April 27, 2022

CA hospitals lost some $20 billion during pandemic

By: Tarsilla Moura
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Editor's Note

According to a Kaufman Hall study, titled "Analysis: California Hospitals Endured Significant Financial Strain in 2021," published on April 19, and commissioned by the California Hospital Association, California hospitals collectively lost nearly $6 billion, “roughly three times the $2.2 billion that had been projected,” in 2021 and $14 billion in 2020, HealthLeaders April 27 reports.

Here are other takeaways from the study:

  • 51% of the state's hospitals are operating in the red (compared to 40% pre-pandemic)
  • total costs rose 15% in 2021 (outpacing the 11% national average)
  • cost increases were largely driven by higher labor costs and medical supply chain shortages
  • California hospital margins were 26% lower on average than before the pandemic.

The study also found that “hospitals took care of fewer patients in 2021 than pre-pandemic,” and those hospitalized “were sicker and required longer hospital stays,” HealthLeaders noted. “Because hospitals are commonly paid a fixed amount per admission, fewer admissions and longer lengths of stay create additional financial pressures for hospitals.”

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