Many hospitals across the country suffered a financial blow from the COVID-19 pandemic, but some large healthcare systems were still profitable in 2020.
The pandemic resulted in lower patient volumes and higher spending for U.S. hospitals last year, and the financial damage could continue this year. The pandemic could cost hospitals between $ 53 billion and $ 122 billion in revenue in 2021, according to a recent study by healthcare consultancy Kaufman Hall commissioned by the American Hospital Association.
While many hospitals are struggling financially, several major healthcare systems that released financial results for the past year have reported net income of $ 1 billion or more. Their financial performance has been fueled by several factors, including higher returns on investment and tougher patients.
HCA Healthcare, a system of 185 hospitals based in Nashville, Tennessee, ended 2020 with a profit of $ 3.8 billion on revenue of $ 51.5 billion. The for-profit company posted fourth-quarter profit of $ 1.4 billion. Although admissions to the same hospitals were down year over year in the last quarter, the same facilities’ revenue per equivalent admission increased 14.1% in the fourth quarter of 2020 due to the increase in the acuity of patients treated and a favorable payroll mix, HCA said.
Several nonprofit healthcare systems that released their 2020 annual results also reported net income of $ 1 billion or more.
Kaiser Permanente, a 39-hospital system based in Oakland, Calif., Ended 2020 with a net profit of $ 6.4 billion on revenue of $ 88.7 billion. Kaiser’s integrated model – it provides healthcare and health plans – makes it difficult to compare its bottom line with those of other systems that don’t receive bonuses from members. As of December 30, Kaiser had 12.4 million health plan members.
Like Kaiser, the Pittsburgh-based UPMC has health insurance business. The 40-hospital health system recorded net income of $ 1.07 billion on revenues of $ 23.1 billion in 2020. The insurance services division of the system – the largest insurer in the west from Pennsylvania – increased 11 percent last year and has 4 million members. Insurance enrollment income totaled $ 11.4 billion in 2020, up from $ 9.9 billion a year earlier.