By Tim Stephens, CEO, MESH Coalition

Healthcare is the largest single sector of the U. S. economy, nearing $3 trillion and employing more than 15% of the population. Hospitals are shining beacons, open all hours and attracting all parts of the community to their doors in emergencies. The continuity of this sector is essential to the functioning of all American infrastructure sectors.

Initial federal biodefense funding sent directly to the states to strengthen public health and hospitals was a result of the combined efforts of Senators Sam Nunn and Richard Lugar; in 1998 $25 million was appropriated for labs and a public health early warning system (fax machines and telephones in those days).

Significant funding increases came soon thereafter in response to increasing concerns and events. This pattern of responding to perceived threats and events, rather than building capacity, would happen again and again. At no time did the federal funding ever approach the scale of the industry or nature of the threat.

In the aftermath of the 9/11 and anthrax attacks in 2001, the U.S. Congress appropriated $646 million annually for hospital preparedness. At that time, the American Hospital Association assessed it would take $16 billion to just implement necessary physical security measures in the nation’s hospitals. The immense size of the healthcare sector (as we have seen with payment reform efforts) simply defies federal appropriation in response to events or outbreaks.

In the past three years, President Obama’s request for the Hospital Preparedness Program (HPP) funding has been reduced by 40% to $250 million. The request amounts to less than one ice hockey arena per state, the production costs of a Hobbit movie, or just one hour of spending by Americans on healthcare. Trauma 1 centers in Indianapolis receive $17,000 from HPP while last year one of them issued more than $700 million in bonds.

Federal funding of hospital preparedness is not at a scale necessary to move the system or achieve its stated goals. Last year, new infectious diseases reached the United States: MERS, D68, Chikungunya, and above all, Ebola. The events of October 2014 revealed little resilience on the part of our hospitals and even less stockpiling of protective equipment. Ebola planning in hospitals was haphazard and massively duplicative. A disease that was extremely rare and treatable only in highly specialized conditions engulfed the entire system and wasted millions of dollars and staff hours. A focused and specialized national effort was warranted; a broad, confused and all-enveloping one unfolded.

Just as Tamiflu stockpiles expired from purchases made in 2009, we had less than five days’ supply of protective suits for Ebola on hand. Those same Tamiflu stockpiles (more than $500 million in the acquisition) were generally not released to alter the trajectory of the worst flu season in the last five years. The planning for the unusual events (Ebola) has just not happened because there are no incentives to prepare when emergency management is seen as a cost rather than a business necessity. The response for usual/normal events has just not happened because coalitions have “bought stuff” but have minimal staff or systems to operate.

Healthcare has a wide and varied set of assessments, from the community benefit assessment to the hazard vulnerability assessments done for the commissioning agencies. The HPP does not integrate these tools and lacks the incentives to ensure participation from this most critical infrastructure sector. The program is silent on some of the most critical threats to healthcare, notably cybersecurity.

This past year also saw the implementation of the first fines enacted by the Centers for Medicare and Medicaid Services (CMS) for failure to meet standards for meaningful use and hospital acquired infections. These fines reached as much as 4% in some systems. The $19 billion in meaningful use incentives in the last 5 years are 3 times the amount appropriated since 9/11 for hospital preparedness.

The HPP has focused on process measures rather than outcomes. The program does not map how the business of healthcare networks function, instead using government political boundaries to distribute funds. As a result, the program has not developed recognizable measures for independently assessing preparedness.

CMS is on the cusp of issuing regulations integrating disaster preparedness into the Value-Based Purchasing program. However, the proposed use of additional bed capacity as the measure undermines community-wide efforts and supports inefficient facility specific measurement. A new community-driven assessment process is needed such that incentives are commensurate with the scale of the healthcare industry. The CMS regulations are necessary but lack built-in incentives that address the full scope of the industry. The $19 billion spent for meaningful use would be a start.

Tim Stephens is the CEO of MESH, Inc., a non-profit, public-private coalition enabling healthcare providers to respond effectively to emergency events and remain viable through recovery.