Billions in hospital pandemic aid misallocated, analysis finds

The federal government provided tens of billions of dollars in COVID-19 aid to hospitals around the country to help deal with the pressures of the pandemic, but many recipients did not need the funds, according to a Dec. 4 report by The Wall Street Journal.

Federal aid strengthened some top-performing hospitals and health systems and failed to meet the needs of many others that were in financial disarray, the Journal found in an analysis of federal financial-disclosure reports. 

The discrepancy is partly down to how the government calculated aid for hospitals. Revenue, as a useful indicator of a hospital or health system's size, was used to allocate relief, instead of COVID-19 caseloads or financial pressure.

Some large health systems — including nonprofits — posted profits from patient care during periods they received government aid. Some systems were financially healthy enough that they could direct money into investment funds, while others spent money to expand facilities and campuses, according to the Journal.

However, many hospitals did not receive sufficient aid. It's no secret that hundreds of hospitals that received funding are reporting significant losses, with many laying off staff and making service line cuts to try and stay afloat. 

The revenue-based award system — particularly prominent at the beginning of the pandemic — tended to favor hospitals with higher prices, according to the report. Later, the government began targeting hospitals with more COVID-19 patients and those providing care to vulnerable populations for aid, but they still missed the mark for some hospitals. 

Overall, the amount of federal aid provided to hospitals had little to do with the levels of severe COVID-19 in the surrounding areas, according to the report. HHS told the Journal the aid program was designed under the Trump administration and transitioned to targeting hospitals most in need under the Biden administration, which handled about 10 percent of relief funds.

Early in the program, officials recognized criticism of the revenue-based award system but said the method was used to act quickly.

Click here to read the full report.


Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars