Safety Net Hospitals in the COVID-19 Crisis

Ambulance, with lights on, outside a hospital at night.

Safety net hospitals are especially vulnerable to the financial and other stresses caused by the COVID-19 pandemic.

 

 

The Issue

America’s hospitals have been on the front lines of the COVID-19 pandemic, which has caused financial havoc in the industry. Safety net hospitals disproportionately care for those with low incomes and communities of color, the very groups hardest hit by the pandemic. Those hospitals typically treat a larger share of Medicaid and uninsured patients than other hospitals and thus often operate on thinner financial margins, making them especially vulnerable to the financial and other stresses caused by the pandemic.

This brief describes how the pandemic has financially affected five safety net hospitals as of the summer of 2020, including the costs of preparing for and operating during the pandemic, the pandemic’s impact on their revenues, the federal financial relief they have received, and implications for policy and practice. The five hospitals in our study are:

  • Erie County Medical Center (ECMC) in Buffalo, New York
  • Henry Ford Hospital in Detroit
  • Parkland Hospital in Dallas
  • Truman Medical Center in Kansas City, Missouri
  • Vidant Medical Center in Greenville, North Carolina 

Key Findings

  • To survive, safety net hospitals must balance needing to maintain both readiness for more COVID-19 surges and their regular lines of business.

  • Hospitals will have to reduce future expenses to stabilize their finances, which two study hospitals said they had already done. This is a tall order for all hospitals but even more so for safety net hospitals, given that they care for disadvantaged populations and rely heavily on public funding, which may be more limited in the future.

  • It will be important to both track how safety net hospitals meet these challenges and to ensure they receive needed financial relief and other support as they serve the communities most affected by the pandemic.

Conclusion

This study provides a snapshot of the considerable investments safety net hospitals have made to prepare for and operate during the pandemic. It also depicts the dramatic financial impact the pandemic has had on these hospitals as of September 2020. The crisis has “shined a light on health disparities,” as one executive put it, underscoring the importance of maintaining the financial health of safety net hospitals serving populations hardest hit by the pandemic.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.