Arizona Hospitals see Profits Soar due to COVID-19

By Consumers For Quality Care, on November 3, 2021

Arizona Hospitals see Profits Soar due to COVID-19

According to an Arizona Health Care Cost Containment System study reported by Arizona Capital Times, Arizona hospitals saw their total profits top $1.5 billion in 2020 – a 33% increase from 2019 – which can be attributed to the COVID-19 pandemic.

The pandemic placed a great burden on hospitals, resulting in patients both young and old seeking medical care for COVID-19. In a typical year, older patients on Medicare make up the majority of a hospital’s patients. However, younger patients with private insurance – which normally pays more than Medicare – sought unanticipated medical care, leading to an increase in overall profits for hospitals.

Hospitals also took advantage of federal subsidies that allowed hospitals to charge for a certain amount of care for all COVID-19 patients, such as ICU care, even for those who didn’t require intensive care. The subsidies also allowed hospitals to charge for COVID-19 care for a patient who tested positive for COVID-19 but was admitted to the hospital for a separate condition.

“[T]he hospital could still put that they have the COVID diagnosis and get the reimbursement,” said Marjorie Baldwin, a professor of economics at Arizona State University. “And there’s strong incentives for hospitals to do that.”

Hospitals should not use federal subsidies enacted during a pandemic as an excuse to increase charges and engage in toxic billing practices to boost their own profits. We must ensure that hospitals prioritize patients over profits.