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Our Nation's Essential Hospitals Are Severely Under-Resourced

— More clearly defining these safety net providers can enable targeted support

Ƶ MedicalToday
A photo of the emergency entrance to a hospital.

As the nation continues the COVID-19 battle while facing an emerging public health emergency (monkeypox) it is time to take stock of the challenges that remain for hospitals at the center of our healthcare safety net -- essential hospitals -- and to target them with support to meet these and future public health threats.

The pandemic's costs weighed heavily on essential hospitals -- and still do. These safety net providers shoulder a disproportionate share of the nation's uncompensated care and have long operated with margins a fraction of those at other U.S. hospitals. Their fragile financial position stems from chronic underfunding, a product of fewer commercially insured patients than at other hospitals and more uninsured patients and patients with Medicaid, which pays hospitals less than their costs of care.

Due to the combined effects of these and other factors, our more than 300 member hospitals of all uncompensated care nationally while representing about 5% of all U.S. hospitals. On a per-hospital basis, that translates to about seven times as much uncompensated care at the average essential hospital than at other hospitals -- about annually.

The pandemic and its economic fallout have only compounded essential hospitals' long-standing financial woes. High spending on labor and inflation-fueled spikes in supply and capital costs continue to challenge their financial stability. Persistent workforce shortages and burnout have added to the problem. These pressures have been especially hard on essential hospitals, which anchor the front lines of care for communities that have suffered the most during the pandemic -- those with many people of color and other populations who face historical, ongoing disparities in health and healthcare.

The pandemic also tested essential hospitals' infrastructure, requiring reconfigured floor plans to accommodate the larger number of patients, makeshift barriers between patient beds, parking lot tents, and other improvised solutions. As it did for other shortcomings in the nation's healthcare system, COVID-19 shined light on hospitals' infrastructure needs, including for telehealth and other technology that transcends the limits of brick and mortar.

Stories from our members illustrate the depth of the problem. One hospital recently reported a $41 million shortfall already for 2022, and another expects an $80 million shortfall this year due to unbudgeted workforce costs. Yet another essential hospital has seen its staffing costs rise by 300% over the first half of the year.

While essential hospitals' challenges are formidable, they are not insurmountable. These and similar accounts underscore the need for robust and timely relief from Washington to help keep essential hospitals' doors open in the short term, as policymakers continue work toward sustainable solutions to the healthcare workforce crisis. By building a stable and resilient healthcare safety net, we can better respond to this public health crisis and others to come.

The first step must be to define essential hospitals -- these safety net providers are currently subject to and financial attributes. With a more widely accepted definition, we can better identify providers that fill a safety net role, assess how policies affect them, target support to this group, and protect them from harmful policies.

A good place to start would be defining the qualities they share now, including promoting equitable care and serving underrepresented racial and ethnic groups; providing high levels of uncompensated and undercompensated care; delivering specialized, lifesaving services, such as level I trauma and neonatal intensive care; training physicians and other healthcare professionals; meeting public and population health needs; and providing comprehensive, coordinated care.

With a clear and codified definition in hand, policymakers could identify new policies to stabilize funding for these hospitals and evaluate existing policies that might disproportionately harm them. A definition would allow Congress and the administration to better target support for safety net providers and guide policymaking on a variety of related issues, from care disparities to climate resiliency. Failing to define these hospitals risks our ability to target resources quickly and effectively to reach people and communities in greatest need.

While targeted support, based on a clear definition, can shore up essential hospitals' finances through the pandemic and beyond, it also can help us achieve a higher purpose: to improve equity by lifting up the providers that care for our most marginalized patients. Essential hospitals, true to their mission, devote considerable resources to combating disparities and helping people overcome social factors and systemic barriers to care that lead to poor health and amplify the effects of COVID-19.

Reducing disparities, promoting equitable care, and combating structural inequities will require a robust, resilient safety net -- and a sustained commitment to providers that care for those who most often experience society's inequities. It also demands we resist the urge to move on from the pandemic and instead recognize the pressing and ongoing needs of essential hospitals on the vanguard of work to advance health and healthcare equity.

Beth Feldpush, DrPH, is senior vice president of policy and advocacy for America's Essential Hospitals, a Washington, D.C.-based organization that advocates for more than 300 hospitals with a safety net mission.