AHA to Congress: Hospitals Need More Resources Amid Financial Struggles

The American Hospital Association (AHA) and seven other hospital organizations have penned a letter urging Congress to provide additional resources to help hospitals address ongoing operational and financial struggles during the COVID-19 pandemic.

While the organizations expressed their gratitude for the federal support they have received thus far, they cited rising patient acuity levels and new virus variants as causes for additional support.

Patients are staying in the hospital for longer periods of time compared to earlier in the pandemic, which has increased the staff workload, the letter stated.

“The financial pressures hospitals and health systems faced at the beginning of the public health emergency continue, with, for example, ongoing delays in non-emergent procedures, in addition to increased expenses for supplies, medicine, testing, and protective equipment,” the organizations wrote.

Staffing shortages also continue to plague hospitals in the third year of the pandemic, making it harder for health systems to meet the increased demand for care. In the letter, the organizations referenced data from the Bureau of Labor Statistics, which found that hospitals are down 95,600 employees from February 2020.

Recent data from the American College of Healthcare Executives (ACHE) revealed that labor shortages were the top concern for hospitals in 2021. Hospital CEOs were particularly concerned with the shortage of registered nurses.

The AHA letter highlighted how nursing shortages have led many hospitals to hire temporary contract staff in order to keep up with care delivery. However, hospitals have incurred a cost burden from contract hiring, as there have been reports of price gouging by nurse staffing agencies.

According to the hospital organizations, nurse staffing agencies have inflated costs by two or three times more than their pre-pandemic rates. In turn, the staffing agencies retain high profit margins while hospitals are billed excessively.

The advertised pay rate for travel nurses has increased by 67 percent between January 2020 and January 2022, the letter stated. Meanwhile, staffing firms have billed hospitals 28 to 32 percent above the pay rates. These rates are unsustainable for hospitals and have contributed to increased labor costs during the pandemic, the organizations stressed.

To avoid further financial challenges, AHA and its fellow organizations urged Congress to extend the relief from Medicare payment cuts in 2022.

In December 2021, the House and Senate passed legislation that extended the moratorium on the 2 percent Medicare sequestration until April 2022. After April, the sequester amounts will be reduced to 1 percent through June 30. The organizations requested that Congress extend the moratorium as hospitals continue to face workforce and financial pressures.

The groups also asked Congress to act appropriately to ensure hospitals and health systems have adequate resources at their disposal to help offset labor costs and to continue to provide care to patients, such as supplies and equipment.

The letter received signatures from America’s Essential Hospitals, Association of American Medical Colleges, Catholic Health Association of the United States, Federation of American Hospitals, National Association for Behavioral Healthcare, Premier healthcare alliance, and Vizient, Inc.

In a separate letter to Congress, AHA recently urged lawmakers to allocate another $25 billion to the COVID-19 Provider Relief Fund and postpone repayments of Medicare accelerated and advance payments.