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Boom-and-bust federal funding after 9/11 undercut hospitals’ preparedness for pandemics

Days after 9/11, Congress awarded Washington Hospital Center millions of dollars to design a new emergency department that would treat mass casualties from a terrorist attack or infectious disease and serve as a model for hospitals across the country.

Architects crafted plans for an eight-story, spacecraft-shaped, blast-proof emergency department they called “ER One.” Experts drew up a 1,000-page report on best practices for emergency operations, and the project secured an initial investment of about $30 million in federal and district funding.

But then Congress lost interest.

By 2010, the hospital’s champions had left the Senate and fear of another terrorist attack had faded. Congress never appropriated the $120 million requested to complete ER One, and the project was reduced to 10 new emergency rooms and a 2,500-square-foot warehouse stocked with supplies for a mass-casualty event.

The boom-and-bust cycle of federal spending has characterized the U.S. government’s response to national health emergencies over the past two decades.

Of the more than $118 billion the federal government invested from 2001 through 2017 in protecting the nation from health threats, less than $6 billion — including funds designated for ER One — went to assisting the nation’s network of more than 6,000 hospitals, records show. Federal funding for hospital preparedness peaked at $515 million in 2004 and has plummeted since then, to $276 million this year.

Annual funding for the HHS grant program peaked in 2004. Since then, Congress has cut its funding, with the exception of short spikes after national emergencies.

“The urgency dissipated and unfortunately, this is always how Congress works,” Del. Eleanor Holmes Norton (D-D.C.) said. “I can only hope we now focus on how this pandemic changes the way we look at preparing for the unthinkable.”

The coronavirus pandemic, which has claimed the lives of more than 64,000 people and sickened at least 9,000 health-care workers in the United States, has again brought into sharp relief the vulnerabilities at hospitals across the nation. While many health-care officials say they are better prepared for major emergencies now than before the 2001 terrorist attacks, those efforts have been undermined by steady funding cuts, according to records and interviews with 50 health officials.

Most hospitals — nonprofit, public and for-profit — operate on thin financial margins and have little to no budget for contingency preparations. A 2018 report by the Department of Health and Human Services’ Office of the Inspector General found that nearly all of the roughly 400 hospital administrators surveyed said they had too many obligations to prepare for emerging infectious diseases in the absence of a current threat.

“Why is it that we don’t expect firefighters to fight fires with a garden hose or police officers to enter dangerous situations without their guns?” asked Nina Pham, an intensive care unit nurse who contracted Ebola in 2014 after caring for an infected patient in Dallas and sued the hospital for failing to provide proper training or gear. “Yet, now, I see the [Centers for Disease Control and Prevention] is recommending that in the absence of adequate safety equipment, nurses and doctors use bandannas and reuse their masks.”

Even after Hurricane Katrina in 2005, when dozens of people died in sweltering hospitals with no electricity or water, federal grants to prepare hospitals declined. During three major infectious-disease outbreaks — the avian flu in 2006, the swine flu in 2009 and Ebola in 2014 — Congress passed bills that designated a modest $425 million to fix the most glaring preparedness problems in the health-care system.

Sen. Lamar Alexander (R-Tenn.), chairman since 2015 of the Health, Education, Labor and Pensions Committee that authorizes the grants, in February wrote a column on the Fox News website defending how Congress had prepared the country for the pandemic.

“No matter the outbreak or threat, Congress and the federal government have been vigilant in identifying gaps in its readiness efforts and improving its response capabilities,” Alexander wrote in the piece, co-authored by Sen. Richard Burr (R-N.C.).

Tommy G. Thompson, a Republican who was head of HHS on 9/11, said the overall lack of federal funding has left hospitals ill-prepared for national health emergencies.

“In America, we deal with the problem when it comes up, bingo!” he said. “We’re very shortsighted.”

The consequences of this approach are playing out today in New Jersey, where hospitals are overwhelmed with coronavirus patients and the state has had the second-highest number of deaths from covid-19, the disease caused by the virus, in the nation. From 2010 to 2018, federal funding to help New Jersey hospitals prepare for health emergencies fell from $11 million to $5.5 million, leading to smaller stockpiles of emergency supplies and less training to prepare for a surge of patients.

“We’re seeing very vividly, in real time, the harsh impact when we don’t prioritize emergency preparedness and response funding for health care,” said Cathy Bennett, president of the New Jersey Hospital Association.

