The Haves…
The Times report said that after the CARES Act was passed, hospital industry lobbyists met with senior Health and Human Services (HHS) officials, including Secretary Azar, to advise the agency how to distribute the money. One formula based payments on how much a hospital collected from Medicare the previous year. Another was based on the hospital’s previous year’s revenue. HHS did not consider each hospital’s existing financial resources.
But time was of the essence as reported cases of the virus spread around the country raising fears that hospitals and their intensive care units would be overwhelmed with patients. Fortunately, that did not happen.
A spokeswoman for HHS told the Times “This simple formula used the data we had on hand at that time to get relief funds to the largest number of health care facilities and providers as quickly as possible. While other approaches were considered, these would have taken much longer to implement.”
The Times cited a recent Kaiser Family Foundation study that showed that hospitals that served a greater proportion of privately insured patients got twice as much relief as those focused on low-income patients with Medicaid or no coverage at all.
…And the Have-Nots. What Can They Do?
“If you accumulated $18 billion and you are a not-for-profit hospital system, what’s it for if other than a reserve for an emergency?” said Dr. Robert Berenson, a physician and a health policy analyst for the Urban Institute, a Washington research group.
Even before the pandemic, roughly 400 hospitals in rural America were at risk of closing, said Alan Morgan, the chief executive of the National Rural Hospital Association. On average, the country’s 2,000 rural hospitals had enough cash to keep their doors open for 30 days.
At St. Claire HealthCare, the largest rural hospital system in eastern Kentucky, the number of surgeries dropped 88% during the pandemic. The system furloughed employees and canceled some vendor contracts. The $3 million the hospital received from the federal government in April will cover two weeks of payroll, said Donald Lloyd, the health system’s chief executive.
In 2018, Providence paid its chief executive, Dr. Rod Hochman, more than $10 million. That would be enough, noted the Times, to finance about a month of operations at the St. Claire hospitals in Kentucky.
The push for greater consolidation is inevitable. The legal hurdles will be significant. Eventually, economics will pick winners and losers. Stay tuned.
