HAP: Hospitals strong economic driver despite COVID costs

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Despite the enormous cost of the COVID-19 pandemic and historic workforce shortages, Pennsylvania hospitals and health care systems continue to play a significant role in the state’s economy.  

The Hospital and Healthsystem Association of Pennsylvania (HAP), in an analysis of fiscal year 2022, found hospitals and health care systems supported 1 in 10 jobs statewide and one fifth of the state’s gross domestic product. 

The report, released today, also shows Pennsylvania hospitals invested $9 billion in strengthening the health of their communities. 

Nicole Stallings, HAP president and CEO, said the workforce shortage, which has been years in the making, is taking a toll on hospital operations and will take a long-term commitment from all parties to solve. 

And the health of the state’s hospitals must be protected to ensure the health of the overall economy of Pennsylvania. 

“To preserve access to high quality care, good-paying jobs, and economic opportunity, we must make a long-term commitment to support and grow patient care teams and ensure hospitals can sustainably serve their communities,” Stallings said. 

Workforce 

“The workforce is the heart, not just of physical health, but economic health because these jobs create a ripple effect,” Stallings said.  

 The report shows that Pennsylvania hospitals and health systems contributed $182 billion to the state’s economy through $83 billion in direct impact, or the dollars hospitals pay out for employee salaries, wages, and benefits and for the many goods and services needed to provide health care services and support hospital and health system operations. 

In addition, the contribution had a $99 billion ripple impact, or the additional economic activity that results from the circulation of hospital dollars in local communities and across the state. 

The hospital community’s total impact on Pennsylvania’s 2022 economy represents 20% of the state’s gross domestic product. 

In fact, the report showed that hospitals supported more than 590,000 jobs throughout the commonwealth and generated $37.4 billion in wages, salaries, and benefits. 

 HAP’s analysis shows that the industry’s economic activity has increased by 76% during the last 10 years. 

Stallings said the report’s findings are intended to be used for informed policy discussions around strengthening hospitals’ long-term sustainability, bolstering the workforce, expanding behavioral health care access and improving licensing and credentialing of health care professionals. 

“Hospitals are growing their own pipeline of workers,” Stallings said. “We can help bring that to scale.” 

Growing the pipeline 

The report shows hospitals invested $1.2 billion educating the next generation of health professionals.   

Stallings said scholarships and loan forgiveness programs can entice young people to look at health care professions, which requires partnerships with the state, businesses and educational institutions. 

And to support the growing number of students entering the health care field, changes need to be made to draw more faculty, Stallings said.  

Not only do faculty nurses generally make less than their counterparts at the bedside and in physicians’ offices, Stallings said they need advanced degrees to teach.  

“This needs to be a discussion at the state level and we would champion that,” she said. 

One move the Shapiro Administration made that will help fill some vacant nurse positions, Stalling said, is the Nurse Licensure Compact. 

The Department of State on Sept. 5 began permitting RNs and LPNs who hold a multistate license from compact member states/territories to practice in Pennsylvania. 

“The Shapiro Administration and state agencies are aware of the issues facing health care,” she said. “They are looking at streamlining licensures and making sure bureaucracy isn’t in the way.” 

Stallings said HAP is working with multiple partners to grow the health care workforce through high school and community college programs, bringing people back into the profession and increasing the use of telehealth.  

“Not all hospital positions require a four-year degree,” she said. 

Hospitals also started using team care models during the pandemic and Stallings said because of the models’ success, they are being developed more and more. 

In addition to nurses, Stallings said the health care systems need technicians and physicians. Among the most critical are primary care physicians due to the aging population. 

“We also need more staffing in our nursing facilities,” she said. “The pandemic showed us the links to all health care facilities.” 

Stallings explained that when nursing and rehabilitation facilities can’t take patients, they end up staying in the hospital longer, which costs hospitals more. 

“When a patient has to stay in the hospital when there is not a medical reason, insurance doesn’t pay,” she said. 

Charity  

The report showed hospitals provided nearly $398 million in charity care and invested close to $430 million in programs to benefit their communities.  

In addition, the report shows that hospitals absorbed more than $5 billion from Medicare/Medicaid reimbursements that don’t cover the cost of care. 

“Government reimbursement is important to support good care,” Stallings said. “Our job as lead advocate is to lock arms with our partners in provider settings and the government.” 

While Stallings thinks the legislature appreciates the issues, “there are competing issues” for revenue. 

Rural hospitals 

Rural hospitals are often the largest employer both directly and indirectly in the county they are in, but they too, are facing challenges. 

“It’s important that we take a regional view and make sure investments can be made,” Stallings said. “Access to care in rural areas should be a concern as many are maternity health and behavioral health deserts.” 

COVID brought many rural hospitals to the brink of closure due to rising costs of goods and services and the increased patient loads, she said.  

“We are working with them to put options in front of legislators,” Stallings said, adding underserved urban areas are struggling too since they treat a high volume of Medicare patients. 

“We need to create partnerships with community organizations and get creative with government partnerships to develop new models of care,” she said. “Regional plans can bolster ways to keep people healthy and allow hospitals to provide acute care.”