Five years ago, the COVID-19 pandemic brought fear, anxiety and uncertainty to hospitals across the nation. Grappling with sudden financial, medical and cultural shifts, regional health care leaders found themselves stuck at the precipice of how to save lives while saving their hospitals.
“Hoosiers’ health outcomes have improved over the past decade, and Indiana hospitals are proud to have played a key role in these efforts, demonstrating the long-term impact of strategic investments in health and well-being,” Indiana Hospital Association spokesperson Steve Cooke told the News and Tribune in an email.
But with new legislation striking $60 million from Indiana’s public health funding, and as Medicaid cuts threaten access to health care for many nationwide, key players in Indiana and Kentucky hospitals say they are once again adjusting to a landscape that will create a ripple effect stripping people of insurance, creating barriers to care and leaving health care providers straining to solve a slew of problems that began compounding long ago.
STAFFING TROUBLES LEAVE HOSPITALS SCRAMBLING
Baptist Health Floyd President Mike Schroyer said the cost of health care for both supplies and patients has increased since the pandemic. Indiana has one of the lowest hospital profit margins in the country, Schroyer noted; a 2024 analysis by health care consult ing firm Kaufman Hall showed Indiana’s 2023 cumulative operating margin at 0.9%, lower than the average national margin of 2.3%.
Despite those statistics, Indiana hospitals generated more than $63 billion in annual economic activity in 2024, the Indiana Hospital Association reported, and serve around 640,000 inpatient and 2.6 million emergency department patients.
“Every day, the hardworking people who staff our hospitals and provide care and support to millions of Hoosiers are also the people driving Indiana’s economy,” IHA President Scott Tittle stated in a Sept. 25 release.
The pandemic also caused what Schroyer called a workforce crisis. According to the Bureau of Labor Statistics, 626,000 health care and social assistance workers left their jobs in November 2021 alone, and the National Council of State Boards of Nursing reported 100,000 nurses left the workforce during the pandemic.
Schroyer said he could not give an exact number of how many staff members left Baptist Health during the initial pandemic years, but said the health care system is still working to get staffing up to pre-pandemic levels.
“We had so many physicians, nurses, respiratory therapists and others leave health care because of the pandemic, and those two things combined have kind of created the crisis that we’re in going forward trying to make ends meet,” he said.
On the Kentucky side, staffing is also an issue that continues to plague Baptist Health Louisville, President Jonathan Velez said.
“With such a significant exodus across the country, COVID taught us one thing,” he said, “and that was when it comes to these sort of national-level pandemics, your market for recruitment becomes a national market. When folks exit the market entirely, you’re competing for a more scarce resource.”
To draw in more health care workers, Baptist Health’s salaries have dramatically increased in an attempt to compete on a national level, Schroyer said. But Velez added expanding that search for workers can also mean bringing in employees that may have gone through their first training during the pandemic, leaving them with less experience than what they would have gained in pre-pandemic years.
“Now you have the added expense of actually completing their training and making sure that they’re well-rounded, competent clinicians,” he said. “So I think that is the other impact that the pandemic has created, a heavy reliance on folks that are coming out brand-new as opposed to being able to rely on as many experienced or seasoned staff that you would be able to enjoy previously.”
Another result of the pandemic, Schroyer said, is that many people have become sicker because they waited to receive care.
“Their diseases are more advanced, so they’re requiring a lot more care,” he said. “We’re seeing a lot more complex, higher-acuity cases than what we were seeing before the pandemic. On top of that, we have the largest group of the ‘baby boomers’ hitting the age requiring more health care.”
Both Baptist Health hospitals have expanded bed space since the pandemic began, with Louisville adding a 32-bed observation unit in 2021 and Floyd opening a 32-bed cardiovascular unit last June. The additions helped, but Schroyer said hospitals still struggle with capacity, particularly in the winter months; last winter, Floyd struggled to manage an overflow of more than 50 patients, a problem Velez said his hospital also faced.
In addition to looking for health care workers nationwide, Velez said Baptist Health also relied more heavily on contract labor during the pandemic. Contract laborers are temporary staff members who travel to various locations, helping fill when there’s a shortage.
“There’s obviously all sorts of challenges with that, not the least of which is the cost of those folks is significantly higher than the cost that you have for your regular staff,” he said. “It’s one of the only ways you really have, shortterm or medium-term, to try to keep all the things that you have open, but you need to have open longer-term solutions.”
One of those solutions hospitals like Baptist Health are considering, Velez said, is sourcing staff members from other countries to come in and work.
“It helps us significantly because not only do you get somebody, but you usually get folks that tend to be fairly dedicated and stay even after their initial period of time,” he said.
Baptist Health has not yet hired international staffers, but has employed international students to finish coursework and is working on a contract to hire others in the future. However, securing those workers could be a challenge after the Trump administration in September imposed a $100,000 fee on new H-1B visa petitions, Schroyer said, a move health care organizations including the American Medical Association have encouraged the government to exempt physicians from.
LEADERS BRAINSTORM HOW TO TACKLE CUTS
Earlier this year, Indiana lawmakers made significant cuts to public health funding in response to the state’s $2 billion budget shortfall, scaling back public health funding from $100 million to a mere $40 million for all 92 counties. For context, the state’s previous budget included $225 million for local health departments.
