Any potential financial relief for nonprofit hospitals and health systems reporting major net losses in 2022 must take into account the outsized role negative investment returns had on their bottom lines, health economics experts wrote in a Health Affairs Forefront article published Friday.
“Wall Street losses should not impact private payers’ and taxpayers’ payments to hospitals,” the trio of researchers hailing from the RAND Corporation, Manhattan College and Johns Hopkins University wrote. “Asking these constituents to foot the bill for hospitals’ investment losses not only lacks justification but will insulate hospitals from the consequences of their investment decisions, motivating less fiscally responsible behavior in the future.”
To better characterize the oft-publicized financial losses of hospitals and health systems, the group reviewed 10 large nonprofit hospital systems’ second-quarter financial statements (the most recent available at the time of article submission), Fierce Healthcare reports.
All 10 of the hospital systems reported negative overall profit margins during the quarter, averaging a decline from 9% in 2021 to -6% in 2022, the researchers found. Read more.
