Chronic Underfunding Has Perpetuated A Two-Tier System of Care

Failure to properly fund safety net hospitals contributes to the glaring inequities that prevent New York’s underserved communities from thriving.

Without access to capital, safety net hospitals are unable to sufficiently invest in facilities and medical equipment resulting in deteriorating infrastructure that does not meet current standards of medical care. Poor credit ratings and the lack of cash that comes as a result of underfunding makes it difficult for us to address our immediate short-term needs, such as buying COVID supplies. What’s more, underfunding has resulted in safety net hospitals lacking the capital to respond to the social determinants of health needs of both patients and staff. The very communities most in need of public health investments and community care are most harmed by these systemic inequities.

Compared to non-safety net hospital peers, safety net hospitals have:

• Low and often negative operating margins even after accounting for supplemental payments, which hampers the ability to retain staff and invest in facilities.

• Barely have enough cash on hand to sustain operations and weather public health crises.

• Facilities with aging equipment that need infrastructure improvements.

Together, safety net hospitals have more than $3 billion in outstanding infrastructure investment needs, including deferred facility upgrades (e.g., HVAC) and investments in programs (e.g., primary care).