Report finds uneven distribution of federal, state aid for Mass. hospitals

DATE : August 06, 2020

A report released Thursday morning by the Center for Health Information and Analysis shows that despite federal and state aid, many Massachusetts hospitals will face a long road to recovery as the state struggles to climb out of the coronavirus pandemic.

About half of the state’s 61 acute care hospitals submitted the voluntary data from March through May to the state for the study, representing 11 of the 25 health systems in Massachusetts.

The 31 participating hospitals saw net income decline dramatically in March, with hospitals reporting net losses of between $773,000 at Nantucket Cottage Hospital to $76 million at Boston Children’s Hospital. Only two hospitals reported gains in March: Signature Healthcare Brockton Hospital reported a $1.8 million net gain, and South Shore Hospital reported a $55.2 million net gain. In the case of South Shore, it was due to a $60 million sale of investment assets, not through hospital operations.

Hospital margins improved by April and May, however, thanks to $642.4 million in federal CARES Act payments and $83.8 million in state aid reported by the 31 hospitals. In April, seven hospitals reported margins in the black, and in May, 17 hospitals reported positive margins.  Yet CHIA said that the funding hadn’t gone far enough to bring most hospitals back to where they had been in Dec. 31, 2019, and wasn’t enough to lift the majority of hospitals out of red ink.

“While state and federal COVID-19 relief funds supplemented the operating revenue reported in April and May, in aggregate total operating revenue remained lower than total expenses for the participating hospitals,” said the report. 

The money was also unevenly distributed to hospitals around the state, the report said. Academic medical centers received the most amount of federal and state assistance, with five of them reporting $358 million in coronavirus funding. As a result, Academic Medical Centers reported May revenue that had rebounded 8.3% above December baseline levels. 

Meanwhile, the 13 community hospitals with a large mix of patients on government insurance received $130.4 million. Those hospitals reported May operating revenue 3.3% below December baseline levels. 

The state’s four teaching hospitals received $99 million in coronavirus funding, and reported May operating revenue 16.6% below December baseline levels. 

Community hospitals without large government insured patients received among the lowest amounts of federal and state stimulus. Those 11 hospitals received $101 million in coronavirus funding, and reported May operating revenue 37.8% below December baseline.

See: Hospital and Health System Financial Performance on the CHIA website for more information.


Story by Jessica Bartlett, Reporter, Boston Business Journal, Thursday, August 6, 2020