WAPO: The Health 202: Pandemic relief funds boosted surpluses for some large hospitals
By Alexandra Ellerbeck with Paige Winfield Cunningham
June 21, 2021
The Biden administration is giving hospitals and other providers even more time to use coronavirus relief money and apply for more.
Yet many of the larger, wealthier hospitals have been back to normal operations for months — and they posted banner profits in 2020.
Hospital visits plummeted but have since rebounded.
Hospital admissions declined precipitously in the early months of the pandemic, as providers cut down on elective procedures and many patients stayed away for fear of the virus, but by summer 2020 they were at 90 percent of levels in previous years. By the end of last year, overall health spending was up 3.4 percent compared to 2019.
An analysis from Kaufman Hall found that hospital operating margins rose by more than 100 percent between April 2020, at the start of the pandemic, and April 2021. The report noted, however, that hospitals have seen a big increase in expenses, and margins remain thin.
Ge Bai, an expert on health-care finance at Johns Hopkins, questioned whether the extension on funding this late in the game was a good use of taxpayer money.
“Right now, the hospitals have already resumed their normal operations, and most of the hospitals are capable of overcoming short-term financial difficulty,” Bai said.
Some hospitals have reaped large profits.
Between a faster-than-expected recovery in patient volumes and an influx in funding, some big hospital systems found themselves flush with cash during the pandemic.
HCA Healthcare, one of the nation’s largest hospital chains, finished 2020 with increased profits compared to the previous year. The health-care giant ended up returning $6 billion in relief from the government.
Other wealthy hospitals such as Baylor Scott & White Health, the largest nonprofit hospital system in Texas; Mayo Clinic; Pittsburgh’s UPMC; and NYU Langone Health all recorded hundreds of millions in surpluses, according to a Kaiser Health News report.
A Kaufman Hall report found that with the federal funding, the hospital operating margins were 2.7 percent. Without funding, they would have been 0.3 percent.
Yet hospitals still petitioned the federal government for an extension to apply for relief money.
Hospitals and other providers were told that they needed to use their coronavirus relief money by June 30, but under pressure from industry and lawmakers, the Biden administration announced earlier this month changes that will allow more time to most providers who received money after June 30, 2020.
Some providers say the extension was necessary given burdensome reporting requirements and delays from HHS in getting funds out the door. The administration is facing pressures from lawmakers to get money out quickly but also provide more oversight. The agency has yet to distribute about $24 billion from the original allocation.
HHS Secretary Xavier Becerra told Congress last month that the administration would work on ensuring “the money goes to those who need it most.”