Financial Outcomes Associated With the COVID-19 Pandemic in California Hospitals

IMPORTANCE: The COVID-19 pandemic challenged the financial solvency of hospitals, yet there is limited evidence examining hospital financial performance through the first 15 months of the pandemic. OBJECTIVE: To assess the financial outcomes associated with the COVID-19 pandemic in California hospitals. DESIGN, SETTING, AND PARTICIPANTS: This cross-sectional study tracked the financial performance of 348 hospitals in California using Hospital Quarterly Financial and Utilization Data from the State of California Office of Statewide Health Planning and Development. Hospital financial performance was examined from January 2019 to June 2021 for all hospitals in aggregate and by safety-net status. EXPOSURES: Pre–COVID-19 financial outcomes vs COVID-19 period outcomes. MAIN OUTCOMES AND MEASURES: Quarterly revenues, expenses, and profits. RESULTS: In 348 California hospitals, hospital financial performance was highly variable during the COVID-19 pandemic. Losses were reduced by COVID-19 relief funding and strong equities market performance starting in the second quarter of 2020. Non–safety net hospitals maintained positive operating margins throughout the pandemic, while safety-net hospitals experienced large losses. Between the first quarter of 2020 and the second quarter of 2021, California safety-net hospitals’ net operating losses were more than $3.2 billion. CONCLUSIONS AND RELEVANCE: In this cross-sectional study of California hospitals, hospital financial performance was tracked between the first quarter of 2019 and the second quarter of 2021. Although hospitals experienced reduced profits between January 2020 and June 2021, the interventions of government assistance programs were able to mitigate more detrimental fiscal consequences. When compared with non–safety net hospitals, safety-net hospitals were confronted with more concentrated financial losses.