Unintended Consequences of Pandemic Hospital Bailouts May Hasten Their Demise

This article was originally posted June 9, 2020 but was accidentally deleted and this is a repost as the article has been cited and comments are posted in various media.

We can thank the Covid pandemic for revealing the fissures in America’s healthcare system, especially how large hospital corporations continue to be focused on earnings over community healthcare. This article examines how the federal pandemic money (CARES Act) for hospitals exacerbated the problem, through distribution to the wealthiest hospital systems and not the struggling rural ones. A similar phenomenon was observed for the farm bailouts when giant agricultural corporations ended up with the money and not the small farmers. The continual winnowing of our nation’s food suppliers and healthcare resources weakens national health. Doling out money without restrictions and lacking a needs-profile for the hospitals resulted in the federal government giving billions based on how much money the hospitals already billed for services. This is like providing a sewage treatment plant to a city that already has one and leaving the neighboring community to treat its own effluent. Further, no other country spends wildly in healthcare, with fewer community health benefits. All funding for healthcare, which is largely paid for by the government through tax subsidies and government financed programs, as well as steep individual contributions in the private sector should be needs-based. We can’t expect the Trump Administration to understand these criteria since it has given billions to the wealthiest while stripping school lunch money from children. This article analyzes the fraying network of urban trauma centers and rural hospitals, with suggestions to abate the hemorrhaging.

Hospitals at Risk

Becker’s Hospital Report found that 20% of US hospitals are at risk of closure as of April 20, 2020. (Ellison, State By State Breakdown of 354 Hospitals At Risk of Closing, 2020) In real terms that means 354 hospitals are potentially unsustainable and 81% of those are considered critical to the community. In my home state, Washington, 18% of rural hospitals are in danger of failure and this isn’t as dire as many states where 50% of theirs could fail. Hospitals provide jobs, help economic development, and offer critical healthcare. Here is a list of the states where the greatest percentage of their hospitals are threatened with closure due to inadequate cash on hand:

1.       Tennessee-68%

2.       Alabama-60%

3.       Oklahoma-60%

4.       Arkansas-53%

5.       Mississippi-50%

6.       West Virginia-50%

7.       South Carolina-44%

8.       Georgia-41%

9.       Kentucky-40%

10.   Louisianna-37%

Hospitals at risk of failure in Washington State (Ellison, 2020)

Columbia County Health System in Dayton is a farming community which serves a county-wide population of 4,058. The nearest hospital is in Walla Walla which is a half-hour drive by car.

Mid-Valley Hospital in Omak (4,806) is a mountainous community in the Okanogan and serves a countywide population of 41,000

Three Rivers Hospital in Brewster is also in the Okanogan region and is in a town of 2,364 people. Seems like Mid-Valley and this one should combine forces.

Grays Harbor Community Hospital in Aberdeen is a fishing and logging community which serves a countywide population of 75,000. The next nearest hospitals would be Olympia or Shelton, both about and hours drive.

Whidbey Health Medical Center in Coupeville, the Whidbey Island County Seat has a population of 1,959 people. Since there is another hospital on the island in Oak Harbor, this wouldn’t be as critical if it succumbs.

To See How Your State Hospitals Fair

Here is the link to the statewide list: https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing

Covid-19 Hospital Bail-out Impact

In this latest government give-a-way most of the money went to the elite health care organizations, including local, Providence Healthcare, which is technically a nonprofit by statute, but makes so much money it has its own venture capital fund (12 billion in cash reserves), generating a billion dollars annually. (Jesse Drucker, 2020) And not to be outdone, lush Cleveland and Mayo Clinics also received millions. My former employer, Ascension Health, which is a Catholic hospital chain, makes so much money it has its own venture capital fund (15.5 billion in cash reserves) and it too received federal bail-out money. This table shows cash reserves and CARES fund distribution: (Liss, 2020)

Hospital Group	Cash in Reserves	Government Bailout
Ascension Health	15,500,000,000	211,000,000
Cleveland Clinic	7,000,000,000	199,000,000
Mayo Clinic	10,600,000,000	150,000,000
Providence Health	12,000,000,000	509,000,000
HCA (for profit)	51,300,000,000	1,000,000,000
Tenet (for profit)	731,000,000	517,000,000

This government largess was despite the fact all of these mega corporations have plenty of cash in reserves, so the government funding was to ensure their profits. Worse yet, the money they were given starves small rural hospitals which may be forced to close. I can’t think of a better example of the American “winner-take-all philosophy, but is this really how we should be running our critical healthcare system? It is impossible to research this and not feel the US government is cannibalizing its own health system.  This demonstrates another systemic failure in US healthcare, which puts profits ahead of patient health. I knew it was time to leave healthcare when the hospitals preferred hiring people without a healthcare background, the easier it is to put patients out of the equation if you think of them as widgets.

This article was written by Roberta Winter, an independent journalist and health policy analyst, who has published under the healthpolicymaven trademark since 2007. Please feel free to share this article virally.

References

Ellison, A. (2020, March 6). Five Hospitals Face Imminent Closure As Covid-19 Wreaks Havoc. Beckers Hospital Review. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/5-washington-hospitals-face-imminent-closure-as-covid-19-wreaks-havoc.html

Ellison, A. (2020, April 9). State By State Breakdown of 354 Hospitals At Risk of Closing. Becker Hospital Report. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing.html

Jesse Drucker, J. S.-G. (2020, May 25). Wealthiest Hospitals Get Billions in Bailbouts for Struggling Providers. The New York Times. Retrieved June 8, 2020, from https://www.nytimes.com/2020/05/25/business/coronavirus-hospitals-bailout.html

Liss, S. (2020, May 26). Here's How Much For Profit Hospitals Have Received In Bailout Money So Far. Healthcare Dive.com. Retrieved June 8, 2020, from https://www.healthcaredive.com/news/heres-how-much-for-profit-hospitals-have-received-in-covid-19-bailout-fund/578378/