COVID-19 has made the inadequacy of our public health and hospital-based health care system to identify, mitigate, and resolve pandemic disaster self-evident. Gaps in hospital-based preparedness capacity are abundant, including the inadequacy of stockpiles for personal protective equipment (PPE), ventilators, medications, lack of surge inpatient and ICU capacity, and an inability to rapidly scale testing or interventions to meet pandemic demands.

The initial outcry placed blame on Federal and State governments, rightly focusing on the failure of our political institutions to empower or resource the public health and hospital community to address the crisis. Aside from these shortcomings, hospital-based preparedness failures are likely the result of a series of implicit and explicit health system changes over the past decade aimed at improving efficiency and reducing cost. While a reflexive policy response to the crisis may seek to reverse these trends to prepare for the next pandemic, this would be disadvantageous as the dual goals of public health preparedness and slowing health care cost growth are not at odds.

A restructuring of the U.S. acute and hospital-based care has been underway for decades. The health system has evolved to mitigate cost growth for increasingly complex patient populations. Across the U.S., non-hospital settings of care have expanded — this includes skilled nursing facilities, short-term rehabilitation, and growing outpatient management of disease processes, like heart failure and chronic obstructive pulmonary disease. Hospital leaders have embraced LEAN health care, the principle of eliminating waste in every process and procedure. The vestiges of fee-for-service (FFS) make hospitals reliant on elective surgical procedures over medical admissions for revenue, while ongoing payment reforms target reducing admissions for medically complex patients. Spurred by market forces and Federal efforts, the number of inpatient stays has declined in recent years. This occurred despite the fact that emergency department patients, presenting in ever-increasing numbers, are older and with more comorbidities than ever. The net effect has been to shift complex patient populations away from acute care hospitals to ambulatory settings, so that costly hospital capacity, in the form of general medical and surgical beds and staff, is more limited.

Declining inpatient stays may be a success story to slow health care cost growth, but this trend has also eroded marginal capacity within hospitals. Recognizing the need for flexible resources to meet unexpected demand, and balancing the importance of containing future health care cost growth, is essential in building our preparedness for the next global biological challenge. Our already-evolving delivery models changed rapidly with COVID-19. Regulatory burdens to telemedicine melted away, and clinics all over the nation began evaluating patients remotely. Still, the quick timeframe for COVID-19 case escalation left little time for efficient models of care to evolve. For example, the benefits of electronic health record interoperability are more acutely felt and missed where systems rely on antiquated technology or political barriers to information exchange, in the era of a global pandemic.

Below we present an outline for hospital-based preparedness that simultaneously meets the demands of pandemic response while maintaining progress in the cost-effectiveness of routine health care.

Restructure our payment models to be robust to pandemics.

Interestingly, recent efforts to transition hospital-based payments towards population-based payments or capitated payments better position hospitals for the financial risks of pandemics. In fact, Maryland hospitals functioning under the “global budgets,” population-level payment for hospital services, may face the least financial risk of COVID-19. Hospitals with substantial population-based payment can more nimbly shift variable costs from canceled surgeries to new pandemic-related expenses such as PPE. Hospitals in FFS face bankruptcy risk because their revenue model relies on steady or rising demand and productivity improvement in elective services. Flexibility of care delivery requires flexibility of the payment model. The health care system should not require an act of Congress to avoid mass hospital closures with each ebb and flow of the pandemic.

Build an infrastructure to apply equipment, medications, and human resources where they are needed.

The marginal cost of maintaining a central, rapidly deployable stockpile of newer low-cost innovations such as limited-use ventilators will reduce inventory risk to hospitals. Preparedness can be as simple as an inventory of equipment and a voluntary registry of human resources, including physicians, nurses, and respiratory therapists. Allowing health care workers movement across health systems and state lines, especially on a voluntary basis, would provide a just mechanism to distribute expertise to relieve overwhelmed systems. Existing platforms, like TaskRabbit, demonstrate how an appropriately designed platform can quickly distribute specialized human resources. Just as regulatory barriers to telemedicine can respond to a crisis, so too can regulatory barriers to human resources crossing state lines or traditional scopes of practice.

Leverage flexible payment models and available resources to innovate care delivery and mitigate the impact on the quality of routine patient care.

Novel access to hospital care capacity has emerged since COVID-19. First, the piecemeal transition towards telemedicine has lurched forward with many platforms providing virtual access to hospital-based providers at home or skilled nursing settings. Second, other countries have found innovative ways to manage a shortage of beds. China built hospitals in days. Germany is sending medical teams to patients’ homes to monitor their status and likelihood of decline. We can employ similar flexibility to provide high-quality care.

The Office of the Assistant Secretary of Preparedness and Response within the Department of Health and Human Services, in concert with other Federal agencies, including the CDC, is tasked with protecting Americans from 21st-century health threats. America’s most essential, but arguably least flexible and often costliest resource is our hospitals — COVID-19 demonstrates the need for a forward-looking approach that leverages recent gains in efficiency. A national inventory and exchange for human resources, hospital supplies including PPE, ventilators, and other equipment could provide the daily insights we need to rationalize the distribution of limited resources. Innovative delivery and payment models would allow hospitals flexibility without dramatically interrupting their pre-pandemic operations. With appropriate leadership and attention to the right avenues of health care innovation, our future preparedness need not erode hard-earned gains in health care value.

Alexander T. Janke is an emergency medicine resident. Arjun K. Venkatesh is an emergency medicine physician.

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