It's hard to overstate how uneven the access to critical test kits remains in the nation's largest state.

This article was first published on Monday, May 4, 2020 in Kaiser Health News.

By Anna Maria Barry-Jester and Angela Hart and Rachel Bluth

Months into the spread of the coronavirus in the United States, widespread diagnostic testing still isn't available, and California offers a sobering view of the dysfunction blocking the way.

It's hard to overstate how uneven the access to critical test kits remains in the nation's largest state. Even as some Southern California counties are opening drive-thru sites to make testing available to any resident who wants it, a rural northern county is testing raw sewage to determine whether the coronavirus has infiltrated its communities.

County to county, city to city — even hospital to hospital within a city — testing capacity varies widely, as does the definition of who qualifies for testing.

Testing deserts, stemming from an overwhelmed supply chain and a disjointed public health system, have hit hardest in California's rural north and in lower-income urban neighborhoods with concentrations of residents who already were struggling to get quality medical care. In the absence of a coordinated federal response, local health departments, hospitals and commercial labs across the state have been competing for the same scarce materials. Whether they are "haves" — or have-nots — is determined largely by how deep their pockets are, their connections to suppliers and how the state is allocating emergency supplies.

Compounding these problems is the lack of a state or federal public health infrastructure empowered to acquire and allocate resources on a grand and equitable scale. Hospitals and health systems where many people go for care are, by design, set up to focus resources on their own patients and workers. Their bureaucracies can't readily adapt to do the community outreach and education that could bring testing to the masses; nor are they set up to do the contact tracing that ensures that people who have been exposed to COVID-19 patients are tested and monitored.

Those roles typically fall to county health departments, which in much of California operate on bare-bones budgets that make it a struggle to contain perennial STD outbreaks, let alone a deadly pandemic.

Over the past two months, the state has triaged one testing disaster after another, but it is finally making headway on making tests more widely available, in part by cutting its own deals for supplies and expanding testing sites in underserved areas, said Dr. Bob Kocher, one of three people on a testing task force convened by California Gov. Gavin Newsom.

But conversations with dozens of local health officials, hospital systems, scientists and elected officials reveal just how complicated a task it will be.

Take Lake County, a recreational mecca just over two hours north of San Francisco. With 65,000 residents, it has had so few testing supplies that officials have resorted to buying swabs on Amazon and pilfering chlamydia testing kits for swabs and the liquid used to transport specimens to labs. Through what the county has cobbled together, it has identified six cases of COVID-19, all found via nurses or volunteers who have gone out looking for patients. "We're basically having to do tea leaves to figure out what's going on," said Dr. Gary Pace, the county's health officer.

He knows the county has community transmission, both from the cases they've identified and because they've started running tests on raw sewage to check for the COVID-19 virus; samples from four treatment plants have come back positive. "It is a way to just get more information because we can't do testing," he said. Unlike the diagnostic kits — which make use of supplies every health department in the country is competing for — the sewage sampling is done pro bono by a technology startup.

While announcing an ambitious program to increase testing last week, Newsom highlighted the rural-urban divide. "One of the big struggles we have had in the last few weeks of this pandemic is getting to rural and remote parts of this state and getting up testing sites and making them available," he said.

Newsom is promising to dramatically increase the level of coronavirus testing, with a focus on rural towns and communities of color. California currently tests about 25,000 people a day but has a strategy to raise that to 60,000 to 80,000 per day. The state has opened the first of 86 pop-up testing sites targeted for areas in need. It is launching a program to train 10,000 workers to serve as temporary disease investigators who can do the contact tracing considered fundamental in stemming the spread of the virus.

Pace said he wrote the governor to ask for one of the pop-up sites. "Statewide, there's a situation where there's not enough testing, and if you're trying to demonstrate progress, the way you do that is numbers," he said. "We are interested in equity, though, and in my view, we need some horizontal coverage instead of just lots of numbers."

In Mendocino County, situated along California's rugged North Coast, officials expressed similar frustration. In late April, a health center on the Round Valley Indian Reservation got a rapid test machine made by Abbott Laboratories, distributed via the Indian Health Service. That same day, a tribal member came in feeling sick. That person tested positive for COVID-19, as did five family members. The county previously had identified just five cases, all linked to travel.