‘Grossly inadequate’ from the start

After al-Qaeda’s attack in 2001, President George W. Bush and his administration were convinced that terrorists would strike again with biological and chemical agents or a small radiological device.

That fear drove Congress to appropriate $2.9 billion in funding in 2002 to HHS for bioterrorism preparedness, much of it for the research and development of vaccines and antidotes against weapons of mass destruction. Officials in some states used the money to set up laboratories, stockpile antibiotics and purchase chemical sniffers to detect traces of bioagents in the air.

But hospitals — the nation’s front line defense to biological attacks — were somewhat of an afterthought. Congress gave them $135 million, to be administered by HHS through a new Hospital Preparedness Program grant. Hospitals may receive funding from other federal agencies, but for nearly two decades the grant program has been the only federal source of funds dedicated to preparing the nation’s health-care network for major emergencies.

The grants, however, were insufficient from the start.

Across the country, hospitals required more than $11 billion to be prepared for the aftermath of an attack with a weapon of mass destruction, according to a 2003 estimate by the American Hospital Association.

The money was needed for equipment, including personal protective gear, along with decontamination facilities, extra hospital beds, pharmaceutical supplies and additional training.

But the $11 billion proposal was a non-starter in Congress, according to Jerome Hauer, who served from 2002 to 2004 as the HHS acting assistant secretary of the newly created Office of Public Health Emergency Preparedness, which oversaw the grants.

“We knew right up front that the amount that was being spent on hospitals was grossly inadequate,” Hauer said.

A volunteer acting as a casualty during a "Red Alert" disaster preparedness drill is scrubbed down at Maimonides Medical Center in Brooklyn on Aug. 14, 2002. (Spencer Platt/Getty Images)

In July 2004, Susan Waltman, general counsel of the Greater New York Hospital Association, testified before the Senate Health, Education, Labor and Pensions Committee, and pressed lawmakers to set aside more money for hospitals.

Hospitals in New York City, which had grappled directly with 9/11, each spent about $5.5 million on average for emergency preparedness in 2002 and 2003, she said. The federal government had only contributed about $75,000 to each.

“Our hospitals take on these additional responsibilities for the benefit of the country at large, and they in turn deserve to be supported in their efforts,” Waltman testified.

Congress increased funding for hospital preparedness to $515 million annually. That lasted two years.

Lessons from Hurricane Katrina

In 2005, Katrina pummeled Louisiana and exposed the shortcomings of the nation’s efforts to strengthen emergency defenses after 9/11.

Katrina was one of the deadliest and costliest hurricanes in U.S. history, killing more than 1,200 people and flooding large parts of New Orleans. The city’s largest hospital at the time, Charity, lost power for days and ran short of food and water.

As recovery efforts slogged away and Charity remained shuttered, Burr convened a hearing in New Orleans in July 2006 with public health officials and hospital leaders to discuss lessons learned.

“Traditionally in public health disasters we think about things like having access to biologicals and things, antidotes for biological weapons,” testified Fred Cerise, secretary of Louisiana’s Department of Health and Hospitals. “The stockpile we needed was the stockpile of medicines for blood pressure and diabetes and heart disease.”

Congress seemed to listen.

Later that summer, Burr and Sen. Edward M. Kennedy (D-Mass.), introduced the Pandemic and All-Hazards Preparedness Act. The legislation, which was approved in December 2006 with bipartisan support, created a new HHS Office of the Assistant Secretary for Preparedness Response (ASPR) that oversaw the nation’s medical and public health preparedness and response efforts.

The new office would administer grants through states to hospitals, requiring them to include planning for pandemic flu, natural disasters and regional coordination.

Congress, however, neglected to provide additional funding. Instead, HHS took $43 million from the existing hospital grant budget to set up a pilot program for hospitals to partner with state agencies and local health-care institutions on emergency preparedness. But applicants had two weeks to submit proposals for spending.

Because of the tight deadline, some projects were undeveloped, and others overambitious, according to a report by the Center for Biosecurity at the University of Pittsburgh Medical Center.

Under the program, Rhode Island Hospital secured $5 million to partner with other hospitals and organizations around the state. They used the money to design an emergency communications system but didn’t have enough funding to launch it at all hospitals. Plans for a patient tracking system fell apart and there was no money to sustain the project, according to the report.

“I don’t think the government wanted this responsibility,” said Eric Toner, a co-author of the report who now works as a senior researcher at the Johns Hopkins Center for Health Security. “They wanted hospitals to pay for their own preparedness like they did prior to 2001.”

