PDF Summary:The People's Hospital, by Ricardo Nuila

The U.S. healthcare system is driven by profit rather than patient care, creating significant inequality in access and quality of treatment. In The People's Hospital, Ricardo Nuila examines how the market-based approach to American healthcare has led to excessive costs and widespread coverage gaps, while safety-net hospitals struggle to provide essential care to uninsured and vulnerable populations.

Through the lens of Ben Taub Hospital in Houston, Nuila explores how publicly funded healthcare facilities operate within the Harris Health System to serve patients regardless of their ability to pay. You'll learn about the historical development of America's "medical-industrial complex," the funding mechanisms that keep safety-net hospitals operational, and the critical role these institutions play in delivering quality care at a fraction of typical costs—all while facing threats from policy changes and inadequate public support.

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The IRS failed to enforce compliance with these criteria in hospitals. Voluntary hospitals gained from their charitable tax status, enabling them to bypass federal, state, and municipal taxation and receive donations. They thrived by accepting the nonprofit tax status, offering services to those able to afford the cost. This deepened the class gap, as increasing numbers of middle-income people began frequenting the modernized hospitals. Meanwhile, impoverished Americans were limited to the overlooked public hospitals. In 1963, Houston's only public facility, Jefferson Davis Hospital, was in a state of horror.

(Shortform note: Historian Rosemary Stevens explains that this divide between public and voluntary hospitals began in the early 20th century. City governments, eager to showcase their modernity, invested in voluntary hospitals, which were funded by philanthropists and enjoyed tax advantages. Meanwhile, public hospitals like Jefferson Davis Hospital in Houston were left to languish, dependent on fluctuating government budgets and subject to political neglect. This historical context helps explain why, by 1963, Jefferson Davis Hospital was in such a dire state while voluntary hospitals thrived. The roots of this disparity lie in early 20th-century decisions that prioritized voluntary hospitals over public ones, setting the stage for the class-based divide in healthcare access that Nuila describes.)

Staph infections spread in the maternity ward, causing dozens of deaths. Babies in the nursery were crying because there was no milk. Patients were forced to remain in their own excrement and wait several days for medical care. A cockroach entered the tracheostomy tube of a child. The hospital's funding was trapped in a conflict between the municipal and county governments, both of which financed the hospital together and planned to reduce their budgets.

(Shortform note: A tracheostomy tube is a curved plastic or metal tube that is inserted into a surgically created hole in the front of the neck and into the windpipe. This allows air to pass directly into the lungs for breathing. The tube is held in place by a neck strap and has an inner cannula that can be removed for cleaning. Tracheostomy tubes are used for people who need long-term breathing support, have blocked airways, or need help clearing secretions from their lungs.)

Medicaid aimed to equalize public and nonprofit hospitals. The program started in 1965, aiming for universal coverage in five years. Those eligible for Medicaid could access care at any facility that took the insurance, which most hospitals did. The goal was to make sure economically disadvantaged people were included in conventional American healthcare. In 1970, operations among low-income individuals had increased by 40% compared to before Medicaid. There was optimism that Medicaid funding would also benefit public hospitals. However, Medicaid recipients usually opted to visit the top hospitals they could access, which typically were the newly updated nonprofit facilities.

(Shortform note: In Medicaid Politics, Frank J. Thompson argues that Medicaid was never intended to be a universal health insurance program. Instead, it was designed as a means-tested, categorical program that provided health coverage to specific low-income groups, such as those receiving welfare or disability benefits. Thompson explains that the program was structured as a federal-state partnership, with states having significant flexibility in determining eligibility, benefits, and provider payment rates. This approach reflected a compromise between those who wanted a more comprehensive, population-wide system of health insurance and those who preferred a more limited, targeted approach.)

Only people ineligible for Medicaid were forced to rely on public medical centers. In 1986, the federal government mandated that hospitals deliver emergency care, but it didn’t ensure they’d be compensated. The Emergency Medical Treatment and Labor Act (EMTALA) required hospitals with emergency departments that receive Medicare funding to offer care to anyone experiencing an emergency, irrespective of their financial situation, until they're stabilized. EMTALA had a huge impact on healthcare with mixed outcomes. It altered how doctors calculate who is ill and who can go back home.

