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Jump to All Downloads & LinksIn 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.
Authors & Contributors
Glenn Melnick
Glenn Melnick, PhD, is an expert in health economics and finance. He joined the USC Price School of Public Policy faculty in 1996 and currently holds the Blue Cross of California Chair in Health Care Finance. Previously, he served as a faculty member of the UCLA School of Public Health, a consultant at RAND, and an expert witness for the Federal Trade Commission. He has been published in American Journal of Public Health; Health Affairs; Medical Care; Journal of Health Politics, Policy and Law; Health Policy Reform: Competition and Controls; and the Journal of Ambulatory Care Management. He has also been principal investigator for a number of funded projects in Jakarta, Indonesia, and in Taiwan.
Susan Maerki
Susan Maerki, MHSA, MAE, is an independent consultant. Previously, Maerki was a director and health policy specialist at PricewaterhouseCoopers (PwC) where her clients included state Medicaid agencies, health care foundations, health care professional organizations, commercial insurers, and state policy agencies, such as state departments of insurance and Covered California, the individual health benefit exchange.
