California hospitals sustained billions in losses in 2021, Kaufman Hall analysis finds

California hospitals continued to face financial losses during the second year of the COVID-19 pandemic, according to an April 19 report from Kaufman Hall. 

Data was derived from a California Hospital Association member survey and Kaufman Hall's proprietary database, representing 79 hospitals.

Six things to know:

1. California hospitals experienced nearly $6 billion in financial losses in 2021, which were reduced to $3.7 billion with federal support. The state's hospitals saw $8.4 billion in losses in 2020. 

2. Hospitals experienced a 26 percent reduction in operating margin in 2021 from pre-pandemic levels.  

3. Hospitals saw fewer patients in 2021 compared to 2019, but the patients that did visit had more severe illnesses. 

4. Total California hospital expenses rose by 15 percent last year, above the national average of 11 percent. 

5. Workforce shortages and global supply chain issues are driving up costs. 

6. Median hospital margins were negative in the wake of the omicron variant's peak in late 2021, early 2022. Even if hospital performance rebounds later this year, margins may remain depressed for several months or for the remainder of 2022, according to the report. 

Read the full report here

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