Burr declined to comment.

Meg Femino, senior director of emergency management at Beth Israel Deaconess Medical Center in Boston, said her hospital received about $75,000 in federal preparedness funding and stretched the money over three years.

From 2006 through 2009, she stockpiled enough antibiotics to treat every employee and three of their family members in case of a terrorist attack or infectious-disease outbreak. To prepare for a natural disaster like Katrina, Beth Israel Deaconess crafted a sweeping evacuation plan, bought medical sleds to move patients and drilled for evacuating across the medical center.

“Every time we saw something new came up, we would put that on our cache of things that we would have to work on,” Femino said.

Pandemic preparation

By the mid-2000s, Bush had turned his attention to a new enemy: a worldwide pandemic.

Much of the world was already familiar with SARS, or sudden acute respiratory syndrome. The virus tore through Asia starting in 2002 and made its way the following year to Toronto, where many health-care workers were infected with the deadly respiratory illness.

The SARS virus largely spared the United States. But concern grew as the avian flu, or H5N1, resurfaced in Asia and then spread in 2005 to Europe and the Middle East.

Anthony S. Fauci, the director of the National Institute of Allergy and Infectious Diseases, warned Congress about the threat when he testified in the summer of 2005.

“Although we cannot be certain exactly when the next influenza pandemic will occur,” Fauci said, “we can be virtually certain that one will occur and that the resulting morbidity, mortality and economic disruption would present extraordinary challenges to public health authorities around the world.”

Months later, Bush pressed Congress to funnel billions of dollars toward preparing the country for a flu pandemic.

Lawmakers approved spending $6.1 billion by June 2006 — but only $75 million for the hospital preparedness program. The money primarily went toward developing flu vaccines and stockpiling antivirals.

Hospitals again came under pressure when a novel strain of influenza called H1N1, or the swine flu, surfaced in 2009 in Mexico and spread to the United States. The virus sickened about 60 million Americans and killed nearly 12,000.

In western Michigan, Jerry Evans, the medical director for a regional health-care coalition that includes more than 25 hospitals near Grand Rapids, said that as swine flu patients filled area hospitals, he worried about running out of ventilators.

To fight the pandemic, Congress gave HHS about $7.6 billion in 2009, most of it going to vaccine production and to state and local governments for a mass vaccination campaign. Only $90 million went to the hospital preparedness program.

Evans’s coalition received $1.8 million, which he said was used to purchase 70 extra ventilators and 300 portable beds that could be used in gyms or auditoriums if hospitals were overwhelmed.

‘We can’t do it on our own’

The H1N1 pandemic was severe but it didn’t hit the United States as hard as some experts had feared. And again, Congress lost interest in investing in the nation’s health-care system.

That upended hospital training, supplies and jobs for some people, including Mike Cahoon, who was hired in 2004 to coordinate emergency preparedness at 10 hospitals in northern New York.

Cahoon, based at the 300-bed Champlain Valley Physicians Hospital in Plattsburgh, oversaw a regional resource center for rural hospitals and conducted training to improve surge capacity after Katrina. With an annual budget of $500,000 in the early years, Cahoon built stockpiles of medicine, respirator masks and decontamination equipment for area hospitals. He secured four extra ventilators from the state in 2008 following the avian flu outbreak.

But in 2012, Congress slashed the hospital preparedness program and funding shifted to health-care coalitions that included public-health officials, emergency-management services, long-term care facilities and others. This approach attempted to stretch dwindling dollars and improve regional coordination across the health-care system.

In 2014, New York cut off money to four of its eight regional resource centers, including Champlain Valley Physicians Hospital. Across the country, federal grants awarded through the hospital preparedness program plunged 40 percent, from $420 million to $255 million between 2010 and 2014, under President Barack Obama.

When Cahoon couldn’t afford the annual ventilator maintenance — about $2,500 for each unit — he had them wrapped in plastic and placed in storage along with expiring respirator masks and other equipment.

“Does it hurt us out in the field now or with boots on the ground? Yes it does,” said Cahoon, who had to take on various jobs at the hospital after federal funding dried up. “We can't do it on our own. We need federal help.”

Nicole Lurie, who served as assistant secretary for preparedness and response at HHS from 2009 through January 2017, said the agency always had to fight for more money for the hospital grant program.

“There was the sense in Congress that hospitals had bought their stuff, and so more money was not needed,” Lurie said. “They didn’t seem to realize that the budget needs are also about people and training.”

