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Greater Challenges, Persistent Financial Pressures Confront Essential Hospitals

FOR IMMEDIATE RELEASE

WASHINGTON—Essential hospitals, which anchor the nation’s response to COVID-19, face high and growing uncompensated costs and care for patient groups that have suffered disproportionally during the pandemic, a new report from America’s Essential Hospitals shows.

Findings from the association’s annual member survey, reported today in Essential Data: Our Hospitals, Our Patients, show the typical essential hospital provides more than 10 times as much uncompensated care as other U.S. hospitals—an average of $80.1 million per hospital versus $7.9 million, respectively. Nationally, the association’s 300 members provide nearly 16 percent of all uncompensated care.

“These hospitals historically have faced severe financial challenges at they meet their mission of caring for low-income and uninsured patients, and COVID-19 has magnified that,” said association President and CEO Bruce Siegel, MD, MPH. “The need to direct more support to these hospitals has never been greater.”

The report, based on 2018 data, shows essential hospitals operate with an average margin of 2.5 percent, just a third of the 7.6 percent average margin of other U.S. hospitals. Without Medicaid disproportionate share hospital payments, a key source of federal safety-net funding, essential hospitals would have a negative 1.6 percent margin, the report found.

The report also shows that 54 percent of essential hospitals’ patients are racial or ethnic minorities—demographic groups that have disproportionately high rates of COVID-19 infections and deaths, recent studies have found. Also, three-quarters of essential hospitals’ patients were uninsured or covered by Medicaid or Medicare in 2018.

As they care for communities and vulnerable people, essential hospitals create millions of jobs and billions of dollars in economic activity, Essential Data shows. The average essential hospital employed more than 3,100 people in 2018—many of the caregivers now on the front lines of COVID-19—and three-quarters of essential hospitals have policies to invest in local hiring and workforce development.

Essential hospitals also are a leading source of lifesaving services and physician training. The association’s members, about 5 percent of all U.S. hospitals, operate a third of the nation’s level I trauma centers, 42 percent of burn care beds, and 26 percent of pediatric intensive care beds. They also train three times as many physicians per hospital as other U.S. hospitals—244 versus 81, respectively.

The communities essential hospitals serve face many social and economic challenges that affect health. In these communities, more than 360,000 people struggle with homelessness. nearly 10 million have limited access to healthy food, and 23.2 million live below the federal poverty line.

“Essential hospitals lead efforts to confront these and other social determinants that can cause poor physical and mental health,” Siegel said. “That work is doubly important now, as these factors also heighten health risks associated with COVID-19.”

The entire Essential Data report is available for download at essentialdata.info.

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About America’s Essential Hospitals

America’s Essential Hospitals is the leading champion for hospitals and health systems dedicated to high-quality care for all, including the most vulnerable. We support our more than 300 members with advocacy, policy development, research, and education. Communities depend on essential hospitals to provide specialized, lifesaving services; train the health care workforce; advance public health and health equity; and coordinate care. Essential hospitals innovate and adapt to lead the way to more effective and efficient care. Learn more at essentialhospitals.org.

Contact:
Carl Graziano
cgraziano@essentialhospitals.org
202.585.0102

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Dedicated staff at America's Essential Hospitals work together to produce high-quality, reliable content. Please view the about section for more details about staff.

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