Health care finance reform and market failure at King/Drew Medical Center, Los Angeles: An analysis of pediatric social outcomes in an urban public safety -net hospital

This study concerns the trade-off between efficiency-seeking approaches to public policy (represented by cost-cutting financing strategies) and equity-seeking strategies represented by the medical missions of safety-net health delivery systems and public financing programs designed to guarantee a floor of consumption for health services to disadvantaged populations. The study illuminates what happens when a society agrees collectively to pay for health care to those who cannot afford to buy it, without giving up the desire to achieve efficient allocation of society's resources. This is an analysis of how the trade-off between efficiency and equity impacts the ability of children to access health care services at the King/Drew Medical Center of Los Angeles County in the past two decades.;There is evidence that access to children health care services at the King/Drew Medical Center has been compromised due to reduction of entry into, convenience in, and satisfaction with, the healthcare system. Access was undermined when the local government implemented cost-cutting policies in response to efficiency-seeking federal and state mandates.;We are witnessing the cohabitation of market oriented financing models with safety-net health delivery systems. Hospitals that serve the poor were created because the people who lived in these poor communities, could not obtain adequate health services in a free market environment. Diminished access to pediatric health services is preliminary evidence that the re-introduction of market protocols in this environment might have generated a Second Market Failure at King/Drew Medical Center and other safety-net hospitals.