Dr. Noemi Doohan, the Mendocino County public health officer, fears a broader outbreak among the six tribes who live on the reservation. The state since has provided 2,000 test kits for people who live or work around the reservation. Doohan's office will have to hire couriers to drive 2½ hours to a public lab in Sonoma County, which also has limited supplies, to get them processed.

It's Every Lab — And County — For Itself

A mix of commercial and public labs are responsible for testing in California, and supply chain limitations have plagued them all. But those with deeper pockets and stronger commercial relationships have been out-competing counties and public labs with limited resources.

Rural Tulare County, spanning the peaks and foothills of the Sierra Nevada, is home to half a million people. It also has one of the highest per capita death counts of COVID-19 in California. Until recently, the local public lab was the only place in the county that could test for the disease. After borrowing staff from another county, buying additional machines, and suspending testing for most other diseases, they are now able to process 85 tests a day. Officials also can send specimens to commercial labs in other parts of the state, but say days-long turnarounds create bottlenecks for tracking patients and finding contacts.

Monterey County, in the heart of the state's "salad bowl" coastal farming region, has relied on donations — and horse-trading — to meet demand. A local hospital found the expensive materials needed to make a missing reagent and mixed a batch for the public lab, said lab director Donna Ferguson. The hospital also gave the county 1,000 swabs, which Ferguson used to barter with Riverside County for extraction kits.

And through the kindness of strangers, she found a stopgap for limits on another important resource: lab workers.

During an interview with a local public radio station in March, Ferguson mused that if one of the three microbiologists working in her lab got sick, it could be disastrous for the county's ability to process tests. The next day, she got a call from a graduate student at Stanford's nearby Hopkins Marine Station. He'd heard the interview. Could he and his colleagues help? The crew of six graduate students from three universities has been volunteering at the lab since, tripling its capacity to 120 tests a day.

Though the supply chain is a concern for labs of all sizes, manufacturers appear to be prioritizing orders from commercial labs and big health systems over public health labs, said Eric Blanks, chief program officer for the Association of Public Health Laboratories, which represents most of the labs run by public health departments in the nation.

Quest Diagnostics, the medical testing giant headquartered in New Jersey, is running 350,000 coronavirus tests a week in its facilities around the nation. But it is being inundated with samples from across the country, and even as it has worked to ease backlogs, counties and private hospitals are waiting days for results.

Kaiser Permanente says it can test 2,000 to 2,500 people throughout the state each week. Sutter Health, a major provider in Northern California, tests around 650 people each day across its hospitals. CommonSpirit Health, which includes Dignity Health hospitals, says it could process 50,000 samples a week if it had to. As of last week, Stanford had run more than 20,000 tests for Bay Area residents. (Kaiser Health News, which produces California Healthline, is not affiliated with Kaiser Permanente.)

But even the giants don't have unlimited supplies. "It really is the manufacturing lines. They're the ones that right now are the limiting factor," said Karen Smith, system vice president of laboratory services at CommonSpirit Health.

Moreover, hospitals are not set up to solve the broader issue of statewide disparities in access. They can generally handle the patients sick enough to seek out their ERs. But it hasn't historically been their role to arrange community-wide supplies and testing.

"You're not going to go to an emergency room if you're asymptomatic. That's the last place in the world you want to be right now," said Dr. Omid Bakhtar, medical director for outreach laboratory services at Sharp HealthCare in San Diego. "It's frustrating for me. I have the ability to do more [specimens], but how do I get them?"

Tests But No Takers

In pockets around the state, some counties have been able to stabilize their flow of supplies, in some cases because they have more financial means, in others because of their relationships with major hospital systems and research institutions.

With more confidence in their supply chains, Los Angeles and Riverside counties say they are ready to offer testing to any resident. Several other counties, including much of the Bay Area, are asking more people, including workers deemed essential without COVID symptoms, to get tested.

But some counties that have managed to ramp up testing are wrestling with yet another problem: not enough people to test. The reasons are twofold. After weeks of being told they shouldn't go for testing because of shortages, the public seems to be adhering to that message even now that more testing is available. And the public health workforce tasked with locating those in need of testing is depleted.