(Shortform note: This statement may not be accurate. According to America’s Health Care Safety Net, a book published in 2000, public medical centers continued to care for a disproportionate share of Medicaid beneficiaries as well as uninsured patients. The book’s author, Dr. Marilyn Moon, explains that while Medicaid expanded access to private providers, many Medicaid enrollees continued to rely on public hospitals and clinics for their care. She notes that public medical centers remained a crucial part of the safety net, serving both uninsured individuals and those with Medicaid coverage.)

The law introduced "care that wasn't compensated" and "uneven distribution" into hospital terminology. It also prompted additional architectural modifications to hospitals, with emergency room waiting areas growing more packed than the lobbies. The ER at hospitals became the default medical facility for the uninsured, where everything was treated, from excess earwax to heartburn to incontinence. The financial uncertainty brought about by EMTALA, especially in medical centers in areas that are rural or lacking resources, caused them to either shut down or adopt survival tactics. Entire programs were shut down, and employees were forced to take on duties outside their skill sets. Setting an annual budget turned into a hopeful risk, a stab in the dark. Hospitals that are nonprofit or for-profit have needed to adjust to EMTALA to stay financially viable. Safety nets, however, have become overwhelmed.

The Impact of Freestanding Emergency Departments and Urgent-Care Chains

The “care that wasn’t compensated” and “uneven distribution” of ER burdens that Ricardo Nuila describes here were exacerbated by later developments in the emergency-care market. As Jeremiah D. Schuur and Arjun K. Venkatesh explain, the rise of freestanding emergency departments and urgent-care chains in well-insured areas siphoned off profitable visits from hospital ERs, leaving them with a higher concentration of uninsured and underinsured patients. This shift intensified the financial strain on safety-net hospitals, which were already struggling to meet EMTALA’s requirements. The proliferation of these alternative care sites also contributed to the uneven distribution of emergency-care resources, as they tended to cluster in affluent areas while leaving poorer communities underserved. This dynamic further entrenched the disparities that EMTALA had inadvertently created, making it even more difficult for hospitals to provide uncompensated care while maintaining financial viability.

Voluntary hospitals have benefited from government policies, widening the gap between them and public institutions. In the early 1900s, a fourth of the taxpayer dollars used for healthcare were allocated to subsidize voluntary hospitals, instead of public ones. The Hill-Burton Act, enacted in 1946, allocated $4.5 billion in grants and $1.5 billion in loans to update hospitals throughout the United States. Hospitals receiving this funding were meant to offer cost-free services to those who couldn’t pay the charges, though Congress didn’t specify what constituted sufficient charity or monitor the use of Hill-Burton funds.

(Shortform note: The Hill-Burton Act’s lack of clear charity-care requirements for voluntary hospitals is significant because it allowed civil-rights lawyers to use the act to desegregate hospitals. In The Power to Heal, David Barton Smith explains that the infusion of federal construction money into previously private hospital systems transformed them into “public” institutions in the eyes of the law. Civil-rights lawyers quickly realized that Hill-Burton’s requirements could be used as a lever to dismantle Jim Crow in health care: By accepting federal aid, hospitals could no longer plausibly claim to be purely private and beyond constitutional scrutiny.)

The funds supported the expansion of nongovernment-funded medical centers. In 1956, the IRS permitted hospitals to identify as charities if they lowered costs and served those who couldn't afford their fees. The IRS failed to verify if hospitals followed these guidelines. Voluntary hospitals started benefiting from the charitable tax status, which enabled them to receive donations and avoid taxes on federal, state, and municipal levels.

(Shortform note: The IRS’s decision to classify hospitals as charities in 1956 was the result of a series of policy changes that began after World War II. In 1946, Congress passed the Hill-Burton Act, which provided federal funding for hospital construction and modernization. This act required hospitals to provide a “reasonable volume” of free or reduced-cost care to patients who couldn’t pay. However, as Rosenbaum notes, the IRS’s 1969 decision to adopt a broad “community benefit” standard for tax exemption marked a significant shift.)

EMTALA required hospitals to treat patients with emergencies, no matter their capacity to pay, but it didn’t address how hospitals would be compensated. In 1986, the US Congress enacted EMTALA, which mandates that hospitals with emergency departments receiving Medicare funding must provide care to any patient in crisis, regardless of their financial status, until they are stabilized. EMTALA was a response to the widespread practice of transferring uninsured patients to safety-net hospitals, even at dire times when timely medical help was crucial to survival. The law introduced hospital jargon such as "unpaid treatment" and "unequal share." It also resulted in shifts to hospital design, as ER waiting areas became busier than the main entrances.

