Some of the nation’s richest health systems reportedly thrived financially through the pandemic — reporting hundreds of millions of dollars in surpluses after accepting massive federal bailouts, a new report shows.
In a report from Kaiser Health News posted by the Washington Post, surpluses, for example, piled up at Baylor Scott & White Health, the largest nonprofit hospital system in Texas, the Mayo Clinic, Pittsburgh’s UPMC, and NYU Langone Health.
"A lot of the funding helped the wealthy hospitals at a time, especially in New York, when safety-net hospitals were hemorrhaging," Colleen Grogan, a health policy professor at the University of Chicago, told KHN.
"We could have tailored it to hospitals we knew were really suffering and taking on a disproportionate amount of the burden.”
KHN reported the Baylor system, which runs Baylor University Medical Center in Dallas and 51 other hospitals, says it spent $257 million last year on pandemic-related costs and has $197 million in unspent federal relief funds to use this year to cover costs of battling the virus and refrigerating vaccines.
Yet NewYork-Presbyterian Hospital and CommonSpirit Health, a 140-hospital Catholic system that operates in 21 states, lost money despite federal grants in the vicinity of a billion dollars each, the report noted.
According to the report, a lot of the lopsided distribution was caused by the way the Department of Health and Human Services based the allotment of the initial bailout funds on hospitals’ past revenue. The system favored institutions with wealthy patients relying on private health plans over those relying on lower-paying government insurance.
When HHS tried to limit how much aid hospitals could keep based on their profits, the effort was beaten back by the industry and Congress, KHN reported.
In a breakdown, the report stated UPMC accepted $460 million in bailout funds while collecting $2.5 billion more in revenue in 2020 than in 2019. It retains $80 million in unspent relief funds, which the health system said it expects to use.
In April 2020, the Mayo Clinic in Rochester, Minn., forecast up to $3 billion in lost revenue because of the pandemic. Instead, Mayo, which received $338 million in federal relief funds, ended the year with revenue that was $202 million higher than in 2019. Mayo recorded a $728 million surplus.
NYU Langone Health received $461 million in relief funds, which covered about a third of its pandemic-related losses, Daniel Widawsky, chief financial officer, told KHN. Another third of Langone’s losses was absorbed by record-high financial performance in the months before the pandemic, and cost control addressed the rest, he told KHN.
Langone ended its fiscal year in August with $208 million in net income, and recorded a $136 million surplus in the final quarter of 2020, or 5.5%, KHN reported.
Despite accepting $942 million in bailout funds, NewYork-Presbyterian Hospital had a $457 million operating deficit, a 7% loss, at the end of September. KHN reported. Its most recent disclosure reported $3.8 billion in cash and short-term investments, enough to keep operating for more than a year, KHN reported.
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