Insufficient distribution of COVID-19 relief funds for hospitals treating underinsured Hispanic communities

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The Trump administration’s approach to handing out relief funds from the COVID-19 provider has been hit and miss when it comes to health equity and reaching underserved demographics, new data shows published in Health Affairs.

In a sample of 2,709 hospitals that received $ 69.5 billion through February 2021, health policy researchers at Harvard University found that hospitals serving areas with high proportions of black residents, those who have a large number of nursing home beds in their community or those reporting a high ratio of Medicaid revenues for beds have seen federal relief funding “significantly increased.”

On the flip side, the researchers observed the opposite for hospitals serving communities with a high proportion of Hispanic residents, who, like black Americans, were hospitalized at nearly three times the rate of non-Hispanic white Americans.

Facilities treating a small proportion of patients with employer-sponsored insurance were also at a disadvantage, they wrote, while those with residents living in medically underserved areas saw no increase or decrease in relief.

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Some of these distribution trends can be attributed to the Trump administration’s focus on high-impact hospital disbursements, or helping hospitals that have treated significant numbers of COVID-19 patients. The researchers noted that hospitals treating a large portion of black residents would have received significantly less relief than others without the high-impact funding, as did those with low commercial income and those in communities with many nursing home beds. nurses.

However, much of the inequity was due to decisions made regarding formulas for determining hospital relief, they continued. These formulas often relied on hospital financial records and other administrative data for admissions while prioritizing net patient income to determine capacity, decisions that, among other things, skew allocation decisions and generally favor hospitals that serve well-insured populations.

“All else being equal, hospitals serving more uninsured people will tend to have lower patient net incomes because this metric does not take into account unpaid care,” the researchers wrote. “Future approaches to extraordinary relief should incorporate measures of community needs from data external to Medicare. “

The average total relief funding per hospital was $ 25.7 million for those included in the analysis. Among about one-third of hospitals that received high impact funding, the average high impact funding received was $ 21.2 million.

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About 20% of the included hospitals received relief only through an income-based funding stream, as most received additional relief from rural, high-impact or net funding pools. of security. Still, patients’ net income explained 45.9% of the variation in relief disbursements, the researchers wrote.

“Our results underscore that funding formulas reflect consistent political judgments,” they wrote. “In future allocations, the relationship between need and support should be strengthened by reducing historical net patient incomes in favor of a broader set of community and hospital characteristics. “

Industry groups and lawmakers have called on the Biden administration to release the remaining 25% of relief funds that have so far not been distributed. They got their wish on Friday, as the US Department of Health and Human Services announced that an additional $ 25.5 billion will be made available to providers starting September 29. This includes $ 8.5 billion in US bailout resources and $ 17 billion for the Provider Relief Fund.


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