Home Public Health 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 saved hospitals throughout the U.S. afloat in the course of the first 12 months of the COVID-19 pandemic, successfully defraying revenue loss even for probably the most susceptible medical facilities, researchers from the Johns Hopkins Bloomberg College of Public Well being report in a brand new examine.

The examine, revealed 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 determine whether or not and easy methods to difficulty future subsidies throughout this pandemic or others which 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 12 months of the pandemic—January to December 2020. The researchers used CMS Hospital Value Reviews for hospitals’ total 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 total misplaced a median of $1 for each $100 earned from affected person care actions, resulting in an working margin of detrimental 1 %. In 2020, that quantity dropped to between $7 and $8 misplaced per each $100 earned, an working margin of detrimental 7.4 %.

For presidency, rural, and smaller hospitals, which frequently function on the sting of monetary viability, the typical total revenue margin stayed secure or improved in the course of the first 12 months of the pandemic resulting from COVID-19-related subsidies. From 2019 to 2020, the typical total revenue margin elevated from:

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

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

When COVID-19 gained traction within the U.S. in early 2020, hospital operations modified considerably. Sufferers usually 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.

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

“Hospitals that are likely to serve socioeconomically deprived sufferers and extra who’re uninsured are probably the most susceptible to monetary losses,” says first writer Yang Wang, Ph.D., a doctoral pupil within the Bloomberg College’s Division of Well being Coverage and Administration. “However the further 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 data:
COVID-19 and Hospital Monetary Viability within the U.S, JAMA Well being Discussion board (2022). DOI: 10.1001/jamahealthforum.2022.1018

Offered by
Johns Hopkins College Bloomberg College of Public Well being

Quotation:
Federal subsidies saved COVID-strapped hospitals financially secure in 2020, first 12 months of pandemic (2022, Could 13)
retrieved 13 Could 2022
from https://medicalxpress.com/information/2022-05-federal-subsidies-covid-strapped-hospitals-financially.html

This doc is topic to copyright. Other than any honest dealing for the aim of personal examine or analysis, no
half could also be reproduced with out the written permission. The content material is supplied for data functions solely.



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