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The Second Market Failure Phenomenon in Safety-Net Health Systems: The Case of a Municipal Academic Medical Center from 1980 to 2000

The specific aim of this analysis is to demonstrate how the trade-off between efficiency and equity policy approaches affects the ability of at-risk children to access quality health care services at the King/Drew Medical Center of Los Angeles County from 1980 to 2000. The concept of a second market phenomenon is used as a framework to illustrate how efficiency-seeking behaviors of federal, state, and local government actors affected government intervention efforts initiated to remedy health care access hardships created by market failure in low-income communities. A second market failure occurs when government failure results from the reintroduction of market protocols in an environment where the market had originally failed to facilitate the distribution of basic goods and services. The review suggest that financial austerity at the Los Angeles County Department of Health Services in the context of federal, state, and local government policies that emphasized allocative efficiencies, compromised equity values by undermining access to quality pediatric services at the King/Drew Medical Center which was a municipal academic medical center.