- The disbursement of federal coronavirus relief funding to hospitals disproportionately impacted by COVID-19 patients early on in the pandemic was far from equitable, according to a study published Friday in JAMA Health Forum.
- Larger academic medical centers received a significantly larger proportion of Coronavirus Aid, Relief, and Economic Security Act funds than smaller and more rural hospitals, the study of more than 950 facilities concluded.
- While the study's researchers concluded that funding "may have disproportionately gone to hospitals that were in a stronger financial situation prior to the pandemic," relief did also go to hospitals that had a larger proportion of patients infected by COVID-19.
A large proportion of the nation's hospitals received CARES Act relief funds at some point during the COVID-19 pandemic. Those disbursements are credited with improving liquidity in the wake of the pandemic even as margins deteriorated.
The CARES Act provided $65.2 billion in funding to the nation's hospitals from the start of the pandemic to the end of May of last year, when many deferred elective procedures and non-COVID patient volumes plunged. Of that sum, about $22 billion was allocated to just over 1,000 hospitals in regions disproportionately impacted during the initial stages of the pandemic, with another $11.5 billion disbursed in a later round. These are referred to as High-Impact Distribution Funds.
The study, conducted by researchers from Rand Corp., scrutinized how those allocations were made. Its findings echo a recently published Health Affairs study that reached a similar conclusion.
An equitable distribution of the $22 billion means each of the 952 hospitals scrutinized for the study should have received on average more than $20 million apiece. While the mean first-round of payments to high impact hospitals was $22.1 million, about half received $20 million or less, including nearly a quarter that received less than $5 million. Yet 17% received $30 million or more, including 8% that received more than $50 million.
Moreover, hospitals that had larger cumulative assets and endowments — funds they could have used to weather the early months of the pandemic — tended to receive significantly higher High-Impact Distribution Funds payments. The study concluded that for each 10% incremental increase in a hospital's assets, it received an additional 5.3% bump in its payment. For each 10% increase in a hospital's endowment, it received a 2.6% payment bump.
"The results suggest that CARES Act funds may have disproportionately gone to hospitals that were in a stronger financial situation prior to the pandemic compared with those that were not," the study's authors concluded.
The study did not provide any suggestions as to how to rectify disbursements of such funding in the future.