Former congressman Mike Rogers (R-Mich.), who sponsored federal funding to prepare for national emergencies, said he found it hard to drum up interest in hospitals from other lawmakers absent a crisis.

“No one wants to pay for the new firetruck until the damn alarm goes off. Right? Right, then you go, ‘Oh, my God, we should have a firetruck that’s up to date,’ ” Rogers said. “No one wants to pay for it. And so the more of these things drifted away from the public eye, the easier it was to say, ‘Well, I’d rather spend that money over here somewhere.’

“And that’s exactly what happened.”

The lack of attention has challenged the hospital grant program nationwide.

In the District, there appeared to be little to no monitoring of emergency equipment or training with it for long stretches of time, according to Don Donahue, who was hired to provide support for the city’s warehouse on V Street in Northeast Washington. One of his first tasks was to take inventory of the supplies that were purchased with a mix of hospital preparedness grants and other local and federal funds.

Stacks of boxes containing face masks sit in a District warehouse on V Street NE in August 2010. (Don Donahue)

In 2010, Donahue found a $3 million urban search-and-rescue system resting on its original five-year-old shipping pallets. In a storage area on the former D.C. General Hospital campus, he located another $1 million of neglected response equipment, including a deployable shelter, generator and first-aid station. Donahue later discovered a decontamination tent destroyed by dry rot. Five scooters and 13 generators were missing, and Donahue’s team never figured out where they went.

Donahue, a retired deputy surgeon and medical adviser to the chief of Army Reserve, documented his findings, taking photographs and reporting them to city councilors by email.

“These resources have been totally ignored for years,” Donahue emailed in March 2014. “Millions of dollars of equipment is degrading in place.”

When Donahue’s contract expired in 2015, more than 4 million masks, including surgical and N95 masks, that had expired or were about to expire were stacked on top of one another in the original cardboard boxes, according to inventory records.

The emergency equipment in the V Street NE warehouse was relocated in 2019 and there were “significant improvements,” according to a D.C. Department of Health spokeswoman. She acknowledged that some personal protective equipment has been stored past their expiration date, and is distributed with approval by the federal government.

The Ebola crisis

Dominic Kollie, an Ebola survivor, suits up to go inside an Ebola ward as other staff members move in ahead in Monrovia, Liberia, on Nov. 34, 2014. Since he could not be reinfected, Kollie was helping to counsel children and patients who had contracted the disease he survived. (Michel du Cille/The Washington Post)

By the time Ebola surfaced in the United States in 2014, the nation had a decade of lessons learned from other health catastrophes. But the highly contagious, fatal disease quickly showed how vulnerable hospitals remained.

In July 2014, the CDC issued a travel warning advising people to avoid the heart of the outbreak in West Africa. The next month, the CDC boldly stated that it “is confident that U.S. hospitals are capable of safely managing a patient with Ebola when carefully following CDC’s infection control recommendations.”

Weeks later, 41-year-old Thomas Eric Duncan showed up at Texas Health Presbyterian Hospital Dallas, after having recently traveled to Liberia, with abdominal pain and a fever that spiked to 103 degrees. No one suspected he might be infected with Ebola.

Instead, staff discharged him with a diagnosis of sinusitis. He came back several days later and was admitted with a severe fever, diarrhea and vomiting.

Pham, the intensive-care nurse who later filed a lawsuit against the hospital, alleged administrators never trained her or her colleagues about Ebola and failed to provide appropriate personal protective equipment or guidance on how to use the gear.

By the time Duncan died on Oct. 8, 2014, dozens of hospital employees had cared for him and two staff members — Pham and another nurse — contracted the disease. Within days, Pham went from being a healthy 26-year-old to having end-of-life discussions with doctors and receiving her last rites. She eventually recovered and the suit against Texas Health Resources, the company that owned the hospital, was settled with undisclosed terms.

The hospital did not respond to questions from The Washington Post, including whether it had received funding through the hospital preparedness program.

An independent report commissioned by the hospital in 2015 found the Dallas facility was “not prepared to diagnose and manage a patient who came to their facility without a preexisting diagnosis of Ebola” and recommended increasing preparedness drills and training for Ebola and other emerging infectious diseases.

Two months after Duncan died, Congress appropriated about $5.4 billion to respond to the Ebola outbreak, most of which was directed overseas to help contain the crisis.

“Ebola was a big wake-up call to say we need to really invest,” said Saskia Popescu, a senior infection prevention epidemiologist, who has published studies on the response to Ebola and covid-19.

