Buoyed by Federal Covid Aid, Big Hospital Chains Buy Up Competitors

Billions of dollars in Covid aid cushioned financial losses caused by the pandemic at some of the nation’s largest hospital chains. But those bailouts also helped sustain the big chains’ spending sprees as they expanded even more by scooping up weakened competitors and doctors’ practices.

More consolidation by several major hospital systems enhanced their market prowess in many regions of the United States, even as rural hospitals and underserved communities were overwhelmed with Covid patients and struggled to stay afloat.

The buying spree is likely to prompt further debate and scrutiny of the Provider Relief Fund, a package of $178 billion in congressional aid that drew sharp criticism early on for allocating so much to the wealthiest hospital systems, and that had no limits on mergers and acquisitions.

The Biden administration is now weighing which hospitals and health providers will get the remaining $25 billion.

“It was not the intent to be a capital infusion to the largest and most financially stable providers to allow them to simply grow their slice of market share,” said Representative Katie Porter, Democrat of California. She is calling for hearings and for the Federal Trade Commission to review whether the funds were properly used for patient care and operations.

The hospitals say the Covid aid played no role in these deals, some of which were in the works before the pandemic. Major hospital chains argue that their size and reach helped them better care for patients, allowing them to divert supplies and people to hard-hit areas during the health crisis.