The American Hospital Association or AHA has asked for $52 billion more in emergency funding from the federal government, saying hospitals and health systems were suffering losses due to the COVID-19 pandemic and needed expedited support.
In a letter to Department of Health and Human Services Secretary Alex Azar, AHA President Rick Pollack pleaded for more funding under the CARES Act Provider Relief Fund saying further distributions were necessary to help maintain financial stability for hospitals.
“While our members continue to do everything they can to address COVID-19 cases, quickly making substantial additional funds available would help them continue to put the health and safety of patients and personnel first, and in many cases, may actually ensure they are able to keep their doors open,” Pollack wrote.
How the funds should be distributed
Pollack explained that the new funds can be distributed in a phased manner.
“As such, we first urge the Department to distribute $10 billion in additional funds to ‘hotspot’ hospitals to help offset the significant costs incurred in testing, diagnosing, and treating COVID-19 cases. The Department also should include an additional disbursement of $2 billion based on a hospital’s low-income and uninsured patient population, as it did previously. Second, we urge HHS to distribute $10 billion to hospitals serving high numbers of Medicaid and uninsured patients,” he wrote in his letter.
The AHA boss said hospitals serving high numbers of Medicaid and uninsured persons cared for the country’s most vulnerable patients, “who, largely as a result of underlying health conditions, have suffered disproportionately from the pandemic. They have been hospitalized at greater rates, and required more care and resources once hospitalized.”
Pollack also urged the HHS to distribute $30 billion in additional funds to all hospitals, including rural and urban short-term acute-care, long-term care, and critical access hospitals, as well as inpatient rehabilitation and inpatient psychiatric facilities. Furthermore, the AHA boss said the HHS should then use the application process it created to distribute funds to hospitals and health systems based on their COVID-19-related costs and lost revenue.
In addition, Pollack asked the federal government to create a process by which to reimburse eligible hospitals and health systems for healthcare-related expenses or lost revenues attributable to COVID-19 through a direct application process.
The AHA estimates that hospitals and health systems will suffer financial losses of up to $202.6 billion for the four month period between March 1 and June 30. This translates to just over $50.7 billion a month.
According to the AHA the $202.6 billion includes the costs of coronavirus hospitalizations, the impact of canceled and foregone services due to COVID-19 on hospital revenue, the additional costs associated with purchasing needed personal protective equipment, and the costs of additional support some hospitals are providing to their workers.
Hospitals have already received $170 billion from the federal government in stimulus spending. Pollack said that although the federal government had provided relief, more was needed, because many hospitals were already facing financial pressures.
The AHA is made up of almost 5,000 member hospitals, health systems and other health care organizations.
The situation in some states
In mid-April, the Illinois Hospital Association estimated that, due to the cancellation of elective surgeries, hospitals in the state had lost $1.4 billion in revenue. Elective surgeries were canceled in the state on March 19. Elective surgeries resumed in mid-May.
On the other hand the Hospital and Healthsystem Association of Pennsylvania (HAP) projects that the state’s hospitals and health systems could incur a $10.2 billion financial impact from the costs of preparing for and responding to COVID-19. This includes lost income from the cancellation of scheduled services, as well as the costs of supplies and personal protective equipment, personnel, and expanded capacity to handle a surge of COVID-19 patients, it was reported.