Funding to protect against public health threats

Federal spending to ready hospitals for health emergencies is a fraction of what has been spent on overall preparedness for bioterrorism, pandemics and other health hazards.

But of the billions appropriated, only about $260 million was designated for hospital preparedness grants. Popescu said most of that went to a small number of hospitals that could assess and treat Ebola patients.

The money to fight Ebola that reached front-line hospitals didn’t go very far. Goodall-Witcher Healthcare, located southwest of Dallas, received eight surgical masks, 16 bioprotective suits, 32 chemo gowns and other small items. Total value: $2,600.

Pham, speaking publicly for the first time in five years, said she is “frustrated and brokenhearted watching as nurses, doctors and other front-line health care workers endure the lack of basic lifesaving equipment,” during the coronavirus pandemic.

She is now a clinical consultant for a Dallas insurance firm and is also working with nurses and medical directors to monitor the outbreak and respond to questions.

“It takes me back to my own fear and anxiety when I had to care for just one Ebola patient,” Pham said.

 

Eroded funds

In recent years, HHS funds have eroded so much that some hospital officials said they have stopped applying for the money. Others have had to pool resources to make the grants worth the effort.

In 2018, UCSF Health, in San Francisco, received $5,500 from HHS and used it to train workers on how to deal with a surge of patients after an active shooting, said Marjorie Smallwood, UCSF Health’s director of emergency management.

“To be honest, it was quite laughable,” Smallwood said of the funding amount.

Last year, the county and its 11 hospitals decided to combine their individual grants.

In 2018, the American Hospital Association pleaded with lawmakers to restore funding to the HHS program to the post-9/11 era levels of $515 million. Instead, Congress bumped the appropriation from $255 million to $265 million. Alexander, chairman of the Senate committee that authorizes the grants, would not comment on why Congress did not increase the funding to $515 million but said through a spokeswoman that funding had increased during his tenure.

In February, as the coronavirus spread worldwide, the Trump administration proposed slicing another $18 million from the hospital preparedness program. Weeks later, Congress approved another $100 million for the program.

In the meantime, hospital officials across the country scrambled to patch together resources.

In northern New York, Champlain Valley Physicians Hospital pulled the aging ventilators from storage and sent them out for maintenance. The hospital also distributed to staff a stash of the N95 and surgical masks, some beyond their expiration date.

In western Michigan, Evans, the regional medical director, passed out the ventilators and recovery cots purchased after the H1N1 crisis, hoping that they will suffice.

“Disaster preparedness is one of those things where people don’t care, or they lose interest until it happens,” Evans said. “Then they all want to know, 'Why weren’t we prepared?’ ”

The remnants of ER One

In the District, the team that designed ER One had started working on the project before 2001, but the 9/11 attacks gave them a sales pitch they knew Congress would buy: a once-unfathomable national security threat.

Washington Hospital Center and its allies on Capitol Hill championed ER One as a national laboratory for emergency response that would serve as a prototype for other communities.

Hospital officials were disappointed, but not surprised, when Congress decided not to approve the $120 million needed to build ER One.

“Like anything else, what gets funded is often times what is the hottest thing at the time,” said Craig DeAtley, MedStar Washington Hospital Center’s director of emergency management, who advocated for ER One funding before Congress. “It wasn’t important enough to finish.”

The downsized vision, called “Bridge to ER One,” includes an area with the 10 emergency rooms built with antimicrobial wall material and self-contained air systems. The hospital also bought two dozen ventilators and constructed the 2,500-square-foot “ready room” with cots, oxygen supplies, self-help carts and other equipment. Hospital staff described it as essentially a storage room for emergency equipment and a place to conduct training.

Since the pandemic began, the hospital has used the 10 rooms to hold and test patients suspected to have covid-19.

Michael Pietrzak, the lead design consultant for ER One, said when the coronavirus struck, he thought immediately of the yellowed copy of his 1,000-page report in storage and what he says was a lost opportunity.

“It was very emotional,” Pietrzak said. “All I can do is sit here. If I wave the flag from here, people will just say, ‘Who the hell is he?’ ”

Aaron C. Davis, Andrew Ba Tran and Lena H. Sun contributed to this report. Graphics data from ASPR, AHA, NACCHO and Johns Hopkins Center for Health Security. Edited by David S. Fallis. Graphics by Danielle Rindler. Copy editing by Wayne Lockwood. Design by Courtney Kan.

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