Hospitals see continued weaponization of pandemic aid

Nationwide, many hospitals face repeated claims that the $178 billion Provider Relief Fund authorized by Congress was a lavish windfall versus necessary aid for institutions that were a backbone of the nation's public health infrastructure during the COVID-19 crisis. 

The argument that hospitals used pandemic aid to enrich themselves is recurring. Hospitals' responses are the same, whether they come from American Hospital Association CEO Rick Pollack or state-level hospital associations. 

"In most instances, hospitals did not apply for the specific amount of funds they received, and if hospitals received more funds than their COVID-19-related expenses and lost revenue will ultimately show, there will be a reporting and auditing process once the pandemic ends, and the excess funding will be returned to the government," Mr. Pollack wrote in a letter to the editor to The Washington Post in response to a 2021 article suggesting hospitals got richer from their Provider Relief Fund allotments. 

The latest iteration of the critique that hospitals misused pandemic relief ran in The Washington Post on June 22, this time focusing on Atrium Health, a 40-hospital system with footprints in North Carolina, South Carolina, Alabama and Georgia. 

"Atrium got $617 million in government relief from April 2020 to December 2021," the article states. "The money, along with a soaring stock market and surging payments for patient care, helped it reap more than a billion dollars in surplus revenue last year."

The article coincided with a report initiated and issued by North Carolina State Treasurer Dale Folwell, a Republican who is a critic of the business practices of Atrium and other health systems. Mr. Folwell invited policy researchers to analyze audited financial reports from Atrium, Novant Health, UNC Health, Duke Health, Vidant Health (now ECU Health), Cone Health and WakeMed Health.

"After taking taxpayer-funded COVID relief dollars, North Carolina's seven large hospital systems reaped $7.1 billion growth in cash and financial investments from 2019 to 2021," the report reads. "Unless state lawmakers take action, the profits gained from the misdirection of taxpayer dollars are expected to fuel record levels of consolidation and price increases." 

The North Carolina Hospital Association was quick to reply with a 670-word statement, found in full here and excerpted below:  

"Congress recognized the critical role hospitals play as the backbone of our healthcare system and early in the pandemic provided relief funds to ensure hospitals would remain resilient. Hospitals used these funds to prevent, prepare for, and respond to COVID-19, including setting up alternative care sites, procuring personal protective equipment and testing, administering mass vaccination events and outreach, supporting their workforce, and expanding telehealth capabilities, to name a few examples. The report released today falsely demonizes health systems for applying for and using Provider Relief Funds to respond to the COVID-19 crisis.

"Cherry-picking financial data, and then spinning it, is not reflective of the many immense struggles and challenges facing the hospital field, including a workforce shortage crisis, along with skyrocketing costs for supplies, equipment, drugs and labor, and near-historic levels of inflation," the statement continues. "These surges in input costs, along with ongoing challenges from the COVID-19 pandemic and Medicare payment cuts, have continued to strain the resources the hospital field needs to care for their patients and communities."

Atrium responded to the Post report in this statement to Becker's:

"It's troubling that health systems like Atrium Health are being attacked while we are still caring for communities that are recovering from the pandemic. The reality is the $719 million in provider relief funds we have received covers less than half of the adverse $1.55 billion financial impact we have incurred as a result of the pandemic.

"We're deeply appreciative of the provider relief funds we have received to date. These critical funds have allowed us to pay our front-line care givers without layoffs, keep our teammates safe by providing them with appropriate personal protective equipment, provide mass vaccination and community testing, increase beds and ventilators to sustain each surge, and keep rural hospitals open that allowed patients to receive care close to home.

"We are very fortunate that our organization's leaders and independent governing board have insisted on financial stability and strength to weather storms like the pandemic. This financial stability has allowed us to invest in research, new technologies and state-of-the-art facilities — including a new school of medicine campus — to provide the highest quality care at the lowest possible cost for the communities we are privileged to serve."

No distributions from the Provider Relief Fund have been made or announced for expenses related to the delta and omicron variant surges, leaving many hospitals facing serious financial and operational challenges. Omicron's effect on hospital revenues in 2022 has been especially stubborn and harmful. "The first month of 2022 was devastating for hospitals and health systems nationwide as they were hit full force by the omicron tidal wave," Kaufman Hall summarized in February. Since then, revenues saw a brief rebound in March before continuing their decline, strained by expenses. 

Scott Becker, publisher of Becker's Healthcare, shared his thoughts on the criticism hospitals face as recipients of COVID-19 relief funds: "When I look at the central role that large health systems played in combating the pandemic, and quite frankly the key role they played, I'm not surprised that the larger systems received more federal funds to help manage and vaccinate and take care of patients. This makes sense to me.

"Over the past few years, we all got a new lesson in how big and key a role large health systems play from a public health perspective and how it would be very difficult to not support the health systems or to have less of the large health systems. Whether Northwell Health in New York or Atrium in the southeast and so many more, thank goodness for the role they played in the pandemic and every day. Post-federal government special support, large systems and small systems are struggling to make the profit and loss statements work. This is a reflection of the need we have for their services and the increased costs of staff and supplies and everything else. Rather than attacking the big and small systems, we best figure out how to support them." 

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