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Healthcare Organization in the USA


Healthcare in the USA represents a highly complex, overloaded, and underfunded system with a great number of facilities that are currently available for fewer numbers of people. In general, US medical care is divided into private hospitals, public hospitals, and not-for-profit organizations. All kinds of hospitals are funded from different sources, including federal resource allocation, subsidies from welfare contributors, and reimbursement from private insurance providers. However, the research indicates the uneven distribution of patients among these kinds of hospitals. Due to the recession that started in 2008 too many people lost their jobs because of massive layoffs; this is why the overload for public hospitals increased substantially. Consequently, people who used to receive medical insurance benefits from their employer lost them; in addition, children of those who became uninsured also lost their medical coverage.

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The essence and causes of a public health crisis

The current situation is highly troublesome both for the government and for those badly needing medical care but being unable to receive it in other ways but through public hospital help. Existing public hospitals that experience the unpredictable pressure and skyrocketing demand were forced to closure; many others are ranging from crisis to heavy overloads, being unable to meet the patients’ demands. Thus, the questions that arise today in the context of public health-related research are the following: What problems do contemporary public hospitals meet? What are the major causes of them? How is health reform likely to affect the situation with the US public health? What is the possible range of solutions for the problems public hospitals face up to date? All these questions are to be answered in the present literature review that examines the essence of public hospitals, their functions, and groups of the population they service as well as the challenges that arose in the public health sector nowadays.

To answer the first and the second questions, one needs to have a deeper historical look into the tendencies evident in public health – during the past decade, a significant decline in the number of public hospitals was observed. The number of public health institutions in suburbs reduced by 27% (from 134 to 98), and in cities the figure reached about 16% (from 83 to 70) (Higgins, 2005). The common reasons for this are the downsizing of operations and consolidation. These activities were undertaken because of the inability to sustain hospitals aimed at servicing vulnerable groups of the population, i.e. uninsured patients with little access to medical care (Higgins, 2005). The situation continued to worsen with the growing number of uninsured residents of the US and American citizens, which increased pressure on emergency rooms of medical institutions of other types – when public hospitals located in a certain community closed, uninsured patients, started to use their ability to turn to ER on a free basis more intensely (Higgins, 2005).

The impact of health care reform

One more challenge that public hospitals face nowadays is noted in the article of Fishman (1997) – he indicates that the modern period poses innovative market challenges for public hospitals, requiring them to obtain a competitive, price-sensitive structure and face growing constraints of public spending. Public hospitals need to adapt to new market conditions that exist in the sphere of health care providers in the USA, which is in its essence complicated because of extremely low levels of reimbursement from uninsured patients. Getting health care and medical services they need, uninsured patients with low incomes are highly unlikely to pay the hospital back, which worsens the financial situation further (Fishman, 1997). Thus, the author argues that the gravest problem for public hospitals is the uncompensated care they provide, especially under the conditions of prospective cuts in public health funding meant by the introduction of healthcare reform in the USA (Will safety net hospitals survive health reform? 2009).

It is important to note that the healthcare reform mentioned is certain to produce a wide range of effects on the public health care system, and most of them will probably be negative. Revenues for disproportionate share hospital (DSH) that are now keeping the majority of public hospitals afloat under the conditions of being overcrowded and over-needed for uninsured patients and their children will soon be reduced by $20 billion, which constitutes about 8% of public health financing (Will safety net hospitals survive health reform? 2009). The reduction is justified by the White House by the awaited effect of the planned health reform: lawmakers state that the more people get their insurance, the fewer of them will need public health care. Nonetheless, the point that the US legislators have not taken into consideration is that such groups as illegal immigrants, mentally ill people, and drug addicts will remain as public health consumers, and reduction financing will still influence the ability of public hospitals to cater to their needs and threaten it substantially (Will safety net hospitals survive health reform? 2009).

Healthcare reform needs separate consideration in the context of the present literature research – much literature is dedicated to its major provisions and possible effects it may bring to the medical care system of the country. As Redlener and Grant (2009) argue, the reform is likely to make insurance coverage affordable for vaster categories of people. But taking into consideration the prior situation with public hospitals that received partial compensation, and still, thousands of people died being unable to receive help (2,000 in 2006), it is hard to imagine how the situation will change in case financing will be reduced and large groups of healthcare recipients will still need public medical services. Nowadays a huge number of people get help under the HRSA and SCHIP laws that serve the underinsured patients, encourage young professionals to enter the field of healthcare provision, etc. As soon as more US citizens get their coverage, it is highly improbable that there will be much less population that will need public services. For this reason, the changes presupposed by the health reform will surely bring another crisis to public health that will aggravate the situation in many hospitals and will aggravate the situation further (Redlener and Grant, 2009).