(Shortform note: EMTALA’s requirement to treat emergency conditions, without specifying payment, led to ER waiting rooms becoming busier than main entrances because hospitals increasingly routed patients through the ER first. This was especially true for patients whose conditions were uncertain or who lacked insurance. The ER became the legally safest entry point for anyone who might be seriously ill, so hospitals funneled more people through it. This concentrated more people in the ER’s waiting areas than at the main entrances. The law’s focus on emergencies, without addressing payment, created a system where the ER became the default entry point for many patients, leading to overcrowded waiting rooms.)

For uninsured individuals, hospital ERs essentially became their doctor’s office, where they addressed all sorts of issues, like excess earwax, heartburn, or trouble with incontinence. The financial challenges brought about by EMTALA, especially for healthcare facilities in under-resourced or rural regions, resulted in closures or survival strategies. Entire programs shut down, and staff were required to work outside their skill set. Drafting an annual budget became a hopeful leap of faith, a stab at the unknown. Hospitals that are both nonprofit and for-profit have needed to adapt their approaches to EMTALA to remain profitable. However, safety systems have become overwhelmed. These shifts in U.S. healthcare are clear in hospital wings, where the most critical and costly decisions are made. Safety-net hospitals offer the right environment for doctors in these wards to focus on medical rather than financial decisions.

The Role of Safety-Net Clinics in Reducing the Strain on Hospitals

This pattern of uninsured patients using the ER as their doctor’s office doesn’t hold true in areas where there are robust primary-care safety-net clinics. In these areas, uninsured patients have a usual source of care outside the ER, which reduces the strain on hospitals caused by EMTALA. These clinics provide a range of services, including preventive care, chronic disease management, and mental health services, which help keep patients healthier and reduce the need for emergency care. By providing a usual source of care, these clinics help patients manage their health more effectively and reduce the need for emergency care. This, in turn, reduces the strain on hospitals caused by EMTALA, as patients are less likely to use the ER for non-emergency care.

Consequences of Limited Access: Equity and Financial Strain

Being uninsured can lead to severe health consequences and financial strain. Persisting in illness results in one of two routes: the ER when the body breaks down, or the grave, which is much more common for those without health insurance. The annual average cost is almost $4,800. According to the Bureau of Labor Statistics, this represents nearly ten percent of the yearly income for someone who earns the mean American wage.

The Consequences of Being Uninsured

The Institute of Medicine (IOM) has conducted a comprehensive review of the literature on the health and financial consequences of being uninsured. The IOM found that uninsured adults are more likely to die from preventable or treatable conditions than insured adults. The IOM also found that uninsured adults are more likely to experience financial hardship due to medical bills. The IOM's findings are based on a synthesis of multiple studies, including longitudinal studies that track individuals over time and quasi-experimental studies that compare outcomes for similar groups of people with and without health insurance.

The Safety Net Response: The Ben Taub Model for Equitable Care

Next, we'll examine the operation of the Harris Health System and the value of its healthcare safety-net program.

Operational Characteristics of the Harris Health System

Harris Health System provides healthcare to Harris County residents, including undocumented immigrants, using local property taxes. Nuila explains that Texas law requires counties to ensure basic healthcare services are provided to indigent people. Harris Health System is financed via property taxes, rather than federal funding.

Public Hospital Systems’ Funding

While Harris Health System is heavily supported by local property taxes, it also receives federal funding. According to America’s Health Care Safety Net: Intact but Endangered, public hospital systems that function as core safety net providers are sustained by a patchwork of financing sources—including Medicaid, Medicare, state and local government appropriations, and federal supplemental payments such as disproportionate share hospital (DSH) funds—and no single revenue stream is sufficient to support their mission of caring for uninsured and other vulnerable patients.

Harris Health System offers a range of services, including primary care, specialty care, and dialysis, to people who can't pay for healthcare. Nuila describes it as a safety-net healthcare system that provides care to those who cannot afford it. Its services are available to everyone in Harris County, regardless of their immigration status. The system defines "indigent" as anyone with income that reaches 150% of the federal poverty threshold or below and offers financial support, which is income-dependent. Harris Health System offers a Gold Card program that provides financial assistance to locals who can't pay for healthcare. The Gold Card offers access to Harris Health's primary care physicians and specialists.

