Massachusetts hospitals experienced sharp declines in financial well-being at the onset of the pandemic, and many ended April and May in the red despite receiving a boost from federal stimulus money, according to a new analysis.
Several dozen hospitals that participated in a Center for Health Information and Analysis survey reported a median profitability of -28.9% in March, followed by CARES Act-boosted margins of -14.9% in April and -3.3% in March, the center said in a Thursday report.
Those negative margins compare to the median profitability margin of 3.4% that participating hospitals observed in a comparable pre-pandemic period, according to CHIA's analysis.
"The financial stability of hospitals and health systems has far reaching and long term implications for the Massachusetts health care delivery system and this report provides residents, stakeholders and policymakers with the first look at the financial toll the pandemic has taken on hospitals in the Commonwealth," CHIA Director Ray Campbell said.
Thirty-one of the 38 hospitals that submitted data to CHIA reported losses in April, while 21 of 38 reported losses in May. Academic medical centers and community-high public payer hospitals were among the only ones to observe positive margins in May.
While stimulus funding did not erase gaps, it made a difference: CHIA estimated that, among hospitals that responded, the median margins would have sunk to -53.5% in April and -26.1% in May without a combined $726 million in state and federal aid.
The health care industry faces major financial strain from the pandemic, particularly because elective procedures — which are often a key source of income for hospitals — were suspended for months to shift focus to pandemic response and limit transmission risks.
Operating revenues declined significantly in the first three months of the pandemic at most hospitals that reported data to CHIA, with a median drop of 23.2% in March, 22.7% in April and 16.7% in May.