Feds Gave Bigger Covid Subsidies to Hospitals Charging Higher Prices

(p. A1) 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 ex-(p. A10)panded 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.

For the full story, see:

Melanie Evans, Liz Essley Whyte and Tom McGinty. “Covid Aid Went to Hospitals That Didn’t Need the Money.” The Wall Street Journal (Monday, Dec. 5, 2022): A1 & A10.

(Note: the online version of the story has the date December 4, 2022, and has the title “Billions in Covid Aid Went to Hospitals That Didn’t Need It.”)

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