Picture Of Health

Children’s Hospitals Were Healthy Heading Into COVID Pandemic

Children’s hospitals have suffered financially during the COVID-19 crisis, but they were generally in a stronger financial position than adult facilities before the pandemic.

In California, the aggregate operating profit margin of children’s hospitals was more than double that of non-children’s facilities last year, though individual results ranged widely from very healthy margins for Rady Children’s Hospital-San Diego and Children’s Hospital of Orange County to operating losses for UCSF Benioff’s Oakland hospital, Lucile Packard and Loma Linda, according to the Office of Statewide Health Planning and Development.

Nationally, the aggregate operating margin of not-for-profit children’s hospitals was nearly triple that of nonprofit adult hospitals, and the pediatric facilities had enough cash on hand to last 1.6 times longer than their adult counterparts, according to a 2019 report by Fitch Ratings that was based on 2018 hospital audits.

Analysts say children’s hospitals typically benefit from strong philanthropic and public support, and their specialization in complex acute cases results in higher prices while often affording them a commanding pediatric market share.

Since March, however, children’s hospitals have seen patient volumes decline and revenues plunge as they’ve suspended nonemergency surgeries and emptied beds to serve as backups to their adult counterparts for coronavirus surges — which, in many cases, have not materialized.

For more, read “The Pandemic Is Hurting Pediatric Hospitals, Too.