A new study by the North Carolina State Health Plan and the National Academy for State Health Policy found that the taxpayer funded COVID hospital bailout was used by the state’s wealthiest hospitals to achieve record profits and a $7.1 billion growth in cash and investments during the pandemic.
The massive growth was so large, in fact, that it rivaled what the whole state spends for the entire year on K-12 education.
One system’s profit margin was so big it exceeded that of tobacco and investment banking.
Here are some staggering facts:
- After taking $1.5 billion in taxpayer funded COVID relief meant for struggling hospitals, North Carolina’s biggest and richest hospitals reaped $7.1 billion in cash and investments returns from 2019 to 2021.
- Even though the tax dollars were intended to provide relief and ensure people could access care, dominant hospital systems did not share their profits with disadvantaged patients. Charity care spending fell across a third of all North Carolina hospitals in 2020. Some hospitals even increased billing for poor patients eligible for charity care. Atrium went so far as to sue hundreds of patients.
- During the height of the pandemic, only a sliver of their billions of growth in cash and investments was devoted to increasing charity care spending despite record unemployment rates and economic pain from the pandemic and the lockdowns.
If hospitals didn’t use the money for charity care, then what was it used for? According of Dr. Ge Bai of Johns Hopkins, it is likely that it was used to “facilitate mergers and acquisitions.”
All of this comes as the mega-hospital lobby repeatedly “cried poor” in their attempts to kill legislation aimed at lowering healthcare costs for patients.
The wealthy systems and their well-funded lobbying arm have fought hard to defeat measures that would protect patients from surprise medical billing.
They sought to limit competition by opposing Certificate of Need reforms.
And they killed a bill that would have expanded Medicaid to hundreds of thousands of North Carolinians, and would have expanded access to care in rural areas though the SAVE Act.
During the pandemic, rural hospitals struggled and closed. But the biggest and richest systems got even bigger and richer.
Then they turned around, cut charity care, billed poor people more, and fought measures that would have lowered costs for their patients.
And they did it all while claiming poverty and pocketing $1.5 billion in taxpayer relief.