Latest Covid-19 Aid Package Scales Back Funds to Hospitals, Clinics

About $25 billion hasn’t been spent of the $175 billion health-care relief fund Congress created in the spring. Even so, funds won’t be enough to meet the strain of the latest nationwide surge, said Rick Pollack, the American Hospital Association’s chief executive. More than 125,000 Covid-19 patients were in U.S. hospitals as of Wednesday, according to the Covid Tracking Project, another national record.

“The surge in cases is ongoing,” said Tom Nickels, the association’s executive vice president, increasing hospitals’ financial strain from higher staffing and supply costs for Covid-19 patients and revenue losses, as other services are suspended. “We anticipate we will need additional funding.”

New limits on relief may also inadvertently disadvantage hospitals with patients most severely affected by the pandemic, health-policy experts said.

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Harder Hit by Covid-19

A new estimate of federal pandemic health-
care relief found counties with a greater share
of Black residents got more aid, on average,
but had higher Covid-19 cases and deaths
than other counties with equal relief funding.

Counties with the highest share of

Black residents*

Counties with the lowest share*

COVID-19 DEATHS PER 100,000†

CARES ACT FUNDS PER RESIDENT

A formula used last spring by the Department of Health and Human Services to allocate early relief to providers based awards on revenue. This method resulted in lopsided relief that left hard-hit communities with large Black populations with insufficient funding to match the pandemic’s toll, researchers found.

In the latest coronavirus aid package, Congress said most federal relief must be used to reimburse providers who apply to be paid back for lost revenue or higher expenses. An earlier draft of the bill instead directed HHS to consider providers at risk of closing and those underrepresented in early relief payouts, according to hospital trade groups.

Targeting revenue losses fails to take into account that some hospitals earn more revenue because they charge high prices to largely well-insured patients, while others with patients who struggle to get care take in less revenue, said researchers who analyzed early pandemic relief and health policy and economists not involved in the study.

“You can’t lose what you never had,” said Michael Norby, chief financial officer for Houston-based Harris Health System, where slightly more than half of patients are uninsured.

Prior research shows health-care revenue better reflects patients’ access to care, not their medical needs, said health-policy experts. “It’s pretty obvious,” said Loren Adler, an economist with the USC-Brookings Schaeffer Initiative for Health Policy, who wasn’t involved in the recent analysis of federal pandemic health-care relief.

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Higher Risk

Counties with greater numbers of Black
residents had higher rates of disease that
increase Covid-19 risks, including
hypertension, than other counties that got
equal pandemic health-care relief funding.

Counties with the highest share of

Black residents*

Counties with the lowest share*

PREVALENCE OF HYPERTENSION†

CARES ACT FUNDS PER RESIDENT

In an analysis published in August in the Journal of the American Medical Association, researchers found that coronavirus relief money wasn’t enough to match the needs of hard-hit communities with more Black residents. According to research they are more likely to face barriers to necessary care, such as insurance gaps or racial bias.

The pandemic is having an outsize impact on Black Americans, who are more likely to be hospitalized and die from the disease than whites, Centers for Disease Control and Prevention data show.

After factoring all announced spending through July 5, which totaled $120 billion, counties with the greatest share of Black residents received more funding overall, $506 per person, on average, versus $380 across remaining counties, the research said.

But when compared with largely white counties that got equal relief funds, counties with the largest share of Black residents had not only more Covid-19 deaths, but also more Covid-19 cases, more widespread chronic disease such as diabetes and hypertension that raise risks from the virus, and hospitals with less cash in reserve and worse margins.

“Even when we try to help the people most in need, while completely well-intentioned, we do manage to help them a little bit, but not as much as we ought to have,” said Amitabh Chandra, a Harvard University health-care economist and one of the study’s authors.

The initial revenue formula allowed HHS to distribute aid widely and quickly, an agency spokeswoman said. Federal officials considered other approaches, but they would have taken longer, she said. Subsequent payouts used more targeted approaches. The decision by Congress to call for revenue formulas in the new relief package endorses the agency’s approach, the spokeswoman said.