San Francisco can test 4,300 people each day in its publicly supported labs but was receiving just 500 samples a day as of late April. Los Angeles is testing roughly 10,000 people daily but says it needs to double that to lift the shelter-in-place orders. Its focus in coming weeks is to increase testing among the uninsured and those in at-risk living environments such as homeless encampments and skilled nursing facilities.

Health officials say part of the challenge is they aren't getting the word out to poorer residents and communities of color, even as those same groups are being hit harder by the virus in many cities. In San Francisco, for example, Latino residents make up 16% of the population but 25% of COVID-19 cases. In Los Angeles, black people are 9% of the county's population but represent 15% of the deaths from COVID-19 for which race and ethnicity data is available.

Kocher, of the state testing task force, acknowledged the state has more work to do. But, he argued, there's also a sufficient amount of testing capability available today, especially via high-capacity commercial labs where the state says the vast majority of specimens should be processed.

"Right now, we're concerned with not having enough samples collected," he said.

When officials do slowly begin to let people return to work and school, experts agree that cases will go up, creating even more need for labs, testing and contact tracers. Preparing for that future will require even more resources.

"We need money," said Santa Barbara County Health Officer Dr. Henning Ansorg. "Lots of money. Lots and lots of it."

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Anna Maria Barry-Jester: annab@kff.org, @annabarryjester

Angela Hart: ahart@kff.org, @ahartreports

Rachel Bluth: rbluth@kff.org, @RachelHBluth

Even before the pandemic, California faced a serious shortage of mental health professionals, especially in rural areas.

This article was first published on Friday, May 1, 2020 in Kaiser Health News.

By Lori Basheda

Jane Gunter, a nurse practitioner in Tuolumne County, California, has long wanted to specialize in mental health so she can treat patients who have anxiety, depression and more complicated mental illnesses.

Her county, a rural outpost in the Sierra Nevada foothills with a population of about 54,000, has only five psychiatrists — "a huge shortage," she said.

But Gunter, 56, wasn't about to quit her job at the Me-Wuk Indian Health Center in Tuolumne and relocate to some distant campus for two years to get certified as a psychiatric nurse practitioner.

Then, in February, she learned that the University of California was launching a new program to provide that certification online in just one year. She fired off her application, and last month she received an acceptance letter.

"Sometimes I think, 'What are you doing?'" Gunter said, referring to the online classes that will take over her nights and weekends once the program starts. "But I care about the community."

The online certification program, conducted jointly by the nursing schools at the University of California-San Francisco, UCLA and UC-Davis, was scheduled to start in the fall, but it has been postponed until January because the on-site clinical hours required as part of the training are not possible during the COVID-19 shutdown.

Despite the delay, the potential expansion of psychiatric care is opportune given the expected increase in mental health problems due to the social isolation and financial stress stemming from the pandemic.

The need for more mental health nurses is about to be bigger than ever, said E. Alison Holman, a health psychologist at UC-Irvine who studies emotional responses to collective trauma.

"We now have 30 million Americans who have lost their jobs, who have no income — and how are they going to pay rent? How are they going to buy food?" Holman said. "And then you have to stay home. This event is rolling out like a long, chronic stressor."

Even before the current crisis, California faced a serious shortage of mental health professionals, especially in rural areas. California's psychiatrists and psychologists are approaching retirement age in large numbers, and fewer medical students are choosing psychiatry.

A UCSF study projected that the state would have 41% fewer psychiatrists than needed by 2028. More than half of Californians with mental illness receive no treatment, according to a February 2019 report by the California Future Health Workforce Commission.

UC's online mental health nurse practitioner program is one of the solutions recommended by the commission, a statewide, multisector panel that created a master plan to address the Golden State's shortage of health care workers.

The program is expected to put 300 more mental health NPs into California communities, particularly rural ones, over the next five years. Applicants such as Gunter, who live in underserved rural areas, will be given priority in the hope that they will stay in their communities upon completion of the training, said Deborah Johnson, a UCSF nursing professor who is co-director of the program.

Forty spots are available for the class that begins in January, and not all have been filled yet, Johnson said. Applications are being accepted until June 1, and 65 additional spots will open in fall 2021 and each fall thereafter for three more years, she said.