Schroyer pointed toward the One Big Beautiful Bill Act as a source of concern, with the law including an estimated $1 trillion in cuts to federal Medicaid spending over the next 10 years. This will result in lower Medicaid reimbursement rates for providers, who, in Indiana, are already some of the lowest-reimbursed.
Schroyer has been heavily active in advocating for changes to state health care legislation, most recently expressing his concern to legislators about hard price caps due to House Bill 1004, a law passed in May requiring hospitals to lower prices or lose their nonprofit status.
“I think we are watching very, very closely and being very active from an advocacy standpoint because it will affect health care as a whole,” he said. “And if things don’t change, it will affect access to care.”
For some local patients visiting Baptist Health hospitals, that access is already becoming a challenge. People without insurance or state assistance tend to use emergency rooms and urgent care centers as their primary sources of care, Schroyer said, which creates more overflow in emergency rooms and prevents hospitals from being paid for that care.
“We are really trying to get the legislators and the governor and the White House to understand that if they limit the people who qualify, it’s going to put a whole lot of people out there with nothing, and the hospitals can’t say no,” he said. “We’re going to be taking care of a lot of people, which we want to do, except there will be no reimbursement for it.” Schroyer said he urges legislators to work with hospitals, and thinks it’s important to show that hospitals are at the mercy of other entities determining costs — namely, pharmaceutical and insurance companies. On top of tariffs and supply and equipment costs, Schroyer said, addressing financial struggles means all key players need to be at the table.
“If we’re going to really change healthcare moving forward, everybody needs to be doing their part to decrease cost,” he said.
While Kentucky isn’t facing the same level of threats from state funding, Velez said, he worries about how federal changes could funnel down.
“The program that we have here that helps support the Medicaid population and Medicaid reimbursement, that program has been incredibly helpful,” he said. “’As time goes by, based on what’s happening at the federal level, if nothing changes, then that program will be severely gutted or completely wiped out, which will means a significant impact to health care.”
Schroyer and Velez met last Friday to discuss options for saving dollars, which in their infancy include not only hiring more staff but also using technology to assist with menial tasks to free humans up for patient care.
“You start to entertain conversations about how technology can potentially take over some of these things that maybe historically you’ve asked people to do that maybe they don’t need to do?” Velez said.
One place where Baptist Health has already begun using artificial intelligence, Velez said, is generating notes for providers while they have conversations with patients. Those notes can be edited after the fact by providers for accuracy, he said, but automating them in the moment saves time that could be used to see another patient in a given day.
“When you’re struggling already to find staff for these things, every little bit will help,” he said.
But Schroyer and Velez maintain that, much like AI itself, their system’s use of it is still in the beginning stages. The two health care leaders emphasized they are looking for ways to use AI to enhance quality and safety while reducing costs, but would never use it to provide actual patient care.
“I wouldn’t put it in any place where it would independently take the place of a human being in terms of really trying to reason through what may be going on with the patient or putting stuff together. In places where it can help? Sure,” Velez said. “But certainly not unsupervised, and certainly not where we’re giving it a significant amount of power of authority to make decisions that ultimately would have been humans’ to make.”
HEALTH CARE ‘AN UPHILL BATTLE’
Looking back since 2020, both health care leaders said they have seen an increased appreciation among community members for the services their hospitals provide.
“I think they know that hospitals have been through a lot over the last several years, and that we’re still trying to totally come out of it,” Schroyer said.
With that appreciation, however, also came increased violence from some people targeting hospital staff members, an outcome Schroyer said is due to the effects of long-term isolation during lockdown. The American Hospital Association in June assessed the effects of violence in public health settings, reporting the COVID-19 pandemic had direct impacts on increasing rates of workplace violence against health care workers.
That being said, Velez echoed Schroyer in stating the support is still tangible, and hospitals like theirs have learned valuable lessons in how to navigate a changed health care landscape.
Velez said hospitals have a new understanding of the importance of protecting patients and staff from communicable diseases, particularly because COVID-19 can be transmitted in a variety of ways some other illnesses cannot.
“Really making sure we have the right protocols in place so that we won’t have the suspicion that it could be there,” he said. “Applying the appropriate safeguards in terms of personal protective equipment for our staff, for our patients, for our visitors. We got really, really good at that during the pandemic, and that is one of those things that will obviously continue as we move forward to make sure we are keeping folks as safe as we possibly can.”
In 2025, Velez said, being a health care provider feels like an uphill battle always getting tougher. Despite the resilience and innovations of the field, he said, providers need to apply pressure to not just the region or state, but the country, to make sure the root causes of the issues they’re seeing are addressed.
“Heaven forbid we have another pandemic, but we’ve learned a ton from the first one about things that work well and things that don’t work well,” he said. “And I think where the community’s dependent on us is, can we learn from those things? You learn from what you can learn from and continue to move forward.”
Schroyer said he thinks there is an abundance of opportunity for teamwork.
“We have all of these people, as I mentioned earlier, at the table working together to resolve this,” he said. “It can’t just be focused on the one. It’s got to be the whole. If we can do that, we will have a bright future.”
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