CARES Act Funds May Have Helped Higher-Resource Hospitals More

Federal relief funds may have disproportionately benefited hospitals and health systems that were financially stronger prior to the COVID-19 pandemic, according to a cross-sectional study.

Among nearly 1,000 facilities, there was wide variation in CARES Act funding, with 24% of hospitals receiving less than $5 million, and 8% receiving more than $50 million, reported Christopher Whaley, PhD, of RAND Corporation in Santa Monica, California, and colleagues.

After adjusting for differences in patient composition and the total number of hospital discharges, a 10% increase in hospital assets prior to the pandemic was associated with a 1.4% (95% CI 0.8-2.0, P=0.003) increase in CARES Act funding, while pre-pandemic endowment size and eventual COVID-19 case counts were associated with increases of 0.2% (95% CI 0.1-0.3, P<0.001) and 3.5% (95% CI 2.8-4.2, P<0.001), respectively, they noted in JAMA Health Forum.

Whaley and team found that hospitals with higher shares of total revenue from Medicaid prior to the pandemic received more high-impact funding, while those with higher shares of total revenue from commercial payers received a smaller amount. Nonprofit hospitals received 13% more (95% CI 2.9-23, P=0.12) in CARES Act assistance, teaching hospitals received 42% more (95% CI 30-56, P<0.001), and critical access hospitals received 40% less (95% CI -61% to -19%, P<0.001).

“While more-resourced hospitals … did receive higher levels of CARES Act funding, the largest component of CARES Act funding distribution was the share of hospital revenue that occurs from Medicaid patients even though payments were distributed primarily based on Medicare revenues,” they noted.

“This disparity in funding may be of particular interest because many critical access and rural hospitals faced financial pressures even before the COVID-19 pandemic,” they added. “Policymakers should continue to ensure that these types of hospitals are sufficiently funded, potentially with additional rounds of funding.”

This cross-sectional analysis looked at 952 hospital-level entities from December 2020 through June 2021 to analyze CARES Act funding distributions for high-impact funds — those meant to help hospitals in areas hardest hit during the first wave of the pandemic. These hospitals received an average payment of $33.6 million, mostly during the first payment round.

The researchers used linear regression models linking hospital- and health system-level data on CARES Act funding with hospital characteristics information from Hospital Cost Reports.

Whaley and colleagues noted that the measures of funding covered only the initial stage of the pandemic, and that 8% of CARES Act funds were not included in the sample analyzed, which were limitations to their study. Furthermore, their analysis only focused on high-impact funds, not on other CARES Act funding provided to rural facilities ($11.1 billion) and safety-net hospitals ($13.1 billion), which may have benefited facilities with fewer financial resources.