Study suggests smaller rural hospitals rely heavily on COVID relief to survive

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A new study from the Johns Hopkins Bloomberg School of Public Health finds that more than $170 billion in Covid-19 relief money the federal government has earmarked for hospitals struggling during the pandemic has helped health care facilities stay afloat by offsetting the huge financial losses caused by the coronavirus. .

key facts

The $175 billion in subsidies provided to hospitals and other health care facilities through the Coronavirus Control, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program and the Healthcare Enhancement Act have allowed facilities to maintain similar earnings for years before the pandemic, a study published in JAMA Health Forum on Friday.

The study — which compared operating and profit margins from 2016 to 2019 at more than 1,300 hospitals nationwide and margins during the first year of the pandemic — found that hospitals lost an average of $7 to $8 for every $100 earned from patient care in 2020, compared to $1 for every $100 earned in the years leading up to the Covid-19 outbreak.

Despite these losses, from 2019 to 2020, some of the most vulnerable healthcare facilities — government, rural and small hospitals — saw profit margins increase compared to the years before the pandemic with the help of CARES money, the researchers found.

The Covid-19 relief funds provide a “lifeline” to keep financially distressed hospitals running, said Ji Bai, study author and professor in the Department of Health Policy and Management at Bloomberg College, in a statement.

Huge number

54 billion dollars. That’s how much income hospitals across the country are expected to lose in 2021, even taking into account the CARES funding, according to estimates by Kaufman-Hall, a healthcare advisory group.

main background

Hospitals have taken a huge financial toll as a result of the Covid-19 pandemic as they have been forced to delay more lucrative elective procedures and appointments while taking on new costs to treat a flood of coronavirus patients, many of whom are uninsured. Small rural hospitals—many of which were struggling financially before the pandemic—often suffered the most severe financial impacts as they looked after a disproportionate number of patients covered by Medicaid, Medicare or the Children’s Health Insurance Program. In 2020, Congress approved $175 billion in emergency funding to help health care facilities offset losses associated with the pandemic. The John Hopkins study is one of the first investigations into how this money has affected hospital operations during the Covid crisis.

in-depth reading

Hospitals in less vaccinated areas struggle financially as infections mount and stimulus runs out (Washington Post)

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