the Institute of Medicine (IOM). The original charge to the study committee was to "examine the impact of Medicaid managed care and other changes in health care coverage on the future integrity and viability of safety net providers operating primarily in ambulatory and primary care settings." The committee, chaired by Stuart Altman, PhD, broadened the scope of its inquiry to include providers of inpatient as well as outpatient care.

The IOM committee defined the safety net for health care as "those providers that organize and deliver a significant level of health care and other related services to uninsured, Medicaid, and other vulnerable patients." The committee identified "core safety net providers" by two distinguishing features: a mission or mandate to offer patients access to care regardless of their ability to pay; and a patient mix with a substantial share of uninsured, Medicaid, and other vulnerable patients.

The organization and financing of the safety net vary greatly from community to community. However, core safety-net providers typically include public hospitals, community health centers, and local health departments, along with special service providers like school-based health centers and Ryan White AIDS programs. The IOM report describes these key components of the safety net and explains how health care for the uninsured is financed in various communities. This material provides an excellent orientation for readers without a background in health policy, to whom the so-called safety net may look more like a crazy quilt.

The report goes on to analyze three major economic pressures converging on safety-net providers in the changing health-care environment. First, in a health care system built around employment-based insurance, the number of uninsured people is rising steadily despite sustained economic prosperity and low unemployment. Second, direct and indirect subsidies for safety-net providers have been cut back or jeopardized. Important developments include the retrenchment of Medicaid disproportionate-share hospital payments and the threatened phase-out of Medicaid cost-based reimbursement for federally qualified health centers. Third, expansion of Medicaid managed care programs has led to marketplace competition for Medicaid patients. This competition has diverted a stabilizing Medicaid revenue stream, or "silent subsidy," away from safety-net institutions that also serve uninsured patients.

Subsequent chapters survey how safety-net providers are adapting to the new environment and the impact of change on vulnerable populations. The committee then summarizes its findings and makes five policy recommendations: (1) recognize and address the impact of specific changes in Medicaid policies on the viability of safety-net providers and on vulnerable populations; (2) review the effectiveness of all federal programs and policies targeted to support the safety net and the vulnerable populations that it serves; (3) create a federal oversight body to improve mechanisms for monitoring the structure, capacity, and financial stability of the safety net; (4) establish a new federal initiative to support core safety-net providers, addressing the challenges of delivering coordinated, comprehensive care for the poor uninsured; and (5) enhance and coordinate technical assistance programs and policies targeted to improving the operations of safety-net providers.

These policy recommendations are practical and concrete. For example, the Community Access Program recently launched by HRSA addresses the committee's fourth recommendation. The purpose of this program is to assist communities and consortia of health care providers to develop the health care infrastructure needed to develop or strengthen integrated systems of health care that coordinate comprehensive services for the uninsured and underinsured. Applicants must represent a community-wide coalition including partners from all levels of care (primary, secondary, tertiary) and a range of services and disciplines (medical, mental health, oral health, etc). HRSA is now pursuing legislative authority to extend and expand the pilot phase of this program through a requested $1 billion allocation over a 5-year period.

The authors recognize and acknowledge one major limitation in the scope of their report. The report largely sidesteps an ongoing policy debate over direct care vs coverage. Should limited available dollars be used to provide direct care through safety-net institutions like public hospitals and community health centers? Or should they be used to expand coverage incrementally through programs like Medicaid and the State Children's Health Insurance Program (SCHIP)? For example, should unspent funds resulting from underenrollment of SCHIP be used to subsidize safety-net providers, as suggested in the IOM report? Or should they be spent instead on outreach to boost enrollment in SCHIP itself?

The new US strategic plan for health, Healthy People 2010, advances the proposition that "every person in every community across the Nation deserves equal access to comprehensive, culturally competent, community-based health care systems." In the absence of universal and comprehensive health insurance coverage, our nation will continue to need safety-net providers that provide access regardless of a person's ability to pay. This IOM report provides a well-supported analysis of current challenges facing our nation's health care safety net, along with pragmatic advice on how to strengthen it.