The Financial Impact of COVID-19 on California Hospitals: January 2020 Through June 2021

Glenn Melnick, Blue Cross of Calif. Chair in Health Care Finance; professor of public policy, Univ. of Southern Calif.
Susan Maerki, Independent Health Consultant


Downloads

In March 2020, most California acute care hospitals began postponing elective admissions and nonurgent care as the COVID-19 pandemic took hold. These developments had immediate impacts on California’s hospitals, with outpatient services and emergency department visits falling by approximately 50% over the next two months.

This report updates prior estimates of the impact of COVID-19 pandemic on utilization, costs, and revenue in 355 California acute care hospitals through the end of 2020.

The findings show that while patient volume in these California hospitals fell by 5% year over year, net patient revenue increased by $1.3 billion, largely driven by increased revenue from the Medi-Cal program.

After all revenues were totaled and expenses were deducted, California hospitals reported a substantial decrease in total net income in 2020 compared to 2019. Still, net income remained positive in 2020 at $3.47 billion compared to $7.96 billion in 2019.

The paper also demonstrates that Medi-Cal was the most important payer in stabilizing the financial status of many California hospitals during 2020. It provided an increase in patient services revenue of more than $2.8 billion, or 10% greater than 2019 levels.