Black communities got less in COVID-19 provider grants than needed

HHS’ distribution of more than $100 billion of COVID-19 provider relief grants gave the same amount to disproportionately Black counties with high disease burdens as to other communities with less need, researchers found.

The research letter, published Friday in JAMA, found that HHS sent $126 more per resident to providers in counties with higher proportions of Black residents. But among counties that got similar amounts of money, those with higher proportions of Black residents had higher rates of COVID-19 disease burden and existing comorbidities, and worse hospital finances.

Black Americans are more likely than white patients to be hospitalized or die from COVID-19, even when controlling for socio-economic status, recent research has found, and Black individuals are five times more likely than white individuals to be hospitalized for COVID-19.

Lawmakers tasked HHS with sending $175 billion to help healthcare providers offset coronavirus-related expenses and lost revenue. The department has yet to distribute tens of billions of dollars left in the fund.

The higher amount of grants to providers in disproportionately Black counties reflects HHS’ efforts to direct funds to some safety-net providers, though those efforts were almost exclusively targeted to hospitals, said Pragya Kakani, a health policy doctoral candidate at Harvard University and the paper’s lead author. Funds directed to coronavirus hot spots were based on inpatient COVID-19 admissions, which excluded providers other than hospitals, and separate funding was sent to safety-net hospitals.

“It’s certainly better than not having those safety-net distributions, but the point is that they didn’t go far enough,” Kakani said.

Researchers from Harvard University, the University of Chicago and the University of California at Berkeley criticized that much of the first funds distributed were based on historical revenue. The analysis accounted for projected disbursements of $120 billion announced on or before July 5.

“Revenue is an imperfect measure of need because it is also influenced by prices, overuse, payer mix, and market consolidation,” the authors wrote.

An HHS spokesperson said the department considered other formulas, but alternative methods would have taken longer.

“In choosing to act quickly, HHS adopted revenue as a measure of how to distribute funds across healthcare facilities and providers of different sizes and types,” the HHS spokesperson said.

HHS will make targeted distributions to providers that have been disproportionately affected by the coronavirus pandemic, HHS said.

A previous analysis by the Kaiser Family Foundation found that early Provider Relief Fund distributions favored hospitals with a higher share of privately insured patients.

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