Study Finds COVID-19 Hospital Assistance Stabilized Hospital Finances in 2020

Federal aid supported hospital funding during the first year of the COVID-19 pandemic, even as hospital operations took a hit, according to a study published Friday in the JAMA Health Forum.

The pandemic has created unforeseen problems for the healthcare system, including hospitals canceling elective procedures and patients delaying treatment. At the same time, costs have risen.

While average operating margins suffered in 2020, average profit margins were the same as in previous years, Johns Hopkins University researchers found.

According to the study, the average operating margin decreased from -1.0% to -7.4% from 2019 to 2020. But the share of other non-operating income, including aid funding, rose nearly six percentage points from 4.4% to 10.3%.

The study says that the average rate of return “remained stable” compared to previous years. The researchers assessed the finances of 2,163 hospitals from January 2016 to December 2020 using RAND hospital data obtained from Medicare expense reports.

“While hospitals saw a significant decline in operating margins in 2020, their overall profit margins remained the same as in previous years, suggesting that the COVID-19 relief fund effectively offset hospitals’ financial losses during the COVID-19 pandemic.” – the message says. study found.

Under the Coronavirus Relief, Relief, and Economic Security Act, as well as the Paycheck Protection Program and the Health Improvement Act, $175 billion was allocated to support hospitals in 2020.