Buoyed by bailout funds, all major for-profit hospital chains reported increased profits in Q2

To be sure, in a rush to get the funds out, they tended to go to wealthier systems instead of those in a more vulnerable state and in requirement of monetary resources, while others contend it was supposed to assist systems ward off liquidity concerns that would have required them to close, decrease staff or services..

To keep health centers and the economy afloat, Congress passed enormous rescue bundles in recent months, including the Coronavirus Aid, Relief, and Economic Security Act, which allocated $175 billion for health centers and healthcare companies..

” A lot of money (never ever enough for medical facility industry lobbyists, to be sure) was flushed out the Treasury door in a hurry with loose, profitable distribution rules earlier this spring. The loss of rewarding elective surgery earnings and unforeseen COVID gear up to capacity expenses were real, too,” Thomas Miller, resident fellow at the American Enterprise Institute, stated..

The second quarter of 2020 was expected to be devastating for health center companies as the COVID-19 pandemic required lots of to stop business as typical in order to brace for a rise of clients and maintain precious resources..

Yet, all of the nations largest for-profit healthcare facility chains saw higher revenues, and some more than tripled their earnings compared to last year. In big part, federal relief funds propped up hospitals as volumes plunged, which raises concerns about whether the bailout funds were supposed to pad profits..

Samantha Liss/Healthcare Dive, information from companies

Last week, the countrys four biggest for-profit hospitals chains concluded reporting their second quarter results, with Tenet Health taping $88 million in net earnings, more than tripling from a year previously..

$ 26M.
$ 88M.

Still, critics shouldnt focus on simply one quarter alone. Its crucial to take a longer view of the problem, especially as the U.S. has yet to stamp out the novel coronavirus, Rick Gundling, senior vice president with Healthcare Financial Management Association, stated.

Tenet was especially exposed to the effects of the novel coronavirus with its outpatient branch that consists of United Surgical Partners International, operating 264 ambulatory surgical centers in addition to imaging centers and surgical hospitals.

” It wasnt done really well, as most of the CARES Act money went to organizations that didnt require the money,” Robert Berenson, a fellow at the Urban Institute, said..

Berenson, a former vice chair of the Medicare Payment Advisory Commission, lambasted the circulation as bad public policy, blaming HHS for doling out relief funds rapidly rather of establishing systems to evaluate requirement..

To get the cash out the door quickly, HHS funneled the first tranche of the CARES cash to healthcare facilities and providers based on their Medicare fee-for-service revenue. The policy has been criticized for putting health centers and providers with bigger shares of Medicaid clients at a downside..


Looking at the for-profit health center operators just catches a portion of the total health center market, Miller said, indicating the need to look at nonprofits, as well. In fact, not-for-profit leviathan Kaiser Permanente, an integrated health system that operates both hospitals and an insurance coverage unit, reported that its earnings for the quarter more than doubled to $4.5 billion — more than all the for-profit operators integrated

$ 783M.
$ 1.1 B.

However Brian Tanquilut, an analyst at Jefferies, said the funds have been critical.” I think the relief money was implied to keep the doors on these medical facilities open. If not for the grants and innovative payments, a great deal of healthcare facilities would have faced a liquidity crunch and would have had to minimize or close doors staffing levels and bed gain access to considerably.”.

$ 238.3 M.
$ 252M.

” The CARES Act contributed guaranteeing we did not have a monetary crisis while we were combating the pandemic crisis,” Tenet CEO Ron Rittenmeyer said throughout recentlys profits call with investors..

” That is the nature of a pandemic, it strikes the country at different times,” Gundling stated. “The supplier relief funds will be much required for those rises,” especially as suppliers like Tenet with a footprint in California, Arizona and Texas weather condition continued rises..

Net income.
Q2 2019.
Q2 2020.

The Dallas-based chain stated its bottom line took advantage of $523 million in federal relief funds and cost-cutting initiatives that resulted in lower expenses. Still, Tenet did report earnings fell 20% compared with the prior-year period as volumes fell..

Speed over need.

The healthcare facilities argue the funds were definitely necessary and the medical facility lobby continues to prompt Congress to release a new rescue bundle..



Despite earnings and volume declines, Nashville-based HCAs net income rose 40% to $1.1 billion during the second quarter, buoyed by $590 million in federal relief funds..

A comparable story emerged among Tenets competitors– volume plunged but revenues did not.

($ 167M).
$ 70M.

Community Health Systems posted an earnings of $70 million, up from a net loss in 2015, after recognizing $564 million in relief money in the 2nd quarter. And Universal Health Services was assisted by $162 million in rescue funds, and reported earnings of $252 million, up a little from the prior-year quarter..

Instrumental in preventing a financial crisis.

Patient volume did fall significantly in the 2nd quarter, as it recorded the full impacts of the virus..

Inpatient admission growth by quarter (same-facility)

For lots of health center operators, April was the low point in regards to client volumes, as mid- to late-March is when operators started to feel the impacts of the virus pressure and when regional and state federal governments limited optional procedures..

Providers state volumes are bouncing back and for some its close to near-normal..

In spite of much heavier COVID-19 caseloads in some places, companies stated they are adapting and still carrying out elective surgical treatments as city governments permit..

( 4.5%).
( 20.3%).

( 3.6%).
( 18.6%).


( 12.8%).

( 5.2%).
( 18.1%).

Health system.
Q3 2019.
Q4 2019.
Q1 2020.
Q2 2020.

In reality, Tenet kept in mind that hospital surgical treatments were just shy of near regular levels (90%) in the month of June. By contrast, healthcare facility surgical treatments were down 45% in the month of April and surgeries at its outpatient unit were nearly cleaned out.