Urban safety-net hospitals vulnerable to Medicaid cuts: analysis – Healthcare Dive

Report on the Impact of Medicaid Reductions on Urban Safety-Net Hospitals and Sustainable Development Goals

Executive Summary

An analysis conducted by the Harvard Quality and Outcomes Lab and the New York Times indicates that Medicaid reductions legislated under the One Big Beautiful Bill Act will disproportionately impact urban safety-net hospitals. This policy threatens progress towards several Sustainable Development Goals (SDGs), including those concerning health, poverty, and inequality. Despite legislative relief efforts focusing on rural facilities, the report highlights that urban hospitals, which serve a significantly larger patient base, are most vulnerable, thereby challenging the core principles of universal health access and equitable community support.

Impact Analysis in Relation to Sustainable Development Goals

SDG 3: Good Health and Well-being

• The legislation introduces measures, such as work requirements, that are projected to increase the number of uninsured Americans, directly undermining the goal of achieving universal health coverage (Target 3.8).
• The resulting financial strain from reduced revenue and increased uncompensated care places essential health services at risk, as safety-net hospitals may be forced to close or cut services.
• The report identifies 109 hospitals as highly vulnerable, comprising facilities that are already financially distressed and serve a large share of Medicaid patients.

SDG 10: Reduced Inequalities & SDG 1: No Poverty

• A significant policy imbalance is noted, with a $50 billion rural health fund being established while 85% of the most at-risk hospitals operate in urban areas. This approach risks deepening health and economic inequalities between populations (Target 10.3).
• By limiting access to the Medicaid safety-net, the policy weakens social protection systems (Target 1.3) and increases the likelihood of individuals facing catastrophic healthcare expenditures, a key driver of poverty.

SDG 11: Sustainable Cities and Communities & SDG 8: Decent Work and Economic Growth

• Urban safety-net hospitals represent critical infrastructure essential for the health, safety, and resilience of cities (Target 11.1).
• A substantial portion of the vulnerable hospitals, nearly 40%, are major teaching institutions that serve as vital economic engines and major employers within their communities.
• The financial precarity of these institutions poses a direct threat to local economic stability and the provision of decent work for thousands of healthcare professionals (Target 8.5).

Policy Recommendations for Alignment with SDG Commitments

To mitigate the adverse effects and ensure healthcare policy supports sustainable development, the following recommendations are put forth:

1. Targeted Financial Oversight: Policymakers should implement rigorous monitoring of the financial health of all at-risk safety-net hospitals to prevent closures that would compromise public health infrastructure.
2. Equitable Fund Allocation: The structure of the $50 billion Rural Health Transformation Program should be reconsidered to ensure that financial support is directed to the institutions in greatest need, thereby addressing the acute vulnerability of urban hospitals.
3. Strengthening Support Mechanisms: Lawmakers are urged to explore and enact supportive policies, including the reversal of cuts to Medicaid disproportionate share hospital (DSH) payments, which provide critical supplemental funding to hospitals serving high numbers of uninsured and low-income patients.

Analysis of the Article in Relation to Sustainable Development Goals (SDGs)

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 3: Good Health and Well-being
   • The article’s central theme is the financial stability of hospitals and access to healthcare services, which are fundamental to ensuring healthy lives. It discusses how Medicaid cuts threaten the operations of safety-net hospitals, which provide care to vulnerable populations. The potential for these hospitals to “close their doors or cut services” directly impacts public health and well-being.
2. SDG 10: Reduced Inequalities
   • The article highlights how the Medicaid cuts disproportionately affect specific groups and locations. It points out that “85% of hospitals most vulnerable to the reductions… operate in urban areas” and serve a large share of low-income Medicaid patients. This creates an inequality in healthcare access and outcomes between different socioeconomic groups and geographic areas (urban vs. rural). The policy’s focus on mitigating impacts on rural facilities while urban ones are more vulnerable further underscores this theme.
3. SDG 11: Sustainable Cities and Communities
   • The issues are strongly linked to urban communities. The article explicitly states that the most vulnerable “safety-net facilities… operate in urban areas.” These hospitals are critical infrastructure providing essential services to city dwellers. Their potential failure due to financial distress threatens the sustainability and resilience of these urban communities by removing a crucial component of their social safety net.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services… for all.
   • The article directly relates to this target by discussing Medicaid, a key program for health coverage in the U.S. The prediction that “Millions more will likely become uninsured” as a result of the new law signifies a move away from universal health coverage. The “growing burden of uncompensated care” on hospitals is a direct consequence of a lack of financial risk protection for patients.
2. Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of… economic or other status.
   • The legislation’s impact on Medicaid beneficiaries, who are primarily low-income individuals, threatens their social inclusion by potentially cutting off their access to healthcare. The article notes that vulnerable hospitals serve a “high share of Medicaid patients,” making this group particularly susceptible to the negative outcomes of the policy.
3. Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services…
   • Healthcare provided by urban safety-net hospitals is a “basic service” for urban populations. The article warns that these hospitals “could close their doors or cut services if their finances worsen,” which would directly undermine access to this essential service for residents of the affected urban areas.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For Target 3.8 (Universal Health Coverage):
   • Number of uninsured people: The article explicitly mentions the Congressional Budget Office’s projection that “Millions more will likely become uninsured” as a direct indicator of declining health coverage.
   • Level of uncompensated care: The article points to a “growing burden of uncompensated care” for hospitals as a key financial concern, which serves as an indirect measure of the population’s lack of financial protection against healthcare costs.
   • Availability of essential services: The risk of hospitals “cutting key services” is mentioned, which can be measured to track access to quality healthcare.
2. For Target 10.2 (Social Inclusion):
   • Proportion of the population covered by social protection programs: The number of people enrolled in Medicaid is a direct indicator. The article mentions that new “work requirements for some Medicaid beneficiaries to stay enrolled” will affect this number.
   • Number of vulnerable hospitals: The report identifies “109 hospitals” that are most vulnerable. Tracking the financial health and operational status of this specific group of hospitals, which predominantly serve low-income patients, can serve as an indicator of inequality in the healthcare system.
3. For Target 11.1 (Access to Basic Services in Cities):
   • Number of urban safety-net hospitals closing or reducing services: The article’s primary warning is that vulnerable urban hospitals “could close their doors or cut services.” This is a direct, measurable indicator of access to basic healthcare services in cities.
   • Geographic distribution of vulnerable hospitals: The finding that vulnerable hospitals are “more concentrated in the Northeast and West” allows for geographic tracking of access to care in different urban regions.

4. Table of SDGs, Targets, and Indicators

Source: healthcaredive.com