Essential hospitals, which comprise more than 300 of the largest safety net providers and about 5 percent of acute-care hospitals in the U.S., provided over 25 percent of all charity care in 2021, according to an Oct. 12 report from America's Essential Hospitals.
With an average operating margin of −8.6 percent — compared with −1.4 percent for all other hospitals based on Medicare cost report data — charity care and other uncompensated care left essential hospitals in the red, according to the report.
"These data show how the added pressure of the pandemic deepened long-standing financial challenges for our hospitals, including public payer shortfalls and the high uncompensated costs of their safety net mission," Beth Feldpush, DrPH, senior vice president of policy and advocacy for America's Essential Hospitals, said. "Those challenges remain today and underscore the urgency of stopping cuts to key federal safety net support."
Hospitals are also staring down the barrel of an $8 billion cut to Medicaid disproportionate share funding in mid-November. The funding cuts, part of the Affordable Care Act, will curb Medicaid DSH funding by $8 billion in fiscal years 2024 through 2027 — a $32 billion reduction total.
This amount, two-thirds of all federal DSH dollars, would devastate essential hospitals, according to Ms. Feldpush.
"They simply cannot sustain a cut of that magnitude," she said, "Access to care and lifesaving services will suffer unless Congress acts."
According to America's Essential Hospitals report, people from underrepresented racial and ethnic groups comprised around 55 percent of member discharges in 2021 and almost 75 percent were uninsured or covered by Medicaid or Medicare.
The socioeconomic status of essential hospitals' communities is also detailed in the report, with 5.4 million people having limited access to healthful food, 237,000 experiencing homelessness, 10 million uninsured and 14.6 million living below the poverty line in 2021.
Click here to access the report.