Results of the new study raise questions about how effectively federal aid is reaching communities with the greatest risks from Covid-19, said health-policy experts. Pandemic relief from Congress last spring largely targeted struggling businesses, including hospitals, said Sherry Glied, an economist and dean at New York University’s Robert F. Wagner Graduate School of Public Service.

“Does it make sense here? If you’re trying to save jobs in the hospital, sure. But if what you’re trying to do is improve health, not so much,” she said.

For some small rural hospitals, spring relief funds to shore-up finances proved critical. The nation’s smallest hospitals generally earn about 80% of their revenue from outpatient services, which were largely suspended for weeks early in the pandemic.

The only hospital in Starke County, Ind., closed many services when the state ordered a halt to nonessential care in April. Starke Hospital in Knox, Ind., lost millions in revenue, said spokeswoman Kelly Credit. Federal relief offset losses, covered Covid-19 costs and supported critical services, she said.

The county received roughly the same $600 to $700 in pandemic funding per person as Terrebonne Parish, La., although the needs weren’t similar.

The parish reported 54 deaths from Covid-19 for every 100,000 people between the beginning of February and the end of June, the researchers said. Black residents make up one-fifth of the population there. The figure was 13 deaths per 100,000 people in Starke County, where Black residents make up less than 1% of the population.

The pandemic delivered a “double whammy” to patients at the Teche Action Clinic in the Terrebonne Parish city of Houma, La., said physician Ronald Marts. Patients fear the new virus, but economic damage from the pandemic has also made it harder to seek care for chronic, debilitating conditions, he said.

Dwayne Clay, 53, continues to battle muscle weakness, pain and numbness after becoming ill from the coronavirus. Mr. Clay entered Ochsner Health’s Leonard J. Chabert Medical Center in April and remained there for 35 days.

His insurance won’t cover continued physical rehabilitation, he said. A truck driver before the pandemic, Mr. Clay has applied for disability. “I am having a hard time—financially, spiritually, medically and emotionally,” he said.

Write to Melanie Evans at [email protected]

About $25 billion hasn’t been spent of the $175 billion health-care relief fund Congress created in the spring. Even so, funds won’t be enough to meet the strain of the latest nationwide surge, said Rick Pollack, the American Hospital Association’s chief executive. More than 125,000 Covid-19 patients were in U.S. hospitals as of Wednesday, according to the Covid Tracking Project, another national record.

“The surge in cases is ongoing,” said Tom Nickels, the association’s executive vice president, increasing hospitals’ financial strain from higher staffing and supply costs for Covid-19 patients and revenue losses, as other services are suspended. “We anticipate we will need additional funding.”

New limits on relief may also inadvertently disadvantage hospitals with patients most severely affected by the pandemic, health-policy experts said.

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Harder Hit by Covid-19

A new estimate of federal pandemic health-
care relief found counties with a greater share
of Black residents got more aid, on average,
but had higher Covid-19 cases and deaths
than other counties with equal relief funding.

Counties with the highest share of

Black residents*

Counties with the lowest share*

COVID-19 DEATHS PER 100,000†

CARES ACT FUNDS PER RESIDENT

A formula used last spring by the Department of Health and Human Services to allocate early relief to providers based awards on revenue. This method resulted in lopsided relief that left hard-hit communities with large Black populations with insufficient funding to match the pandemic’s toll, researchers found.

In the latest coronavirus aid package, Congress said most federal relief must be used to reimburse providers who apply to be paid back for lost revenue or higher expenses. An earlier draft of the bill instead directed HHS to consider providers at risk of closing and those underrepresented in early relief payouts, according to hospital trade groups.

Targeting revenue losses fails to take into account that some hospitals earn more revenue because they charge high prices to largely well-insured patients, while others with patients who struggle to get care take in less revenue, said researchers who analyzed early pandemic relief and health policy and economists not involved in the study.

“You can’t lose what you never had,” said Michael Norby, chief financial officer for Houston-based Harris Health System, where slightly more than half of patients are uninsured.

