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Report Documents Grim Current Status and Future of US Hospitals


Survey responses of 320 US hospitals highlight the dire consequences of the COVID-19 pandemic on facilities and point to a future of ongoing financial and staffing challenges.

In a harrowing report released by HHS’ Office of Inspector General (OIG), representatives from 320 hospitals across the country laid out challenges wrought by the ongoing COVID-19 pandemic and the crisis’ implications for health care in the years to come.

Surveys were carried out among hospital chief executive officers (CEOs), chief medical officers, or representatives from teams and departments overseeing emergency preparedness from February 22-26, 2021, prior to the passing of the American Rescue Plan. The plan provides additional support and funding to hospitals coping with the effects of the year-long pandemic. Deidentified responses represent hospitals in 45 states, the District of Columbia, and Puerto Rico.

Of the 320 hospitals included in the survey, about half were located in urban areas, and 41 were located in counties where 20% or more of the population had household incomes below the federal poverty level. A total of 113 hospitals were located in communities with higher social vulnerability than the national average.

During the week of the survey, 56 hospitals reported they were operating at over 90% intensive care unit (ICU) occupancy while 40 reported they were operating at over 90% adult inpatient occupancy. The majority, 45 hospitals, said they were reporting at 61% to 70% inpatient occupancy.

Decreased Quality of Care

Strikingly, the report details officials’ fears of worsening quality of care provided to current and future patients due largely to financial struggles and staffing shortages. Hospital administrators also emphasized the clinical challenges of treating patients who had COVID-19 with complex immediate and long-term complications, noting discharging patients to postacute settings during their recovery is impeded by attempts to limit infection spread and transmission.

For this reason, infected patients remain in hospitals longer than they medically need to, taking up more space, limiting new patient intake, and creating bottlenecks in ICUs and emergency departments (EDs).

In addition to dealing with the pressing matter of COVID-19, administrators worried that patients who delayed care due to fears of contracting SARS-CoV-2, the virus that causes COVID-19, could result in higher hospitalization rates and increased need for more complex care down the line.

At the time of the survey, one administrator attributed some ED deaths at their hospital to patients not following up on their prior care needs. “Things that are elective, if not dealt with over time, are no longer elective,” said an emergency preparedness director.

A lack of trust regarding hospitals’ safety could also contribute to patients further delaying or skipping care, with one administrator noting, “Unless we can get everyone on the same page to get routine health care, we shudder at the burden of disease that may occur.”

Fluctuating numbers of patients with COVID-19 makes planning for future occupancy near impossible, while for those dealing with the trauma of the pandemic or who did not seek out help during the crisis, the need for mental and behavioral health services will grow and some hospitals may not have the capacity to meet this demand. As noted by respondents, mental health challenges can exacerbate other health problems.

Responses highlighted the specific struggles of rural hospitals, as these locations are unable to take full advantage of solutions adopted from more wealthy or urban hospitals. For example, not all rural patients have broadband internet access needed to use telehealth effectively, while rural hospitals are largely unable to share clinicians across systems due to remote locations.

“As a rural community, we have a limited number of physicians. If one physician falls ill, we’re done,” one respondent said. Of the hospitals surveyed, 67 served rural communities and 28 of these operated less than 15 inpatient beds.

Although telehealth has been helpful in maintaining care provided throughout the pandemic, respondents underscored that the mode of delivery cannot cover all aspects of health care. They also pointed out some hospitals received lower payments for some services provided via telehealth than they would have had that service been provided in person.

Staffing Shortages and Burnout

When it comes to staffing, not only are hospitals reporting shortages—especially among nurses— but those who are working have to do so with the added trauma of witnessing COVID-19–related deaths among co-workers and patients, and at times isolating from family to protect them from infection. Administrators reported increased hours and responsibilities resulted in exhausted, mentally fatigued staff, some of whom experience possible symptoms of post-traumatic stress disorder.

Shortages result in administrators assigning more patients to staff, while this higher ratio can lead to mistakes because less attention is given to each patient. One hospital network found an increase in central-line infections, which can be life-threatening, that they attributed to a lack of sufficient staff. Fatigue among remaining staff can also lead to process failures.

Overworked staff also have to adjust to changing federal, state, and municipality data-reporting guidelines on COVID-19 cases, ICU beds occupied, deaths, and vaccination rates, while rollout of the COVID-19 vaccine has diverted staff’s time and resources from providing care to maintaining vaccine distribution sites and administering shots.

Differing state and federal guidance on who is eligible for a COVID-19 vaccine also puts hospitals in the position of vetting patients for vaccine eligibility. For those serving communities along state borders, this becomes particularly challenging. “We’re near Indiana and Michigan, and depending on what side of [the] street you’re on, it affects what rules apply,” one hospital official said.