The UC system received a $1.5 million grant from the California Health Care Foundation to develop, design and launch it. But tuition is expected to make it self-sustaining. (Kaiser Health News, which produces California Healthline, is an editorially independent publication of the foundation.)

Applicants for the new program must already be advanced practice nurses, which means they hold either a master's degree or doctorate in nursing. More than 27,000 NPs now practice in California, but only 1,200 are certified to treat psychiatric patients.

Three hundred more psychiatric NPs won't completely fill the growing mental health care need, but they are expected to treat nearly 400,000 patients over a five-year period.

Though the online program means working nurses won't have to leave their jobs and their lives to relocate, they will still face challenges.

For one thing, their certification will require 500 hours of supervised clinical training with patients in hospitals, jails or schools. And some applicants live in communities where such opportunities may not be available, which could require them to commute long distances to meet the requirement.

Another challenge is that, even after nurse practitioners are certified, state law requires they find a medical doctor to supervise them. Havilyn Kern, a school nurse in Nevada City, California, quit her job two years ago so she could spend three days a week at UCSF — 155 miles away — to train as a psychiatric nurse practitioner.

She graduates in June, so the new online program is too late for her. Kern, who plans to work in her own community, hopes she will find a psychiatrist in the Bay Area willing to tele-supervise her.

"It shouldn't have to be this way," said program co-director Johnson. "California is so archaic. It's the most restrictive state in the western portion of the country."

Twenty-eight states plus Washington, D.C., allow nurse practitioners to work autonomously. Santa Rosa Assembly member Jim Wood, a Democrat, has introduced a bill, AB-890, that would allow California NPs to practice without doctor supervision. It passed the Assembly in January and is pending in the Senate.

"If AB 890 passes, it will certainly help fill the loss of specialty physicians such as psychiatrists everywhere, including in underserved areas," Wood said.

But that's a big "if."

California's powerful doctors' lobby, which has repeatedly scuttled similar legislation, is aggressively fighting it again. They argue that letting NPs order tests and prescribe medications independently would "dilute care."

Doctors also have a financial incentive to keep things the way they are. It restricts competition, and they bill NPs between $5,000 and $15,000 a year to review their charts and prescriptions every few months, according to a report by the California Health Care Foundation and UCSF.

Johnson suggested it is time for a change.

"We are the workhorses," she said. "Oh, my God, there is so much need. This new program could not come at a more important time."

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Insurers say that while that falloff in claims for non-COVID care is offsetting for now many insurers' costs associated with the pandemic, the future is far more fraught.

This article was first published on Tuesday, April 28, 2020 in Kaiser Health News.

By Julie Appleby and Steven Findlay

As doctors and consumers are forced to put most nonemergency procedures on hold, many health insurers foresee strong profits.

So why is the industry looking to Congress for help?

Insurers say that while that falloff in claims for non-COVID care is offsetting for now many insurers' costs associated with the pandemic, the future is far more fraught.

Costs could remain modest or quickly outstrip savings. A recession could drive revenue down. Or the coronavirus could resurge next winter and spike treatment expenses.

All that uncertainty for the companies could trigger far higher premiums for consumers, if insurers hedge their bets. Then again, the current savings insurers are seeing — along with cautions from state regulators about pushing cost-sensitive customers away during an economic downturn — might result in minimal premium increases.

"Insurers are nervous, to be sure," said Michael Kreidler, Washington state's insurance commissioner. "But so far they are telling me they are in good shape. Coronavirus claims have not been that high — yet."

Backing that assessment was a report out last week by credit rating agency Moody's, which looked at a range of pandemic scenarios — from mild to severe — and concluded "U.S. health insurers will nonetheless remain profitable under the most likely scenarios."

Earlier this month, UnitedHealth Group CEO David Wichmann told analysts that cost reductions so far are outstripping expenses for COVID-19 and that revenue is up compared with the previous year. He expects — barring a worsening situation — the rest of the year's earnings to match projections. Other insurers, including Centene, Anthem, Humana and Cigna, are scheduled to release earnings reports this week.

If these results are repeated across the insurance industry, there will be pressure on insurers to hold down rate increases for next year and do more for policyholders, such as constrain the growth in deductibles and other out-of-pocket costs, said consumer advocates, regulators and policy experts.

