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When it comes to safety net hospitals, there are a handful of organizations that are benefiting from the business. They include everyone from long-term dialysis patients to older adults enrolled in home dialysis programs. But new research suggests that the costs of these programs may actually go down.

New research from UC San Francisco and Kaiser Permanente Northern California suggests that the more expensive the “safety net” hospital, the more patients and health systems that need its services. The study, published today in JAMA Network Open, suggests that higher costs at the safety net hospital represent a significant daily barrier for physicians, nurses and other healthcare administrators in making it to pay for insurance.

“These estimates show that safety net hospitals require cash flow in order to meet earning capacity,” said Lara Goldenman, PhD, a postdoctoral fellow in the UCSF Department of Management and Decision Sciences. “Without the funds needed to pay for these services, they may not survive and may not make ends meet.”

How do they make money?“At Kaiser Permanente, the cost of air-monitoring permits is $9,000 a year, which equates to about $20,000 per provider, which is a major challenge,” said Stephanie Bean, RN, a nutrition sciences fellow at Kaiser Permanente Northern California.

On the flip side, the cost of the network operating through non-health insurance hospitals may be higher: The operating budget for the Emergency Department at Kaiser Public Health has increased 53 percent since 2011, the researchers note. The hospital’s operating budget was $9,000 in 2015. By comparison, the operating cost to health systems cost about $28,000 per system. To reach this figure, researchers used an FY 2017 federal government survey to examine the average net costs claimed by U.S. health care systems as part of the Affordable Care Act, likely the largest health plan market in the United States.

The top costs for these systems are dental services: $4,640 per clinician; a pain specialist: $1,005 per clinician; and radiology services: $423 per clinician.

Patients who need several additional services to meet the criteria — such as staff, supplies and medical protocols — are more likely to see savings: ​$1,714 per clinician.

Braille assistance: $2,325 per nurse.

Fashion donation services: $1,428 per pair, the lowest among all four safety net hospitals. Staffing was also a given: ​$1,292 per nurse, while operating staff earned $657 while working in the emergency department.


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