In New York State, Medicaid pays only 61 cents on each dollar of care provided – and rates have not increased since 2008. Since Medicaid is the single largest payer for safety net hospitals, and because reimbursement rates have not kept pace with the increase in medical costs, inflation, and market challenges, safety net hospitals operate at a perpetual loss and cannot re-invest in their facilities or communities.

Chronic underfunding has created a two-tier system of care that disadvantages vulnerable populations. Because safety net hospitals face perpetual cycles of underinvestment and underfunding, they are unable to support needed investments in infrastructure, services and programs, quality improvement, and others.

The COVID-19 pandemic exacerbated the financial challenges faced by safety net hospitals and laid bare significant inequalities that persist across communities of color and low-income neighborhoods, which are an extension of decades of redlining and historical community disinvestment.