(Shortform note: In Health Care for Some, historian Beatrix Hoffman argues that the US has a long history of treating medical care for the poor as a discretionary benefit rather than a social right. She traces how, since the 19th century, access to care has depended on local residency, moral judgments about the “deserving” and “undeserving” poor, and the discretion of officials. This tradition of means-tested, locally administered care persists in modern programs like Medicaid and public hospitals. Harris Health’s definition of “indigent” and its Gold Card program reflect this legacy of limited, conditional access to care for the poor.)

In 2008, Harris Health System established the Riverside Dialysis Center, offering scheduled dialysis to Gold Card holders. The center reduces the patient load in Ben Taub Hospital's wards and emergency department. Harris Health System has introduced peritoneal dialysis. This dialysis method is preferable for many patients because it gives them more freedom and saves the system money.

(Shortform note: Peritoneal dialysis is a treatment for kidney failure that uses the lining of the abdomen to filter blood. A special fluid is put into the belly through a tube, where it absorbs waste and extra water from the blood. After a few hours, the fluid is drained out, taking the waste with it.)

Next, we’ll explore the funding and coverage mechanisms of the Harris Health System and how services are prioritized and clinical care is approached at Ben Taub Hospital.

Mechanisms for Financial Support and Coverage

Ben Taub Hospital is a member of Harris Health, and it treats uninsured patients in Houston. Nuila notes that Ben Taub is officially a place for medical education, and a large number of its doctors are medical trainees. It’s one of just two Houston facilities with Level 1 trauma certification, so there's consistently a surgical team including an anesthesiologist and a surgeon available for patients who need surgery that could save their lives.

(Shortform note: The fact that Ben Taub is a medical-training site with a 24/7 surgical team is important because it means that the hospital is always prepared to handle a large influx of patients. This is crucial in the event of a catastrophe, such as a mass shooting or a natural disaster. Smaller hospitals without trauma certification would be overwhelmed by such an event, and they might not have the resources to provide adequate care to all patients.)

Ben Taub, a leading facility in Harris Health, serves uninsured individuals in Houston. Annually, it delivers healthcare services valued over $1 billion to low-income patients. Known for its trauma care, it's fairly common to find patients who have been crushed, burned, dismembered, stabbed, shot, or tased sharing a room with patients suffering from mental illness and poverty. The facility is also known for its long wait times. Harris Health and Ben Taub received a one-star rating from the CMS in 2019. The average length of stay in the emergency room for patients prior to hospital admission was 11 hours. Five percent of individuals left without receiving treatment. Ben Taub manages the volume of cases typically handled by multiple trauma centers. The Texas Legislature's decision not to broaden Medicaid coverage places more burden and costs on local safety nets, resulting in damaged lives.

Limitations of the CMS Star Rating System

The CMS star rating system is a widely used tool for evaluating hospital quality, but it has limitations, especially for hospitals like Ben Taub that serve high-risk populations. The system adjusts for some social risk factors, but not all, which can lead to lower ratings for hospitals that care for more complex patients. For example, a study found that hospitals with the highest proportion of dual-eligible patients (those on both Medicare and Medicaid) had an average star rating of 2.7, compared to 3.3 for hospitals with the lowest proportion. This suggests that the star rating system may not fully capture the quality of care provided by hospitals serving vulnerable populations. Additionally, the system's reliance on patient experience surveys can be problematic, as patients with complex social needs may have different expectations and experiences of care. For hospitals like Ben Taub, which serve a high proportion of uninsured and underinsured patients, these limitations can result in ratings that don't accurately reflect the quality of care provided.

Service Prioritization and Clinical Approach

Ben Taub focuses on emergency and trauma treatment over elective procedures. Nuila explains that elective procedures are limited through waitlists, which may be long. Diagnostic exams are also rationed, and patients might wait several days to get an MRI. Ben Taub doesn't perform transplants because the costs would prohibit affording other therapies. The hospital mainly provides generic medications, but some newer ones that don't yet have generic versions can be accessed if an expert considers them clinically important. It conducts fewer needless exams and treatments than all other hospitals in Houston. Patients pay what their care truly costs, and they're moved out of the ER to hospital wards based on their health status, not their insurance status.

