Many hospitals across the country took a financial hit from the COVID-19 pandemic, but some large health systems were still profitable in 2020.
The pandemic resulted in lower patient volumes and higher expenses for U.S. hospitals last year, and the financial damage may continue this year. The pandemic could cause hospitals to lose between $53 billion and $122 billion in revenue in 2021, according to a recent study by healthcare consulting firm Kaufman Hall commissioned by the American Hospital Association.
While many hospitals face financial hardships, several large health systems that have released financial results for last year reported net income of $1 billion or more. Their financial performance was fueled by several factors, including higher investment returns and higher-acuity patients.
HCA Healthcare, a 185-hospital system based in Nashville, Tenn., ended 2020 with a profit of $3.8 billion on revenue of $51.5 billion. The for-profit company posted a $1.4 billion profit in the fourth quarter. Though same-hospital admissions declined year over year in the most recent quarter, same-facility revenue per equivalent admission increased 14.1 percent in the fourth quarter of 2020 due to increases in acuity of patients treated and favorable payer mix, HCA said.
Several nonprofit health systems that have released their full-year 2020 results also reported net income of $1 billion or more.
Kaiser Permanente, a 39-hospital system based in Oakland, Calif., ended 2020 with net income 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 financial results to those of other systems that do not receive member premiums. As of Dec. 30, Kaiser had 12.4 million health plan members.
Like Kaiser, Pittsburgh-based UPMC has a health insurance business. The 40-hospital health system recorded net income of $1.07 billion on revenue of $23.1 billion in 2020. The system's insurance services division — the largest insurer in western Pennsylvania — grew 11 percent last year and has 4 million members. Insurance enrollment revenue totaled $11.4 billion in 2020, compared to $9.9 billion a year earlier.