By Richard M. Scheffler, Daniel R. Arnold, Surina Khurana, and Brent D. Fulton | Published July 9, 2020 | Link to Report
California Governor Gavin Newsom issued an executive order on March 19, 2020 that effectively prevented hospitals from performing elective procedures to free capacity for a possible surge of COVID-19 patients (order lifted on April 22, 2020). This report examines the financial status of the largest health systems in California, with a particular focus on their liquid assets for financial solvency. It then reports the amount they have received in CARES Act provider relief payments. Overall, 24% of the estimated reduction in net patient revenue was offset by direct CARES Act grants, but the offset varied widely by hospital. The report then presents the correlation between provider relief payments and a hospital’s private insurance share of patient revenue, operating margin, and the hospital market concentration of the county in which it resides. We find hospitals with a larger share of net patient revenue from private insurers and hospitals residing in highly concentrated hospital markets received larger payments per adjusted patient day. The results suggest that careful monitoring of future relief payments is needed.