Prior research shows health-care revenue better reflects patients’ access to care, not their medical needs, said health-policy experts. “It’s pretty obvious,” said Loren Adler, an economist with the USC-Brookings Schaeffer Initiative for Health Policy, who wasn’t involved in the recent analysis of federal pandemic health-care relief.

#g-CARES2-box.ai2html_export { max-width: 300px; width:100%; margin: 0 auto; } .g-aiImg { margin-top: -1.2px; } .g-_valign { margin-top: -2px; } div[class^=”g-_textoutline-white”] { text-shadow: -1px -1px 0 #fff, 1px -1px 0 #fff, -1px 1px 0 #fff, 1px 1px 0 #fff; } div[class^=”g-_textshadow-white”] { text-shadow: 1px 1px 2px #fff; } div[class^=”g-_textoutline-black”] { text-shadow: -1px -1px 0 #000, 1px -1px 0 #000, -1px 1px 0 #000, 1px 1px 0 #000; } div[class^=”g-_textshadow-black”] { text-shadow: 1px 1px 2px #000; } div[class^=”g-_textoutline-grey”] { text-shadow: -1px -1px 0 #dddddd, 1px -1px 0 #dddddd, -1px 1px 0 #dddddd, 1px 1px 0 #dddddd; } div[class^=”g-_textshadow-grey”] { text-shadow: 1px 1px 2px #dddddd; } #g-CARES2-box .g-artboard { margin:0 auto; } #g-CARES2-box p { margin:0; } .g-aiAbs { position:absolute; } .g-aiImg { display:block; width:100% !important; } .g-aiSymbol { position: absolute; box-sizing: border-box; } .g-aiPointText p { white-space: nowrap; } #g-CARES2-box tspan { position:relative; overflow:hidden; } #g-CARES2-box tspan p { font-family:Retina,Helvetica,Arial,sans-serif; font-weight:300; font-size:15px; line-height:20px; height:auto; filter:alpha(opacity=100); -ms-filter:progid:DXImageTransform.Microsoft.Alpha(Opacity=100); opacity:1; letter-spacing:0em; text-align:left; color:rgb(51.0000007599592,51.0000007599592,51.0000007599592); text-transform:none; padding-bottom:0; padding-top:0; mix-blend-mode:normal; font-style:normal; position:static; } #g-CARES2-box tspan .g-pstyle0 { font-weight:500; font-size:18px; } #g-CARES2-box tspan .g-pstyle1 { height:20px; } #g-CARES2-box tspan .g-pstyle2 { line-height:18px; height:18px; } #g-CARES2-box tspan .g-pstyle3 { font-family:”Retina Narrow”,Helvetica,Arial,sans-serif; font-size:13px; line-height:16px; height:16px; text-align:right; } #g-CARES2-box tspan .g-pstyle4 { font-weight:500; font-size:12px; line-height:14px; height:14px; text-align:center; color:rgb(50.0000008195639,50.0000008195639,50.0000008195639); } #g-CARES2-box tspan .g-pstyle5 { font-size:13px; line-height:17px; color:rgb(114.000000804663,114.000000804663,114.000000804663); } #g-CARES2-_300px { position:relative; overflow:hidden; } #g-CARES2-_300px p { font-family:Retina,Helvetica,Arial,sans-serif; font-weight:300; font-size:15px; line-height:18px; height:auto; filter:alpha(opacity=100); -ms-filter:progid:DXImageTransform.Microsoft.Alpha(Opacity=100); opacity:1; letter-spacing:0em; text-align:left; color:rgb(51.0000007599592,51.0000007599592,51.0000007599592); text-transform:none; padding-bottom:0; padding-top:0; mix-blend-mode:normal; font-style:normal; position:static; } #g-CARES2-_300px .g-pstyle0 { height:18px; } #g-CARES2-_300px .g-pstyle1 { font-family:”Retina Narrow”,Helvetica,Arial,sans-serif; font-size:13px; line-height:16px; height:16px; text-align:right; } #g-CARES2-_300px .g-pstyle2 { font-weight:500; font-size:12px; line-height:14px; height:14px; text-align:center; color:rgb(50.0000008195639,50.0000008195639,50.0000008195639); }

Higher Risk

Counties with greater numbers of Black
residents had higher rates of disease that
increase Covid-19 risks, including
hypertension, than other counties that got
equal pandemic health-care relief funding.

