Oregon hospitals made it through the pandemic and turned a profit in 2020, but they would have lost money on day-to-day operations without federal aid from the CARES Act.
According to data released by the Oregon Health Authority this week, the state’s 64 hospitals ended 2020 with a combined $483 million surplus in operating revenue.
That includes money from providing patient care, cafeteria and gift sales and federal aid. Hospitals received about $620 million in CARES Act funds.
Two of Oregon’s hospitals are for-profit: McKenzie-Willamette Medical Center in Springfield and Willamette Valley Medical Center in McMinnville. The remainder are nonprofits.
State regulators said the data shows a promising financial recovery for health systems, while a hospital representative said their margins remain narrow and their recovery is less than certain.
Hospital system revenues plummeted last April, when fears of a surge in COVID-19 patients prompted a lockdown and statewide pause on elective health procedures.
Later in the year, however, hospitals experienced a rapid financial rebound as federal aid materialized and patients returned, state officials said.
“Over all this was a tough year for Oregonians and for health-care workers, who have been on the front lines and extremely stressed, but from a financial perspective, it appears the hospital systems fared OK throughout the year,” said Jeremy Vandehey, director of the Oregon Health Authority’s health policy and analytics division.
“We were very fortunate that the government stepped in,” said Becky Hultberg, president of Oregon Association of Hospitals and Health Systems.
Hultberg noted that the aggregate financial data hides differences in how hospitals performed. Some rural hospitals in particular struggled.
“One in three hospitals lost money in 2020, even including CARES Act funds,” Holtberg said.
Oregon’s hospitals performed better financially in 2020 if you consider the value of their investments in the stock market. Their cumulative total margin, which includes investment growth along with operating revenue, was $983,514,298 in 2020, just shy of $1 billion in profit.
A recent story in the Lund Report detailed how much hospitals investment portfolios have grown during the pandemic. Portfolio value gains have been far greater than the amounts hospitals received in CARES Act funding in many cases.
Hultberg said those investments serve a range of purposes: as a rainy day fund and to help hospitals maintain credit ratings and bonding capacity.
“Having those assets allows them to do things like build a new cancer center,” she said. “Absent those assets, they may not be able to borrow the money to do those things that are ultimately for the community.”