Hospitals lost money during COVID

IT MAY BE counterintuitive, but experts have long been saying that the public health emergency actually lowered the amount of money being spent on health care.

The reason is that people have been deferring non-emergency care. So overall appointments for health care have decreased, even as providers are tasked with responding to COVID-19 and related demands for testing and vaccinations.

Two recent reports released by the Center for Health Information and Analysis put new numbers on this trend.

One report, released Thursday, measures hospital profitability for fiscal 2020. (Some hospitals ended their fiscal year in June 2020; others in September.) It found that hospital revenue from patient services dropped by $1.4 billion last year, while hospitals’ expenses increased by $1.3 billion. Hospital profitability was lower than the prior year, even after accounting for $1.8 billion in COVID relief spending.

Thirty-two of 49 hospitals still earned a profit, compared to 40 hospitals the prior year. The statewide median total margin – a measure of profit based on expenses compared to revenue – was 3.1 percent. Without COVID relief funds it would have been negative 4.2 percent, indicating significant losses. Community hospitals fared the worst, while teaching hospitals performed the best.

A different report released Monday on hospital discharges shows why patient revenues are declining so much. Pre-COVID, the state’s hospitals were consistently discharging between around 65,000 and 70,000 patients a month. In April 2020, during the first COVID surge, that number dropped to around 48,000. The number has since rebounded but through December, the number of hospital discharges has generally been between 55,000 and 65,000 each month.

Hospital officials are likely to use the new reports to advocate for additional relief money from the federal and state governments. Steve Walsh, president and CEO of the Massachusetts Health and Hospital Association, said in a statement that the data “confirms the tremendous financial challenges our providers have faced throughout the pandemic.” He noted that costs have increased for setting up vaccination clinics, buying personal protective equipment, and reducing patient capacity due to spacing requirements, at the same time as elective and other in-person procedures were put on hold. “Additional financial support is needed as our providers continue their response and navigate a new normal,” Walsh said. 



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