On Monday, it was revealed that the Department of Health and Human Services (HHS), which has distributed tens of billions of dollars to hospitals across the country in light of the coronavirus pandemic, has prioritized distributing relief to wealthy hospitals over those in rural areas that serve low-income patients. Jesse Drucker, Jessica Silver-Greenberg, and Sarah Kliff of The New York Times report,
"Twenty large recipients, including Providence [Health System in the Seattle area], have received a total of more than $5 billion in recent weeks, according to an analysis of federal data by Good Jobs First, a research group. Those hospital chains were already sitting on more than $108 billion in cash, according to regulatory filings and the bond-rating firms S&P Global and Fitch. A Providence spokeswoman said the grants helped make up for losses from the coronavirus.
"Those cash piles come from a mix of sources: no-strings-attached private donations, income from investments with hedge funds and private equity firms, and any profits from treating patients. Some chains, like Providence, also run their own venture capital firms to invest their cash in cutting-edge startups. The investment portfolios often generate billions of dollars in annual profits, dwarfing what the hospitals earn from serving patients.
"Many of these hospital groups, including Providence, are set up as nonprofits, which generally don’t have to pay federal taxes on their billions of dollars of income.
"By contrast, hospitals that serve low-income patients often have only enough cash on hand to finance a few weeks of their operations."
In addition, according to National Rural Hospital Association executive director Alan Morgan, about 20% rural hospitals across the country were at risk of closing before the coronavirus hit, and executives for these hospitals are not confident that they will get enough in federal aid to survive the pandemic. Given these statistics, why would the Trump Administration prioritize the wealthiest hospitals over those at risk of closing?
Well, following the March passage of the coronavirus stimulus package, representatives for the American Hospital Association, which lobbies on behalf of the country's largest hospitals, met with HHS Secretary Alex Azar. Lobbying firms representing the group have contributed to several leadership PACs that have, in turn, donated to President Trump this election cycle. For instance, Sen. Lindsey Graham's (R-SC) leadership PAC, Fund for America's Future, which has given $2,500 to Trump, has simultaneously taken an equal amount from Holland & Knight. Additionally, Rep. Michael Burgess's (R-TX) Lone Star Leadership PAC has accepted $2,000 from Alston & Bird, as the president has taken $10,000 from the leadership PAC. Meanwhile, lobbying firms representing the Carlyle Group -- which works with the aforementioned Providence hospital chain -- namely Kelley Drye & Warren and Steptoe & Johnson, have respectively contributed $2,000 to the Lone Star Leadership PAC and $1,000 to Sen. Rick Scott's (R-FL) Let's Get to Work PAC, the latter of which has given $4,450 to President Trump.
During the midst of the worst health crisis of most Americans' lifetimes, it is unfortunate that leaders are not prioritizing hospitals on the brink of collapse, instead prioritizing those that are already financially well-off, due, at least in part, to the money they receive. Sadly, this likely means that many more low-income, rural Americans will not have access to the hospitals they currently rely on, and there could not be a worse time for that to happen.
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