North Carolina’s seven largest hospital systems reaped significant financial benefits last year, even as they received billions of dollars in federal aid during the pandemic, according to a report released Wednesday by the Treasurer’s Office. the state.
The State Employees Health Insurance Plan, overseen by Treasurer Dale Folwell’s agency, and the National Academy for State Health Policy reviewed hospital systems’ audited financial reports.
They found that the systems — Atrium Health, Cone Health, Duke Health, Novant Health, UNC Health, Vidant Health, and WakeMed — reported a combined net income of $5.2 billion in 2021. The seven nonprofit systems also saw their cash and investments increase by a cumulative amount. $7.1 billion from 2019 to 2021, according to the report.
The report, which was reviewed by a professor at the Johns Hopkins Bloomberg School of Public Health, said prosperity came when health plans accepted $1.5 billion in COVID-19 and 1 relief funds, $6 billion from Medicare to prepay for services during the pandemic.
Folwell, whose office has released two other reports since last fall criticizing large nonprofit hospitals for their financial and charitable care practices, said such federal aid was meant to help struggling hospitals and care for the patients in need.
“While wealthy systems gobbled up the lion’s share of COVID relief dollars among North Carolina hospitals, rural and underprivileged hospitals starved,” the report said.
Folwell, a Republican first elected in 2016, said the seven hospital systems should return taxpayer-funded federal dollars or reduce rising hospital costs for patients.
The seven health systems represent more than 80 hospitals in the state, according to the North Carolina Healthcare Association, which represents for-profit and nonprofit hospitals.
The association said in a written statement that the report “falsely demonizes health systems for requesting and using” COVID-19 relief funds for medical providers, and “conveniently forgets” that hospitals were facing an “unknown virus” in 2020. Hospital systems haven’t received additional money for expenses and lost revenue related to delta and omicron variants, which have increased COVID-19 hospitalizations.
“Selecting financial data and then formatting it does not reflect the many immense struggles and challenges facing the hospital field,” the statement said.
Folwell also supports pending legislation that would require North Carolina hospitals to provide minimum levels of free or reduced-cost care to low- and middle-income residents not covered by insurance.
“You should care about the massive transfer of wealth that’s happening in this state from citizens to these multi-billion dollar nonprofits,” he told a news conference. The state health plan covers nearly 750,000 teachers, state employees, retirees, and their dependents, making it a major user of state hospital services.
Wednesday’s speakers focused heavily on Charlotte-based Atrium Health, which the report said has received more than $1 billion in COVID-19 relief and Medicare advance payments. Atrium made a net profit of $1.2 billion in 2021, according to the report.
Atrium Health spokesman Dan Fogleman told The News & Observer of Raleigh that the funds received by the system only covered a fraction of what it had lost due to the pandemic.
The funds helped pay for many needed services, he said, including vaccinations and mass testing for COVID-19, as well as personal protective equipment and ventilators. They also helped Atrium avoid layoffs and keep rural hospitals in their system open, according to Fogleman.
“It is troubling that health systems like Atrium Health are under attack while we are still caring for communities recovering from the pandemic,” he said.