Disaster Discourse: The Hagerty Blog

Public Health Emergencies are Increasing: We Must Proactively Prioritize Funding for our Nation’s Hospitals

Our nation’s hospitals continue to reel financially from the effects of responding to the COVID-19 pandemic. A recent analysis from Kaufman Hall, a strategic financial planning consultancy for the healthcare industry, indicates hospitals are experiencing the worst operating margins since the beginning of the pandemic. How can we expect our hospitals to respond over the coming weeks to patient surges from Respiratory Syncytial virus (RSV), flu, COVID-19, and any other future Public Health Emergencies (PHEs) when they are struggling to meet the demands of daily operations – keeping beds staffed and their doors open?

Hospitalizations are expected to continue rising over the next several weeks to months from an increase in severe COVID-19 cases, RSV, and a bad flu season, stretching our existing healthcare resources even further. In Connecticut, hospitals are currently in discussions with the National Guard and Federal Emergency Management Agency (FEMA) to establish a site for medical tents to treat a large influx of pediatric patients with respiratory viruses. Across the country, 70 percent of pediatric beds are already full. The additional infrastructure, staff, supplies, and services needed to care for patients in excess of bed capacity that present during times of public health emergencies cost more than any potential reimbursement from commercial or governmental payors that reimburse healthcare delivery. Yet, our healthcare reimbursement system is not designed to cover the additional costs needed to both prepare and respond to public health emergencies, especially as we shift to a system of value and efficiency. Therefore, we must proactively prioritize public health preparedness federal funding for our country’s 6,093 hospitals.

Preparing for the Future

To realize a more resilient future while continuing to meet the consistently growing demands placed on our healthcare system, we must:

  • Develop a Federal PHE Patient Care Reimbursement Program. Just as the Federal Emergency Management Agency (FEMA) activates response and recovery resources during a natural disaster, the United States (US) Department of Health and Human Services (HHS) should build similar capacity. This should include not only staff, equipment, and supplies to support a surge but also the financial resources to fund the excess costs hospitals incur treating patients during a public health emergency. Throughout the COVID-19 pandemic, hospitals relied on funding from the federal government including from the Health & Human Services (HHS) Provider Relief Fund (PRF), the Federal Emergency Management Agency (FEMA), and the Department of Treasury (DOT) to offset a portion of expenses incurred to test, treat, and vaccinate COVID-19 patients. Considerations should be made as to how these types of expenses can be offset during future PHEs.
  • Approve Funding for National Biodefense Strategy and Implementation Plan. This plan allocates $88 billion over five years for pandemic preparedness and biodefense with funding that will flow from the Department of Health and Human Services (HHS) to hospitals and healthcare systems across the Nation. This funding will allow hospitals to detect PHEs earlier; stop outbreaks of viruses and diseases before they become pandemic; strengthen the timeliness of lab testing and vaccine development; and enhance surge capacity and overall preparedness.
  • Approve $47.1 billion in Emergency Funding. The White House is asking Congress for emergency funding to cover ongoing COVID-19 response needs such as treatment, testing, and vaccination; monkeypox response support for public health messaging, vaccination, testing, and treatment; and to stockpile and prepare for future public health emergencies.
  • Increase HHS Hospital Preparedness Program Funding. Currently, hospitals rely on HHS Hospital Preparedness Program (HPP) funding to provide preparedness and mitigation-related activities. This program started in the aftermath of September 11, 2001, and provides $276 million per year to more than 6,000 hospitals across the country. Over the past 20 years, funding for this program has slowly been reduced by over 46 percent from its initial $515 million per year allocation in 2001. The present allocation of HPP funding equates to an average of $46,000 per hospital, which is often spent offsetting emergency preparedness salaries and equipment. This funding must be drastically increased so hospitals can create critical care capacity, stockpile supplies, plan, prepare, and build resiliency.

Climate change and vanishing forests are causing animals to interact more closely with humans as they search for food. Animals carry diseases that then spread to humans when they interact.  This, combined with the increased ability of global travel, leads to viral spread worldwide.  While we do not know when the next PHE – like the COVID-19 pandemic or the 1918 influenza epidemic – will be, we know new viruses are likely to present at far greater frequencies than before.

The COVID-19 pandemic showed us the vast impact that PHEs can have on society. It is imperative that we invest now in healthcare preparedness so we can build upon lessons learned and ensure our healthcare system is ready to respond to PHEs they will likely face in the not-so-distant future.

Jeff Bokser is Hagerty Consulting’s Vice President of Healthcare Programs with strategic expertise in all aspects of healthcare operations, finance, organizational resiliency, institutional preparedness, and recovery. Jeff has over 20 years of experience as a senior leader at NewYork-Presbyterian and Yale New Haven Health and served as Incident Commander, guiding 40,000+ employees through numerous internal and external emergency response and recovery operations.