The end of the pandemic emergency has happened already in the minds of a great part of the public. This is so from a practical point of view, at least for now, despite persistent appearances of new variants and high case numbers in many areas.
However, the public health emergency (PHE), as legally defined, continues at the federal level, even if no longer in practice on the ground in many areas. And while we all welcome the end of the pandemic and the attendant emergency from a practical point of view, there are reasons to be concerned about the end of the legally defined ‘emergency’ and how it is handled by Congress and the Biden administration.
By way of background, the president and the secretary of Health and Human Services (HHS) declare and renew the public health emergency declaration that allows the use of certain special powers, every 90 days. These powers have been used throughout the COVID emergency from the beginning, when a public health emergency was declared in January 2020, less than a month after the virus was known to exist in the United States. Congress then passed laws that added flexibility and capacities to deal with the emergency and these have been widely used for the past two years.
Early in 2020, many state and local governments forced lockdowns that largely barred non-emergency care from being offered by hospitals and other providers. This in turn meant that much of the money supporting providers immediately dried up, because most care in the U.S. is non-emergency care. And that then caused an immediate spiral downward by the healthcare system broadly, along with much furloughing and firing of crucial personnel, with the paradoxical result that our healthcare system was beginning to wither right in the middle of a healthcare crisis.
One major, bipartisan step forward to combat the crisis by Congress and the Trump administration was the creation in late March 2020 of a $175 billion Provider Relief Fund (PRF). The fund was supported by both the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act to cover providers’ healthcare-related outstanding expenses and lost revenues due to the COVID crisis. The PRF started almost immediately getting money to many medical providers to save them from going under. And added to that quick shot in the arm were day-to-day changes in regular reimbursement and ways of doing business that helped providers cope with the challenging circumstances.
During the emergency, the most fragile parts of our system, such as rural areas, were the most problematic sectors to address. Rural systems, for example, serve a population that is by and large, older, sicker and poorer. Rural providers are also dependent on Medicaid for financing in many areas. These providers are a part of our healthcare safety net that serves one-sixth of the U.S. population and are perpetually under strain, challenged both by the inherent problems of serving patients in remote areas across large distances, as well as difficult financing, technological, and staffing issues.
The direct payments from the Provider Relief Fund, as well as its flexibilities, enabled rural providers to stay open and continue saving lives throughout the crisis. What’s more, the CARES Act and the Provider Relief Fund increased payments to rural hospitals and medical providers, specifically to compensate for the added costs of providing services in rural and tribal communities. These relief efforts also provided massive resources to the Departments of Agriculture and HHS to expand digital health and telemedicine services to rural and underserved populations.
In fact, according to the Polsinelli/TbRK Index, the level of distressed hospitals hit an all-time low in early 2021. But we now see immense losses being reported by large hospital systems, and we have to expect those same financial challenges to arise and multiply as we continue to exit the extraordinary times of the pandemic.
The question that is now immediately on the horizon is: What to do when the ‘emergency,’ legally speaking, is over? Is the U.S. healthcare system prepared for the end of the PHE?
Flexibilities that enabled, for example, widespread use of telehealth, increased reimbursement, lowered regulatory oversight and expanded enrollment in Medicaid may all cease when the PHE is declared over. All of these powers and changes are vastly different and need different approaches. Congress and the administration may not realize the immense challenge posed by the withdrawal of these powers from the healthcare system after two years (and counting) of depending on them.
There is a need to thoughtfully engage in how to wind down these powers and resources, or a challenge could easily turn into a crisis. It is time for the Biden administration to signal when the official emergency is expected to end and how, and what its plans are for dealing with the inevitable problems of transitioning providers back to normal operating procedures. This is regarding both the regulatory and reimbursement issues. For example, both states and providers have noted mixed messages on Medicaid finance and the level of increased oversight to be exercised on providers.
Serious issues like these must be clarified. This is the minimum patients and providers must have to avert a system failure. With multiple crises being managed right now by the Biden administration, there is a possibility of distraction from this real need for transition planning, and a consequent need for the public and stakeholders to focus policymakers and leadership in the administration on this immediate issue, so avoidable disasters are indeed avoided.
If Congress and the administration do not plan and work together, the end of the old emergency will only mark the beginning of a new emergency.
Eric D. Hargan was most recently deputy secretary of the Department of Health and Human Services after having served as acting secretary. He also served at HHS under George W. Bush. Hargan served on the Board of Operation Warp Speed and oversaw the set up and launch of the Provider Relief Fund and other parts of the U.S. pandemic response. Hargan is the founder of The Hargan Group and sits on the boards of University Hospitals in Cleveland; Alio Medical; Tomorrow Health; and HealthTrackRx. Follow him on Twitter: @EricDHargan.