(Shortform note: Ben Taub’s limiting of elective procedures and rationing of diagnostic exams like MRI may endanger some patients. For example, a study of patients who needed cardiac surgery found that the longer they waited for surgery, the more likely they were to die or experience complications. The study’s authors concluded that the longer patients waited for surgery, the more likely they were to experience complications.)

Ben Taub focuses on providing necessary services and avoiding unneeded examinations. Nuila notes that, since it's publicly funded, it relies on taxpayer dollars and has no need to be profitable. Emergency situations are always given precedence. It's uncommon for the safety-net system to lack access to needed procedures or tests. Harris Health follows the guidelines of the National Comprehensive Cancer Network for cancer treatment and chemotherapy, though bone marrow transplants aren't conducted there. The facility doesn't perform transplants, since these operations' expenses—including infrastructure and personnel to choose, carry out, and supervise their success—would make it challenging to afford the network's other treatments.

Explicit Priority-Setting

In health-policy scholarship, this is known as explicit priority-setting, a strand of health economics and bioethics that seeks to allocate finite public funds toward services that yield the greatest overall health benefit for the population. This approach recognizes that while some treatments (like transplants) may be highly effective for individuals, their high costs and resource demands can limit access to other essential services for a larger number of patients. By following evidence-based guidelines like those of the NCCN, safety-net hospitals aim to maximize the impact of their resources while maintaining a commitment to equitable care. This framework acknowledges the ethical complexities of rationing care but argues that transparent, population-level decision-making is preferable to implicit rationing based on ability to pay.

Demonstrated Value and Impact of a Publicly Funded Healthcare Network

Ben Taub Hospital offers high-quality healthcare for less than the country's typical cost. Nuila notes that its per-patient spending is under 50% of the national average, yet it provides high-quality care. In 2015, it was the nation's leading hospital for heart attack treatment, and it offers primary and specialty care, as well as costly treatments, to patients unable to afford it elsewhere. Private insurance is billed just 2% higher than Medicare.

(Shortform note: Ben Taub’s high ranking for heart attack care is especially impressive given its low spending. In 1995, Krumholz and colleagues developed a risk-adjusted metric for heart attack outcomes that allowed for fair comparisons between hospitals. This metric, which was adopted by the Centers for Medicare and Medicaid Services, rewards hospitals for clinical results rather than spending. Therefore, Ben Taub’s top ranking suggests it’s an outlier in terms of performance.)

Safety-net programs are crucial for offering healthcare to uninsured and low-income patients. However, it’s under threat from proposed Medicaid reductions. The Affordable Care Act (ACA) aimed to broaden access to private health insurance for Americans, but it lost much of its power after the Supreme Court decided states weren't required to expand Medicaid. Texas chose not to broaden the program. The ACA reinforced the notion that private insurance ought to be the primary way Americans access healthcare. The legislation clearly left out undocumented immigrants. The ACA has flaws, but it mustn't be repealed. The latest GOP legislation poses a threat to those relying on the safety-net system.

(Shortform note: Conservative health-policy analysts like Grace-Marie Turner, James C. Capretta, Thomas P. Miller, and Robert E. Moffit, authors of ObamaCare: Why It's Wrong for America, would disagree with Nuila’s assertion that the ACA must not be repealed and that proposed Medicaid reductions primarily threaten safety-net programs. They argue that the ACA represents a federal overreach that drives up premiums, expands dependency on government, and entrenches bureaucratic control at the expense of patients and physicians. They contend that Medicaid, as currently structured, is an inefficient and poorly targeted program that too often traps beneficiaries in low-quality coverage. In their view, reforms that slow the rate of Medicaid spending growth or convert it into a capped, state-driven program are necessary steps toward a more sustainable, patient-centered safety net.)

Approximately 50% of the safety-net system's funding is derived from local taxes, while about 25% is sourced from Medicaid. A major Medicaid reduction would devastate Ben Taub Hospital and shift the financial burden of emergency services for its displaced patients to all hospitals, even wealthy nonprofit and commercial ones. Both for-profit and nonprofit medical centers depend on Ben Taub.

(Shortform note: In health-policy research, a county safety-net hospital like Ben Taub is often conceptualized as an “anchor institution” that stabilizes the regional health-care labor market and emergency-response capacity. This framework helps explain why even for-profit and nonprofit hospitals depend on the safety-net system.)