Billions in Covid Aid Went to Hospitals That Didn’t Need It

The federal funds benefited some well-off medical systems but weren’t enough for many that were struggling to provide pandemic care

By Melanie Evans, Liz Essley Whyte and Tom McGinty of The WSJ. Excerpts:

"When Covid-19 struck, the U.S. government gave hospitals tens of billions of dollars to help them cope with the strains of the pandemic.

Many of the hospitals didn’t need it.

The aid enriched some well-off systems, while failing to meet the needs of many that were struggling, according to a Wall Street Journal analysis of federal financial-disclosure reports.

The mismatch stemmed in part from the way the federal government determined how much a hospital should get. A main factor used to allocate relief was a hospital’s revenue, rather than Covid caseload or financial distress. The idea was that revenue was a good indicator of a hospital’s size.

Among the recipients were large, wealthy hospital owners—including some nonprofits—that reported profits from patient care during the periods they got aid. Some were well off enough to put money into investment funds, while others spent on new facilities and expanded campuses.

Hundreds of other hospitals that got federal funding, however, reported losses. Some were forced to lay off nurses and make other cuts, saying they didn’t get enough aid to overcome their strains. Some served areas that had among the highest Covid death rates.

The revenue-based award system, especially prevalent in the early days of the pandemic, tended to favor hospitals with higher prices.

As the pandemic continued, the government targeted hospitals with higher numbers of Covid patients and those serving needy populations for aid, but the awards still missed some struggling hospitals.

Overall, the amount of federal cash hospitals received had very little to do with the levels of severe Covid in the areas around them, according to the analysis."

"1,257 hospitals that got federal pandemic aid were profitable when they got the funding"

"These hospitals, which got a total of $16.7 billion in aid, reported $53.6 billion in profits from patient care, not including the aid, for the years during the pandemic"

"For 783 hospitals, $10 billion in aid helped swing their losses to profits."

"1,644 hospitals, which received $35 billion in federal pandemic aid, reported a loss of $129.1 billion during the period"

"HHS handed out the first and largest chunk of aid, some $50 billion, based on how much money hospitals had reported in revenue prior to the pandemic."

"Part of the reason Arnot Ogden and other unprofitable hospitals didn’t get as much federal aid as moneymaking peers was their comparatively low prices"

"A UCHealth spokesman said the Journal’s analysis was flawed because its measure of pandemic relief by bed doesn’t reflect all of UCHealth’s outpatient care, which accounts for a significant share of its revenue. He also challenged the use of local Covid death rates to measure pandemic strain on hospitals, saying it wouldn’t reflect patient transfers from outlying areas or hospital quality."