Stimulus funds helped safety net sites: study

Federal stimulus money last year helped safety net providers offset reductions in state, local and private funding, says a new report from the Center for Studying Health System Change.

Funded by the Robert Wood Johnson Foundation, the study focused on five U.S. communities or areas—Cleveland, Greenville, S.C., northern New Jersey, Phoenix and Seattle—and found that the recession's effects on safety net providers were not as severe as was expected in those areas. Conducted from June through September 2009, the study included research from 45 phone interviews with representatives of safety net hospitals, community health centers and free clinics.

“Safety net providers have adopted strategies to stay financially viable, but many believe they have not yet felt the full impact of the deepest recession since the Great Depression,” Laurie Felland, a senior health researcher and co-author of the report, said in a news release about the results. There were also factors other than the stimulus funding that helped these providers, such as an increase in the last decade in federal expansion grants for community health centers, as well as programs to help direct people to primary-care providers, which helped curb an expected surge in visits to the nation's emergency departments.

The report also found that many providers tried to become more efficient. “Most providers reporting trying to control labor costs, a significant portion of their operating budgets,” the report said. “Varied degrees of layoffs or reductions through attrition were reported in all of the communities, especially at safety net hospitals and free clinics, although wage freezes were more common.”

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