Safety Net Association of PA

Why are safety-net hospitals worse off financially?

Government programs such as Medical Assistance, CHIP, and Adult Basic - major payers of safety-net hospitals – significantly underpay for hospital services. In Pennsylvania today, Medical Assistance payments generally cover less than 80 percent of the cost of providing care. When payments do not cover the costs of treatment for a significant portion of the patients that a hospital serves, that hospital is put in financial jeopardy. The more Medical Assistance patients these hospitals serve, the more money they lose – and Pennsylvania's safety-net hospitals care for more Medical Assistance patients than other hospitals. Because of where they are located, moreover, hospitals that care for more Medical Assistance patients also care for more uninsured patients – yet another financial challenge these safety-net hospitals must overcome. Overall, safety-net hospitals serve more than three times as many Medical Assistance patients and nearly two-thirds more uninsured patients than other Pennsylvania hospitals.

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