Coronavirus (Covid-19) and government bailout money: U.S. hospital giant gives back cash as workers continue to call for more P.P.E.

Filed Under: Costs

As we wrote earlier this fall, workers at hospitals owned by HCA Healthcare, one of the largest for-profit healthcare companies in the United States, spent the summer protesting what they say are continued unsafe working conditions and inadequate pay during the pandemic.

HCA was part of a cohort of 20 big hospital chains that, the New York Times reported in May, got more than $5 billion in government bailout money in the early stages of the pandemic.

In October, the company said it would be giving back around $6 billion of funds given to the company as part of the federal Coronavirus Aid, Relief, and Economic Security (CARES)  Act – around $1.6 billion in grants, which were referenced in the Times report, as well as $4.4 billion in Medicare accelerated payments that the government included as part of the CARES Act.. The company credited its “conservative approach” to finances during the pandemic as helping it to “meet the operational and financial challenges this global health crisis was expected to present.” Hazen told investors that returning the money was the “socially responsible thing to do.”

It’s unusual for for-profit companies to turn down free money, so we took a closer look.

HCA Before and During The Pandemic

HCA Healthcare, founded as Hospital Corporation of America, owns 184 hospitals and around 2,000 surgery centers, emergency rooms, urgent care centers, clinics and other independent sites across the country (and some in the United Kingdom as well). HCA hospitals and clinics are located in 21 US states.

The company recorded  revenues of  $46.7 billion in 2019, up from $43.6 billion in 2018. Like many healthcare companies, the onset of the pandemic threw HCA into new circumstances. Reports revealed that admissions in HCA hospitals went down 30 percent in April, with steeper declines in surgery and emergency department visits.

In July, the company reported that its 2020 second-quarter profit was around $1.1 billion. As Axios calculated, this figure marks a 38 percent increase from the company’s Q2 profit in 2019. Fifty-five percent of the company’s revenue in the second quarter, the company told its investors, was a result of taxpayer bailouts.

Phil Mattera is the research director of Good Jobs First, which has been using SEC filings and data from government agencies to keep track of government bailout funds since the pandemic began as part of its Covid Stimulus Watch project. In a phone interview, Mattera pointed out that a chunk of the money HCA said it would be “returning” – around $4.4 billion – were actually accelerated payments from Medicare and not part of the grants given by the government.

For its database, Good Jobs First “treats [accelerated Medicare payments] as in effect, a loan rather than a grant,” Mattera said. “It’s theoretically money that [HCA] would be already getting, but they’re now getting it sooner.”

“We did receive the $4.4 billion in Medicare accelerated payments,” an HCA spokesperson said in an email. “The process of returning, or repaying early, the $6 billion in CARES Act funds is underway and we are working with the applicable agencies to complete that as soon as possible.” The company did not provide further details on where the remaining $1.6 billion in actual grant money from the CARES Act had been distributed or its timeline for returning that grant money to agencies.

HCA is not the only company to make announcements that it was giving back funds. Good Jobs First has tracked companies across all sectors, from big name brands like Sweetgreen to small automotive companies, that have said they would refund their bailouts. As of November, government data shows that 14 hospitals had returned funds, including some owned by giant Kaiser Permanente, which issued a small press release of its own announcing its intention to give back funds. None of these hospitals reflected in the returns data thus far are owned by HCA.

Mattera points out that some other companies were quick to return money in the early stages of the pandemic after seeing the bad press that profitable name brands like Shake Shack and Ruth’s Chris faced for receiving funds. But he has no other insight as to why HCA would want to return its share of the bailout.

“I don’t know exactly if this is them varnishing their image or what exactly they’re doing,” he said.

WORKERS SAY THEY’RE UNSAFE – AND THE COMPANY ISN’T SPENDING ENOUGH

Workers at HCA facilities across the country have complained for months that the company has repeatedly failed to provide adequate PPE. In late October, six employees from six different HCA hospitals in California, Florida, Missouri, Texas, and Nevada wrote a letter to HCA’s investors alerting them to the issue.

Six months into the pandemic, the letter states, “HCA is still not consistently providing life-saving PPE, and in some cases is instead forcing caregivers to utilize less reliable masks or to risk cross contamination by re-using single use PPE for multiple shifts.”

After naming multiple HCA employees who have fallen ill with or died from Covid during the pandemic, the letter notes that the company’s Q2 financial statements show a 17 percent decrease in supply expenses from the same time period as last year.

“We are astonished at this,” the workers write:

We can tell you directly that we do not have enough N95 masks and other personal protective equipment…We think that the company’s financial statements show that they could increase their PPE purchasing. And we are concerned that the second quarter was so profitable in part because the company is not spending as much on PPE as it could. In other words, we worry that HCA’s short-term profits may be coming at the expense of essential frontline caregivers like ourselves and the health and safety of our patients, families and communities. We believe that this should be of concern (again) for all HCA stakeholders and may affect how you understand your fiduciary duty during the pandemic.

In response to inquiries about the employee letter, an HCA spokesperson sent a statement from the company regarding its PPE policies and blaming SEIU, the union that represents workers at HCA hospitals across the country, for “orchestrat[ing]” the letter “as part of their continued effort to attack hospitals.”

Our frontline caregivers have shown unwavering commitment, and our efforts to protect them have included the screening and testing of our colleagues, universal masking, contact tracing and notification, the assignment of a PPE steward at each hospital to ensure the proper use and fitting of protective equipment and other safeguards, in line with guidance from the CDC. As of the end of September, our spending for PPE increased by more than $140 million from the same period in 2019. From March through September, we have distributed more than 63 million pieces of PPE including isolation gowns, masks and N95s to protect our caregivers and patients. Additionally, HCA Healthcare implemented pandemic and quarantine pay programs to help protect the financial security of our colleagues, offered hoteling services to caregivers treating COVID-19 patients, and provided 24/7 counseling services for nurses in need of emotional and mental support.

HAVE YOU HAD EXPERIENCE WITH HCA?

Have you been treated recently at an HCA-owned hospital? Do you work for a hospital owned by the company? Reach out to us – we’d love to hear your story.