As Americans we have our fair share of natural disasters from floods to hurricanes, we have seen it all. Even as FEMA’s financing has been scrutinized and reduced at times, this department always gets our backs (minus Hurricane Katrina of course). FEMA is based on a natural disaster, not a virus epidemic. How will US cities pay for Covid-19 hospital and doctor fees? Can we avoid breaking the bank in the future due to illness? It’s time for cities to create their own healthcare enterprise fund to remain economically and physically solvent.
Cities are the epicenter of American healthcare as their populations grow. While more people move back into 1000 square foot condos and even smaller apartments, health systems are strained. Covid-19 is overwhelming urban centers as rural health centers fail to provide beds and care for a massive sick population. Chicago rented 1,000 hotel rooms at a cost of $175 per night to provide isolation costing the city $1 million for 30 days. Hospitals and health centers are lacking Personal Protective Equipment by the thousands. As health center systems budgets consistently struggle on a day to day basis, stocking supplies for future stresses are ignored. Only the immediate needs for daily operations are normally funded. This is partially due to competition for funding.
As health care centers proliferated funding remained the same. Today there are tens of thousands of health care centers competing for federal grants that have not grown, they’re still only funding 18%. Medicaid payments have grown to 44% of all system payments leaving many centers scrambling to receive funding for those that haven’t or can’t pay. In 2019 there were 137 million Americans struggling with medical bills being the basis for nearly 67% of all personal bankruptcies. That’s 137 million unpaid medical bills yet people must be provided service through public hospitals and doctors. The medical bills from a virus will be exponentially larger. Who pays the bills for the health care centers to stay open even after Covid-19 can be a combination of residents and city budgeting.
Metro Unnatural Disaster Financing (MUDF) could be created through a surcharge on hospital and doctor visits. Sure, no one wants to hear of another added cost, especially not inside a hospital or doctor bill but it could work. An additional visit surcharge of $5 added to the co-pay of any visit could substantially fund a crisis. According to the CDC, there were 139 million visits to the emergency department in 2017. Nationally the simple $5 charge could raise at least $300 million a year as Medicare, Medicaid and Welfare recipients would be exempt. Yes, another tax for those working but it could defer other taxes.
Cities have traditionally co-funded public hospitals through a slew of private fundraising and taxation. As these public hospitals have continued to shrink in large cities, mayors are struggling to provide healthcare for rising populations. Private hospitals can and do reject certain insurances and patients leaving cities responsible for providing health care centers. Federal taxation increased to cover growing healthcare costs and now mimicked in cities through higher city sticker prices, business permits and a host of city-based revenue options. If cities cannot find a means to directly tax healthcare into an enterprise fund for rising costs, then taxes increase without a direct means of funding. City taxes and fees can be a slosh bucket but the MUDF surcharge would be directly deposited into a fund to specifically fund healthcare. No sloshing or cherry-picking funds for non-healthcare related needs. The post-Covid-19 health systems would not crash or fail or go broke if there was funding for these public health centers throughout the year. When the Flu comes several times in a year, the MUDF fund can be transferred to hospitals inundated with large medical bills not paid by patients. There are many times in a year that public health care systems are overwhelmed in cities such as higher violent crimes and shootings in summer as well. It’s not just the sniffles that can break the hospital’s bank.
A specific surcharge for a specific need in a specific fund. It’s the only way we as urban dwellers, now over 65% of America’s population, will have access to healthcare for all. There are many different means to directly funding healthcare without raising property taxes and urban dweller fees. This is an idea to begin discussing new ways to make all cities more solvent for their ill residents-financially and medically.