Healthcare News of Note: Federal bailout money helped some of the nation’s wealthier hospitals prosper despite COVID-19

• Records of the nation’s richest hospitals and health systems show they recorded hundreds of millions of dollars in surpluses after accepting federal healthcare bailout grants.
• A survey of radiation oncologists during the winter shows an increase in new patients with advanced-stage cancers coming into clinics for treatment, compared to before the pandemic.
• Physicians responding to an AMA study conducted in December and January say alleviation of prior authorization burdens were minimal and brief at best.

Over the last couple of weeks, I’ve found these industry news stories that should be of interest to healthcare finance professionals.

1. Wealthier U.S. hospitals’ records show huge surpluses thanks to federal relief funds while poorer healthcare organizations struggle

An April 5 KHN article reported that some of the nation’s richest hospitals and health systems “recorded hundreds of millions of dollars in surpluses after accepting the lion’s share of the federal health care bailout grants, their records show.”

“But poorer hospitals — many serving rural and minority populations — got a tinier slice of the pie and limped through the year with deficits, downgrades of their bond ratings and bleak fiscal futures,” the article continued.

“A lot of the funding helped the wealthy hospitals at a time, especially in New York, when safety-net hospitals were hemorrhaging,” said Colleen Grogan, a health policy professor at the University of Chicago. “We could have tailored it to hospitals we knew were really suffering and taking on a disproportionate amount of the burden.”

The KHN research first was published in an April 1 article in the Washington Post. In a subsequent letter to the editor, the American Hospital Association sought to add context to the findings, with President and CEO Rick Pollack writing:

“The federal government created multiple formulas to allocate funds to all types of hospitals and worked appropriately to get this critical relief out quickly as we were facing a crisis situation. These funds, which providers are held accountable for under law, have allowed hospitals to continue to serve all who need care.

“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.”

Not all large or more well-heeled hospitals and health systems faired so well, according to the KHN article by authors Jordan Rau and Christine Spolar.

 “A few systems, including the for-profit chain HCA Healthcare, returned federal funds when they saw they had skirted their worst-case scenarios. But most spent the aid and held onto any leftover money and new grants to cover anticipated pandemic costs this year because hospital executives fear more case spikes.”

The comprehensive piece also describes:

• How the first $50 billion in relief funds “was sent out indiscriminately as a life support,” and how HHS tried to target subsequent distributions.
• That “even with the targeted aid, recipients included well-endowed academic medical centers and major urban hospitals, and only $14 billion took profitability into consideration, HHS documents show.”

2. ASTRO study: Oncologists notice an increase in new patients with advanced-stage cancers

A March 31 Healthcare Dive article reported, “A survey of radiation oncologists conducted this winter has found an increase in new patients with advanced-stage cancers coming into clinics for treatment, compared to before the pandemic.

“The industry groups’ research adds to evidence bearing out health officials’ fears that many people skipped getting cancer screenings in 2020 as they avoided going to the doctor to minimize the risk of COVID-19 infection, and healthcare providers focused on their pandemic response efforts.”

Results of the online American Society for Radiation Oncology (ASTRO) survey, which was completed by 117 radiation oncology practice leaders between Jan. 15 and Feb. 7, 2021, shows:

• 66% more advanced disease in new patients compared to pre-pandemic
• 73% of the practices had patients who missed cancer screenings
• 66% of existing patients experienced treatment interruptions due to the pandemic, most often caused by COVID-19 quarantine or illness affecting the patient or their caregiver

ASTRO’s “COVID-19 and Radiation Oncology” survey report also said, “Because the pandemic and cancer cause disproportionately more harm for Black and other medically underserved populations, these rates may be even higher for f some vulnerable communities.”

The Healthcare Dive article also reported, “The ASTRO findings echo results of a recent poll from the Association for Molecular Pathology that showed 85% of clinical laboratories reported molecular testing for cancer declined during April to June” 2020.

3. AMA study: Physicians say there was little prior authorization relief during COVID-19

An April 7 Modern Healthcare article reported, “While providers expected insurers to relax prior authorization policies during the pandemic, 70% of surveyed physicians reported the changes were brief, if made at all, and did not relieve some of their burdens.”

Matti Gelman, the article author, also wrote: “Slow prior authorization protocols contributed to care delivery delays and poor treatment outcomes for some patients during the surge in COVID-19 cases last winter, according to American Medical Association survey.”

Reflecting physicians’ experiences during a three-week period last November and December, when COVID-19 cases were surging, other findings from the AMA survey include:

•  85% of physicians describe the burden of prior authorizations as “high” or “extremely high”
•  16 hours per week, on average, is spent by physicians and their staff seeking prior authorization for patient care
• 40 prior authorizations are processed per week by each physician and their staff members
• Approximately half of those surveyed say they had to hire additional staff to oversee the process

HFMA bonus content

The April issue of hfm magazine should be hitting mailboxes soon. It is also available online at hfma.org. Just some of the great articles in this issue are:

• “Culture eats strategy for lunch,” by Senior Editor Eric Reese is about the pitfalls that come with M&A and how to avoid them.
•  HFMA President & CEO Joe Fifer’s column “Addressing racial disparities in healthcare: It’s time now.”
•  “Why it’s time for the healthcare industry to address cost effectiveness of health” is a Q&A with Katie Gilfillan, HFMA’s director of professional practice and clinical relationships, about HFMA’s Cost Effectiveness of Health Summit May 6-7.