Under these conditions, it is hard to imagine a hospital that would do well in the period of recession, growing unemployment, and skyrocketing numbers of uninsured people. Public hospitals face modern challenges differently, sometimes being forced to sacrifice certain services and departments. Nonetheless, they remain afloat, being able to continue providing services under the conditions of serious underfunding and growing demand. One of such examples is the Grady Memorial Hospital in Atlanta that kept operating due to gifts and grants of charity foundations (e.g. the Woodruff Foundation and the Marcus Foundation). These contributions helped save the hospital’s trauma care center and the emergency center that was fairly considered of vital importance for patients (Redlener & Grant, 2009).

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However, taking into consideration only 8% of patients having private health insurance and nearly a third being uninsured, the hospital realized it was unable to sustain the dialysis center and closed it in October 2009. The dialysis center accounted for $2 million of the overall hospital’s deficit. Patients for whom the dialysis was essential were offered services in other sites, as well as immigrants who were advised to move back to their countries where medical services would be more affordable to them. This way the Grady Memorial Hospital managed to get rid of their main trouble, balancing their budget at least to a certain extent (Redlener & Grant, 2009).

In contrast to a hospital that performs comparatively well even under the conditions of closing certain divisions, one can have a brief look at the situation in the Stroger Hospital, one of the public hospitals in Chicago. It is reported to be the last resort for the poor who cannot afford paid medical services, and it is likely to feel a heavy impact produced by the healthcare reform: mandatory co-pays and deductibles that we’re called to help finance the hospitals did not assist the Stroger Hospital in any way because patients were unable to conduct any kinds of payment. In addition, reduction in DSH payments to $42 million in 2008 and layoffs that are expected to equal 500 workers will do no good to the current situation in the Stroger Hospital (Will safety net hospitals survive health reform? 2009).

European and Australian examples

Judging from the present findings from the literature review, it becomes necessary to turn to experiences and solutions found in European countries that used to face similar problems with public health systems. According to Taylor and Blair (2002), global health expenditures have been rising considerably throughout the end of the 20th century, forcing the government to apply a set of strategies and responses to face the challenge constructively, including:

  • tax revenue to payroll-financed national health insurance, narrowing the basic package of services available to all citizens, linking hospital funding to outputs and efficiency, amalgamating hospitals into networks, increasing autonomy and incentives for management, and reducing the number of hospital beds (Taylor & Blair, 2002, p. 1).

The USA can follow this example and adopt a set of European and Australian practices to manage their public health sector more efficiently, e.g. handling a part of private health care services in a small group of hospitals instead of spending many resources on handling it, on the whole, leaving standard clinical services as a responsibility of the public sector while outsourcing sophisticated and expensive services to the private sector (Taylor & Blair, 2002). Some other examples include providing services to both public and private clients, creating integrated private-public hospitals to release the burden of financing, providing universal access, and linking public funding to performance. Enhancing competition to raise the quality of the performance would also be a very successful alternative to utilize (Taylor & Blair, 2002).


As one can see from the described situation, it is possible to make unoptimistic predictions as to the perspectives of public health in the USA. Even though it caters to the needs of the most vulnerable groups and provides healthcare to those who need it badly, being unable to pay for the most vital medical services, public health care is being mostly neglected and underfunded. The causes of the public health crisis in the USA are closely connected with unemployment, crisis, and extreme complexity of the US healthcare delivery system; however, the coming healthcare reform that is so aspired by the majority of US citizens, is likely to bring a set of new problems and challenges to public hospitals. Constant underfunding and growing demand for public healthcare services are only some of the barriers to their functioning that bring many hospitals to the dead end. Close attention needs to be paid to public health needs; here the experience of European countries can be successfully used to find some constructive solutions to the problem.


Fishman, L.A. (1997). What Types of Hospitals Form the Safety Net? Web.

Higgins, M. (2005). Public Hospitals Decline Swiftly. The Washington Times. Web.

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Redlener, I., & Grant, R. (2009). America’s Safety Net. The New England Journal of Medicine. Web.

Taylor, B., & Blair, S. (2002). Public Hospitals. The World Bank Group. Web.

Will safety net hospitals survive health reform? (2009).The Associated Press. Web.

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