Counties with the highest share of

Black residents*

Counties with the lowest share*

PREVALENCE OF HYPERTENSION†

CARES ACT FUNDS PER RESIDENT

In an analysis published in August in the Journal of the American Medical Association, researchers found that coronavirus relief money wasn’t enough to match the needs of hard-hit communities with more Black residents. According to research they are more likely to face barriers to necessary care, such as insurance gaps or racial bias.

The pandemic is having an outsize impact on Black Americans, who are more likely to be hospitalized and die from the disease than whites, Centers for Disease Control and Prevention data show.

After factoring all announced spending through July 5, which totaled $120 billion, counties with the greatest share of Black residents received more funding overall, $506 per person, on average, versus $380 across remaining counties, the research said.

But when compared with largely white counties that got equal relief funds, counties with the largest share of Black residents had not only more Covid-19 deaths, but also more Covid-19 cases, more widespread chronic disease such as diabetes and hypertension that raise risks from the virus, and hospitals with less cash in reserve and worse margins.

“Even when we try to help the people most in need, while completely well-intentioned, we do manage to help them a little bit, but not as much as we ought to have,” said Amitabh Chandra, a Harvard University health-care economist and one of the study’s authors.

The initial revenue formula allowed HHS to distribute aid widely and quickly, an agency spokeswoman said. Federal officials considered other approaches, but they would have taken longer, she said. Subsequent payouts used more targeted approaches. The decision by Congress to call for revenue formulas in the new relief package endorses the agency’s approach, the spokeswoman said.

Results of the new study raise questions about how effectively federal aid is reaching communities with the greatest risks from Covid-19, said health-policy experts. Pandemic relief from Congress last spring largely targeted struggling businesses, including hospitals, said Sherry Glied, an economist and dean at New York University’s Robert F. Wagner Graduate School of Public Service.

“Does it make sense here? If you’re trying to save jobs in the hospital, sure. But if what you’re trying to do is improve health, not so much,” she said.

For some small rural hospitals, spring relief funds to shore-up finances proved critical. The nation’s smallest hospitals generally earn about 80% of their revenue from outpatient services, which were largely suspended for weeks early in the pandemic.

The only hospital in Starke County, Ind., closed many services when the state ordered a halt to nonessential care in April. Starke Hospital in Knox, Ind., lost millions in revenue, said spokeswoman Kelly Credit. Federal relief offset losses, covered Covid-19 costs and supported critical services, she said.

The county received roughly the same $600 to $700 in pandemic funding per person as Terrebonne Parish, La., although the needs weren’t similar.

The parish reported 54 deaths from Covid-19 for every 100,000 people between the beginning of February and the end of June, the researchers said. Black residents make up one-fifth of the population there. The figure was 13 deaths per 100,000 people in Starke County, where Black residents make up less than 1% of the population.

The pandemic delivered a “double whammy” to patients at the Teche Action Clinic in the Terrebonne Parish city of Houma, La., said physician Ronald Marts. Patients fear the new virus, but economic damage from the pandemic has also made it harder to seek care for chronic, debilitating conditions, he said.

Dwayne Clay, 53, continues to battle muscle weakness, pain and numbness after becoming ill from the coronavirus. Mr. Clay entered Ochsner Health’s Leonard J. Chabert Medical Center in April and remained there for 35 days.

His insurance won’t cover continued physical rehabilitation, he said. A truck driver before the pandemic, Mr. Clay has applied for disability. “I am having a hard time—financially, spiritually, medically and emotionally,” he said.

Write to Melanie Evans at [email protected]