All these factors contribute to staff deciding to retire early or seek jobs outside of the health care industry, all the while discouraging individuals from pursuing a career in the medical field. “We can’t overstate the staffing gap that exists now that’s likely to get worse over the next few years,” an administer stressed.

Of the hospitals surveyed, 38 reported they faced a critical staffing shortage the week prior to the study. “One hospital in a high-poverty and socially vulnerable community in Texas (which was operating at 100% ICU occupancy the week before our survey) reported that its annual average for nurse turnover increased from 2% prior to the pandemic to 20% in 2020.”

Financing Challenges

When addressing staff shortages, hospitals have to compete with staffing agencies that offer more competitive wages, making staff less likely to take a steady job at a single hospital. Constant turnover means new staff have to learn and understand each hospital’s unique systems and COVID-19 protocols. According to the report, “One hospital attributed a rise in its hospital-acquired infections to the hiring of agency staff not trained in that hospital’s infection control processes.”

With the combined decline in elective surgeries at the onset of the pandemic and increased costs associated with COVID-19 (including patient care, staffing, personal protective equipment [PPE], testing, and vaccinations), hospitals across the country report precarious financial situations, with some raising concerns as to whether they can afford to remain in operation.

In rural hospitals, who tend to serve more patients enrolled in Medicaid—which often reimburses at lower rates compared with private insurance—this concern is particularly acute. “Labor costs, supply costs, utility costs, insurance costs have all gone up,” one CEO of a rural hospital said. “Everything on the expense side has gone up and the revenue side has not kept pace.”

For some hospitals, Medicare fee-for-service reimbursement did not always cover costs associated with some patients with COVID-19, while additional respondents expressed concern they could be penalized under alternative payment models, with regard to calculations of future incentive payments.

“One hospital worried that caring for COVID-19 patients, who often have lengthy hospital stays and increased risk of hospital-acquired infections, could negatively affect their quality metrics, potentially costing ‘hundreds of thousands of dollars’ in missed incentive payments,” the report reads.

Compounding this issue, “COVID-19 patients with longer-term effects will also need complex specialty care. Hospitals reported seeing patients with serious post-COVID conditions, such as pulmonary issues, pneumonia, heart problems, and blood clots. One hospital described ‘a tsunami of people going forward’ who they predicted would experience long-term effects from COVID-19,’” the report stated.

Supply Hurdles

Hospitals also reported several challenges when it comes to vaccine administration. Not only could vaccine hesitancy among staff result in the virus circulating longer than necessary, but hospitals are also tasked in part with disseminating reliable vaccine information to their communities and addressing barriers to access, such as transportation or scheduling modalities.

At the time of the survey, respondents reported frustration with the unpredictable and insufficient supply of vaccines, noting resources and time are used to set up administration sites, but these efforts go to waste when no vaccines are delivered. “There is far more capacity to vaccinate than there [are] available doses,” an emergency management director said.

Nearly 1 year into the pandemic, hospitals still reported a lack of dependable supply chains for PPE, difficulty in identifying reputable vendors, and concern about having sufficient PPE supplies for waves of COVID-19 infections in the future.


When asked what strategies hospitals had implemented in response to these challenges, those surveyed replied effective practices included sharing best practices for patient care, facilitating patient transfer and discharge, encouraging the resumption of routine medical care, and rebuilding trust in hospitals.

With regard to staffing shortages, hospitals noted successful methods addressed employee burnout and maintained sufficient staffing. To address vaccination issues, some respondents replied they had leveraged resources to provide vaccinations to hard-to-reach populations and worked to encourage vaccinations and overcome vaccine hesitancy via town hall meetings, physician-led talks, and press releases.

As part of the survey, the OIG asked hospitals about potential solutions the government could implement to address these mounting problems. Those proposed include:

  • Enhancing knowledge and guidance on the prevention and treatment of COVID-19
  • Providing support to increase care to underserved communities
  • Addressing hospital staffing needs and helping to support current staff
  • Developing education campaigns regarding vaccines and other public health issues
  • Providing ongoing support on financial issues
  • Leading a coordinated emergency response

The American Rescue Plan, signed into law on March 11, 2021, fulfills some of these suggestions in part by allocating money to rural health care providers suffering from lost revenue, providing funding for PPE and administrative costs, and allocating grants to support health care providers’ mental health.

“This report by the HHS Office of Inspector General captures and confirms the many challenges that hospitals and health systems, and our heroic caregivers, on the front lines have faced over the course of this pandemic,” said Nancy Foster, vice president of quality and patient safety policy at the American Hospital Association (AHA) in a statement to The American Journal of Managed Care® (AJMC®).

“The AHA appreciates all the support the hospital field has received during the pandemic, and we look forward to continuing to work with Congress and the administration on ensuring hospitals and health systems have the support, resources, and tools they need to continue to provide essential services to their patients and communities during the pandemic and beyond.”

Responses provided in the survey were not independently verified by the OIG.

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