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The Facts Behind COVID Dollars: Do Hospitals Make More?

If you create a system you’re going to have people who game it.

In the case of the Coronavirus pandemic, Congress passed legislation that boosts Medicaid and Medicare reimbursements by 20% on top of their standard fee schedules.

So you’ve probably heard the supposed rumor that hospitals make $13,000 for each COVID hospitalization and $39,000 for each intubation or ventilation.

While many groups have tried to dispel it as false to quell concern that COVID is being hyped for financial gain, here are the facts.

The average Medicare payment for respiratory infections with major complications or comorbidities (i.e. COVID), was $13,297 . . . in 2017 according to the Kaiser Family Foundation.

Assuming that fee hasn’t changed, although it has likely increased, on average, a hospital would receive $15,956 for each COVID admission.

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For ventilator support greater than 96 hours, the going rate in 2017 was $40,218.  With the Congressional boost, hospitals receive $48,261 for COVID patients who require ventilation for more than 96 hours.

The average COVID patient remains intubated for one to two weeks, some going through two intubation cycles, doubling the reimbursement rate.

FairHealth found in that the average charge of a COVID hospitalization of an uninsured person was $73,300 – and that matches the figures above if you factor in cardiac arrests and other complications that occur in a smaller percentage of patients.

According to the CDC, there have been over 2 million new COVID hospital admissions from March 31, 2020 until April 6th of this year with the majority of those being seniors over the age of 65 – and with Medicare covering the tab in most circumstances.

Assuming just 40% of those cases are Medicare covered, hospitals have been reimbursed about $58.6 billion from COVID hospitalizations and care by taxpayers.

The remaining 60% of patients would have cost an average of $38,221 per hospitalization for those privately insured, almost half the cost of what the government is paying.

U.S. Hospitals grossed $3.8 trillion in patient care in 2020, with COVID care generating a mere 2.7% of that revenue.

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While Congress definitely did incentivize COVID treatment and the extremes of intubation, it’s unlikely those profits drove decisions on patient care.

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