Florida's hospital systems remained profitable in 2020 despite pandemic, report says
A recent report shows that Florida’s hospitals remained profitable in 2020 despite enormous pressures created by the coronavirus pandemic.
In the Tampa-St. Petersburg region hospitals improved their profit margins from 8.8 percent in 2018 to 10 percent in 2020, according to the report. Hospitals in South Florida reported a net income of $1.59 billion, or 9.6% of net patient revenues in 2020, compared to 11.7% in 2019, the report said.
During this time, hospital systems faced higher expenses due to the pandemic and reduced revenues because they had to suspend lucrative elective surgeries for part of 2020. But many hospitals received federal funding and found other ways to overcome their revenue losses, said Allen Baumgarten, author of the Florida Health Market Review, which publishes revenue data on hospitals.
“They were able to offset some of the losses in revenue through the federal funding and also by furloughing, or laying off employees, and otherwise trying to cut expenses,” Baumgarten said.
The government sent billions to hospitals around the country through pandemic relief funding. It also expanded Medicaid eligibility, which provided health insurance to patients who needed hospital care.
Had it not been for the additional funding, Florida’s hospitals would have faced shortfalls, Baumgarten said.
The federal expansion of Medicaid coverage during the public health emergency meant more of the patients that hospitals cared for had insurance. However, that funding stream will end when the public health emergency is over. It is set to expire on April 16 unless officials extend it for another 90 days.
“When the public health emergency comes to an end, there are several hundred thousand Medicaid recipients who will probably lose their Medicaid coverage and revert to being uninsured,” Baumgarten said.
Among the state’s largest hospital systems, the report found:
- HCA, the largest hospital system in the state, had net income of $2.07 billion, or 23% of patient revenues.
- AdventHealth, the second largest system, had net income of $693.8 million or 9.8% of patient revenues.
- Baptist Health system had a net income of $246.3 million in 2020, compared to $142.8 million in 2018 and $465 million in 2019.
Baumgarten’s report also lists ways that hospital systems in the state are working to grow their profits and patient counts, including construction of new hospitals, outpatient centers and free-standing emergency departments.
HCA recently acquired the largest operator of urgent care centers in the state and plans to add new urgent care clinics in the future.
Hospitals have also been acquiring physician groups through vertical integration, which brings business to one hospital system, keeping revenues away from competitors.
“It’s a very competitive business," Baumbgarten said. "And all these systems, whether the public for profit, or nonprofit religious systems, are all competing very aggressively.”
But Florida policymakers should be paying close attention to the cost of health care in the state, he said.
As costs increase, he said Florida might become less appealing to national employers who are looking to expand.
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