Journal of Urban Health

, Volume 76, Issue 3, pp 351–370 | Cite as

Population characteristics of markets of safety-net and non-safety-net hospitals

  • Darrell J. Gaskin
  • Jack Hadley
Original Article


Research Objectives

To compare and contrast the markets of urban safety-net (USN) hospitals with the markets of other urban hospitals.

Study Design

To develop profiles of the actual inpatient markets of hospitals, we linked 1994 patient-level information from hospital discharge abstracts from nine states with 1990 data at the ZIP code level from the US Census Bureau. Each hospital's market was characterized by its racial and ethnic composition, median household income, poverty rate, and educational attainment. Measures of hospital competition were also calculated for each hospital. The analysis compared the market profiles of USN hospitals to those of other urban hospitals. We also compared the level of hospital competition and financial status of USN and other urban hospitals.

Principal Findings

The markets of USN hospitals had higher proportions of racial and ethnic minorities and non-English-speaking residents. Adults residing in markets of USN hospitals were less educated. Families living in markets of USN hospitals had lower incomes and were more likely to be living at or below the federal poverty level. USN hospitals and other urban hospitals faced similar levels of competition and had similar margins. However, USN hospitals were more dependent on Medicare disproportionate share payments and on state and local government subsidies to remain solvent.


USN hospitals disproportionately serve vulnerable minority and low-income communities that otherwise face financial and cultural barriers to health care. USN hospitals are dependent on the public subsidies they receive from federal, state, and local governments. Public policies and market pressures that affect the viability of USN hospitals place the access to care by vulnerable populations at risk. Public policy that jeopardizes public subsidies places in peril the financial health of these institutions. As Medicare and Medicaid managed care grow, USN hospitals may lose these patient revenues and public subsidies based on their Medicaid and Medicare patient volumes. The loss of these funds would hinder the ability of USN hospitals to finance uncompensated care for uninsured and underinsured patients.

Key Words

Hospital markets Minority health Safety-net hospitals Urban hospitals 


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Copyright information

© The New York Academy of Medicine 1999

Authors and Affiliations

  • Darrell J. Gaskin
    • 1
  • Jack Hadley
    • 1
  1. 1.Institute for Health Care Research and PolicyGeorgetown UniversityWashington DC

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