America needs strong hospitals to foster healthy and thriving communities

May 8, 2023

Hospitals and health systems are cornerstones of communities across our nation. The more than 6 million people who work there provide care, compassion and comfort for the sick and injured 24/7/365. Hospitals and health systems also are beacons of hope as the medical innovation, research and advancements that occur each and every day advance the health and wellness of patients and communities.

While the commitment to the mission of caring never wavers, the reality is right now hospitals and health systems are facing many significant challenges. These include historic workforce shortages, soaring costs of providing care, cracks in the supply chain, severe underpayment by Medicare and Medicaid, and overwhelming regulatory and administrative burdens, just to name a few.

These challenges are jeopardizing access to care and services for patients and communities.

Not enough caregivers

Stress, trauma and burnout among caregivers have intensified during the pandemic. More than 100,000 nurses left the profession in 2021, and the nation faces a projected shortage of up to 124,000 physicians by 2034. While hospitals and health systems have made many efforts to support, retain and recruit caregivers, the bottom line is we don’t have enough clinicians to care for patients today and not enough are in the pipeline to care for an aging population, more complex diseases and behavioral health conditions.

Significant underpayment by government programs

Medicare and Medicaid pay hospitals less than the costs of caring for patients. The financial loss from combined underpayments from Medicare and Medicaid to hospitals was a staggering $100 billion in 2020. In addition, that year hospitals provided $42.67 billion in uncompensated care, meaning care for which no payment was received from the patient or insurer. Since 2000, hospitals and health systems have provided nearly $745 billion in uncompensated care.

Soaring costs of providing care

Hospital expenses have increased by 17.5% between 2019 and 2022. During that same period, Medicare payments to hospitals have increased by only 7.7%. More specifically, labor expenses, which account for about half of hospitals’ total expenses, increased 20.8% during that period.

You don’t have to be a mathematician to understand that these numbers don’t add up. But what do these challenges mean for patients? They could mean longer wait times to receive care, appointments being canceled, and in some cases critical programs and services no longer being available in their local community.

So, what can be done? We must stabilize hospitals’ finances to ensure access to patient care. We must strengthen our workforce. And we must secure a future where hospitals and health systems can continue serving their communities.

We need Congress and the Administration to help. The federal government should:

  • Enact policies that support today’s workforce and ensure a future pipeline of professionals to meet the nation’s increasing demands for care.
  • Reject any proposals that would further cut Medicare or Medicaid payments to hospitals and health systems as they would reduce access to care and services for patients.
  • Adopt policies that adjust payments to hospitals during times of record-high inflation; reimburse hospitals for care provided to patients when they cannot be discharged due to workforce shortages; and provide additional resources to certain urban and rural hospitals that disproportionately serve underrepresented communities.

Patients and communities rely on the wide range of critical health care services that only hospitals and health systems can provide. We must keep our hospitals and health systems strong as we work to advance health in America.

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