Study: Hospitals Made Profits During Covid, Counter To Industry Narrative
New research shows that operating margins rose during the pandemic in most hospitals studied, leading to questions if federal aid was too generous or misdirected. Meanwhile, hospitals are struggling to profit from CAR-T cancer drugs.
Axios:
Most Hospitals Profited Off Of Pandemic, Study Finds
COVID relief funds helped almost 75% of U.S. hospitals post positive operating income during the height of the pandemic, according to a new analysis that questions if the federal aid was too generous or misdirected. Why it matters: The findings counter the industry narrative that the pandemic left many facilities in the red and grappling with surging costs of care and supply chain and labor shortages. (Dreher, 7/20)
Also —
Stat:
Hospitals Struggle To Profit From CAR-T Drugs, But That May Change
Hospitals for years have complained that Medicare pays so little for CAR-T cancer treatments that they sometimes lose money administering the incredibly expensive treatments. But that could soon change: if drug companies succeed in making the cancer treatments safer, hospitals could provide them more often in outpatient departments, where payment is higher. CAR-T uses the body’s own immune system to kill cancerous cells. (Wilkerson, 7/20)
Modern Healthcare:
Hospital-At-Home Care Could Pose Challenges For Larger Health Systems
While health systems' margins dropped in 2022, most provider organizations are wrapping up the first half of 2023 on a more positive note. But analysts warn new threats to bottom lines may be on the horizon. “Margins have begun to recover, but they’re not where they were pre-pandemic,” said Matt Wolf, director and healthcare senior analyst at the consultancy RSM US. (Broderick, 7/19)
On diagnostic errors —
CNN:
Diagnostic Errors Linked To Nearly 800,000 Deaths Or Cases Of Permanent Disability In US Each Year, Study Estimates
Misdiagnosis of disease or other medical conditions leads to hundreds of thousands of deaths and permanent disabilities each year in the United States, according to a report published this week. About 371,000 people die and 424,000 sustain permanent disabilities – such as brain damage, blindness, loss of limbs or organs or metastasized cancer – each year as a result. (McPhillips, 7/19)
In other industry news —
St. Louis Post-Dispatch:
SLU Hospital Nurses Protest Short-Staffing, Call For Changes In New Union Contract
A group of St. Louis nurses protested Wednesday evening against what they described as chronic short-staffing at one of the area's largest hospitals. More than 50 people lined the sidewalk in front of SSM Health St. Louis University Hospital Wednesday evening, waving signs calling for changes. Multiple nurses described working in units that are primarily staffed by short-term contract nurses. (Merrilees, 7/19)
The Charlotte Observer:
StarMed Medical Practice Lays Off Workers And Closes Sites
Charlotte-based StarMed Healthcare is closing two of its three locations and laying off 15 to 20 workers as the independent medical practice consolidates operations to battle rising costs, its president said Wednesday. StarMed will no longer provide urgent care services but focus solely on primary care, President Michael Estramonte told The Charlotte Observer. (Marusak, 7/19)
The Boston Globe:
Tufts Medicine Has Limited Time To Improve Its Financial Picture
In a state dominated by health care giants, Tufts Medicine has struggled to compete. Amid operating losses, it announced the elimination of more than 200 positions earlier this year. Now, the system is asking the state for funding as it confronts some of its most serious financial challenges yet — an urgent need to improve its operations to avoid defaulting on an $800.8 million agreement with bond holders. If the system fails to meet required metrics by the end of September, bondholders could bring in a third party to restructure the health system, analysts say. (Bartlett, 7/19)
Modern Healthcare:
Elevance Health Profits Up In Second Quarter
Elevance Health exceeded Wall Street expectations for the second quarter as executives sought to reassure investors that medical costs do not remain higher than anticipated. The posture differs from rival UnitedHealth Group's announcement last week that pent-up demand for surgeries from Medicare Advantage members was dragging margins at its insurance and provider arms. Competitor Humana has also reported higher-than-expected Medicare Advantage utilization. (Tepper, 7/19)
Reuters:
Elevance Forecasts Strong 2023, Maintains Medical Cost Outlook
Elevance Health (ELV.N) said higher premiums and a limited hit from increased surgeries kept costs under control for the health insurer that on Wednesday raised its full-year profit forecast above estimates, sending its shares up 5%. The company kept its outlook for medical costs unchanged and reported a better-than expected second-quarter profit, despite a warning from industry bellwether UnitedHealth Group (UNH.N) last month that a spurt in non-urgent surgeries, especially among older patients, would push up costs. (Sunny and Mandowara, 7/19)
Reuters:
TPG To Buy Healthcare IT Platform Nextech For $1.4 Bln
TPG Inc (TPG.O) said on Wednesday it has agreed to buy healthcare IT platform Nextech for $1.4 billion to increase the private equity firm's presence in the healthcare services market. The deal gives TPG access to Nextech's network of over 11,000 physicians and more than 60,000 clinics, to which it provides services. (7/19)
Reuters:
Activist Investor Elliott Takes Big Stake In Drugmaker Catalent
Activist investor Elliott Investment has built a significant stake in Catalent (CTLT.N) and is pushing for a shake-up on the contract drug manufacturer's board, the Wall Street Journal reported on Wednesday. Elliott has been talking to potential director candidates about joining a slate of nominees to run in a proxy contest, WSJ said, citing people familiar with the matter. (7/20)
Modern Healthcare:
UnitedHealth's Optum Health Names Desai CEO
UnitedHealth Group has named Dr. Amar Desai CEO of Optum Health effective immediately, the insurance giant said Wednesday. Desai returns to Optum following a brief tenure as president of healthcare delivery at CVS Health, a position he took in October. Desai led Optum's Pacific West region before departing. (Hudson, 7/19)
