Report Documents COVID Strain On Hospitals In Early 2022

DATE: July 5, 2022

Restricted during the Omicron wave of COVID-19 at the beginning of the year, hospitals continued to show signs of financial distress two years into the pandemic with the latest data from the state showing that health care systems operated at a median margin of negative 2.5 percent during the first three months of 2022.

The newest report from the Center for Health Information and Analysis found that as of March 31 seven hospital health systems were profitable and reported a positive margin, while 15 systems had negative total margins. That's down from 19 systems operating in the black in the first quarter of 2021 and four systems reporting negative total margins.

"It's clear that Massachusetts healthcare organizations are feeling the economic crush of this public health crisis more than ever," said Dan McHale, the vice president for health care finance and policy at the Massachusetts Health and Hospital Association. "Inflation has added an entirely new layer to health care organizations' financial pressures in 2022."

The CHIA report released last week covers the peak of the Omicron wave in early 2022 when hospitals were required to pause at least 50 percent of elective surgeries. MHA said expenses remained high for pandemic-related costs, including temporary staffing. CHIA reported that acute hospital profitability was negative 3.1 percent, a decrease of 6.8 percentage points from the prior year, and 35 of the 61 hospitals reported negative total margins, compared to 15 of the 49 reporting hospitals during the last quarter of 2021. Teaching hospitals reported the lowest operating margin of negative 4.6 percent. A total operating revenue increase of $1.3 billion was offset by $1.8 billion in increased expenses, according to the report. The revenue picture includes $229 million in COVID-19 relief funds, up from $209 million during the same period in 2021.

By Matt Murphy / SHNS / July 5, 2022