Home » Federal subsidies kept COVID-strapped hospitals financially stable in 2020, first year of pandemic

Federal subsidies kept COVID-strapped hospitals financially stable in 2020, first year of pandemic

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Subsidies from the federal authorities stored hospitals throughout the U.S. afloat in the course of the first yr of the COVID-19 pandemic, successfully defraying revenue loss even for essentially the most weak medical facilities, researchers from the Johns Hopkins Bloomberg Faculty of Public Well being report in a brand new examine.

The examine, printed Could 13, 2022 in JAMA Well being Discussion board, is among the first investigations into how billions in U.S. authorities subsidies affected the monetary viability of hospitals throughout this public well being disaster—information that might assist policymakers resolve whether or not and problem future subsidies throughout this pandemic or others that will come up.

For his or her evaluation, the researchers in contrast hospital working and revenue margins at 1,378 U.S. hospitals from the three years previous the pandemic—January 2016 to December of 2019—to the primary yr of the pandemic—January to December 2020. The researchers used CMS Hospital Value Experiences for hospitals’ general revenue margin (the quantity earned from all revenue sources) and working margin (the quantity earned particularly from affected person care).

The examine discovered that in pre-pandemic interval, hospitals general misplaced a mean of $1 for each $100 earned from affected person care actions, resulting in an working margin of adverse 1 p.c. In 2020, that quantity dropped to between $7 and $8 misplaced per each $100 earned, an working margin of adverse 7.4 p.c.

For presidency, rural, and smaller hospitals, which regularly function on the sting of monetary viability, the typical general revenue margin stayed steady or improved in the course of the first yr of the pandemic on account of COVID-19-related subsidies. From 2019 to 2020, the typical general revenue margin elevated from:

  • 3.7 p.c to 7.2 p.c for presidency hospitals
  • 1.9 p.c to 7.5 p.c for rural hospitals
  • 3.5 p.c to six.7 for small hospitals.

“Hospital operations have been actually hit arduous in the course of the pandemic. Our examine exhibits that the aid funds supplied an essential lifeline to maintain financially weak hospitals up and working,” says Ge Bai, Ph.D., CPA, a professor within the Bloomberg Faculty’s Division of Well being Coverage and Administration. She can also be a professor of accounting on the Johns Hopkins Carey Enterprise Faculty.

When COVID-19 gained traction within the U.S. in early 2020, hospital operations modified considerably. Sufferers typically deferred elective procedures and appointments that weren’t pressing, and lots of hospitals needed to restructure their services to deal with an inflow of sufferers with COVID-19, a good portion of whom have been uninsured.

In the course of the public well being emergency, the federal authorities supplied $175 billion in subsidies to hospitals throughout the nation, largely by the Supplier Aid Fund and the COVID-19 Uninsured Program.

“Hospitals that are inclined to serve socioeconomically deprived sufferers and extra who’re uninsured are essentially the most weak to monetary losses,” says first creator Yang Wang, Ph.D., a doctoral scholar within the Bloomberg Faculty’s Division of Well being Coverage and Administration. “However the additional federal funding helped them keep operational.”

“COVID-19 and Hospital Monetary Viability within the U.S.” was co-authored by Yang Wang, Ge Bai, and Gerard Anderson.


Pandemic has half of U.S. hospitals working at a loss: report


Extra info:
COVID-19 and Hospital Monetary Viability within the U.S, JAMA Well being Discussion board (2022). DOI: 10.1001/jamahealthforum.2022.1018

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Johns Hopkins College Bloomberg Faculty of Public Well being

Quotation:
Federal subsidies stored COVID-strapped hospitals financially steady in 2020, first yr of pandemic (2022, Could 13)
retrieved 13 Could 2022
from https://medicalxpress.com/information/2022-05-federal-subsidies-covid-strapped-hospitals-financially.html

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