"The last thing we need is insurers pricing their coverage unnecessarily high at a time like this," said Peter Lee, executive director of Covered California, the health insurance marketplace in that state for people who buy their own coverage because they don't get it through their job.

That prediction comes as tens of millions of Americans have lost their jobs — and often their health insurance.

Those thrown out of work may be able to stay on employer coverage through a federal law called COBRA, but it's expensive and workers have to foot the bill. Insurers and employers have asked Congress for relief legislation to fully cover COBRA costs.

Losing a job is also a qualifying event to enroll in an Affordable Care Act plan — and, again, the industry has asked lawmakers to temporarily boost subsidies to help enrollees pay their premiums. Some states that run their own ACA marketplaces have reopened enrollment to help the uninsured get coverage.

The industry also wants Congress to authorize temporary financial support to help cover insurers that face "extraordinary, unplanned costs in 2020 and 2021," according to a letter sent to lawmakers from America's Health Insurance Plans and the Blue Cross Blue Shield Association.

To help, some states are giving insurers more time this year to submit their planned premium rates for 2021 — based on their expected costs — hoping things may be clearer by summer. California, for instance, is giving insurers until July to draw up their estimates.

One fear is that insurance actuaries, when faced with an unknown risk like the coronavirus, will price higher than needed, said Lee.

Setting premiums for next year is a balancing act. Insurers that calculate incorrectly and go too low will lose profits and may have to dig into their cash reserves to pay claims. If they set rates too high, they may run afoul of a provision in the ACA that requires insurers to issue rebates to policyholders if they don't spend at least 80% of revenue on medical care.

And they don't estimate well even in normal years. Early data for 2019 coverage shows insurers may owe a record amount in rebates, which will be paid out this year.

Insurers are not talking about next year's premiums.

"We do not yet know the full scope, severity or duration of this outbreak. So we cannot know the ultimate cost of our members' medical treatment or how long the postponement of non-urgent care will continue," said Justine Handelman, senior vice president at the Blue Cross Blue Shield Association.

Early estimates, including a scary one from Covered California issued in late March, warned that costs associated with the coronavirus could drive premiums up 40% next year without federal help, based on initial models of the number of Americans who might fall seriously ill.

That report, though, did not take into account the effect of the sharp decline in elective care.

Thirty-one states have barred most elective surgeries, part of the effort by governors to promote social distancing to flatten the curve of the epidemic and to help prevent hospitals from being overwhelmed.

"The good news since we published that report is that it looks like efforts to flatten the curve are taking effect," said Lee, so costs are more likely to be in the median rather than high end of the range.

The cost to insurers "all depends on the severity" of the continuing pandemic, said Dean Ungar, a vice president and senior credit officer at Moody's. "On the lower side, the industry will do quite well, and also even in a more median scenario, especially when you factor in the offsetting benefit of delayed procedures."

Moody's estimates that deferred elective procedures may account for as much as 20% to 40% savings on medical costs per month for many insurers as long as elective procedures are barred or patients are unwilling to seek nonemergency care.

Even so, "I don't think the insurance industry as a whole has any intention of making money off this," Ungar said. "There will be rebates or other things to help. Partly that's the right thing to do and partly it's good business."

Former Cigna executive turned industry critic Wendell Potter disagreed. He tweeted earlier this month that UnitedHealth spent $1.7 billion during the first quarter to buy back its own stock — a move that helps the company. "In other words, they're thriving during a pandemic," Potter tweeted. Instead, he said, the insurer should plow that money into premium reductions or other help for policyholders.

For its part, UnitedHealth said it has waived patient cost sharing for COVID care — as have most other insurers — as well as accelerated payments for what it owes to doctors, and is helping provide loans to some clinics.

Some physician groups fear they are being left out, saying some of the savings seen by insurers and self-insured employers should be directed to those struggling after seeing their practices dry up as people avoid medical care or governors bar elective procedures.

"It's a huge hit," said Tom Banning, CEO and executive vice president of the Texas Academy of Family Physicians.

Lee agreed, warning that struggling front-line physicians, and especially family and primary care doctors, will need financial help.

"A bad outcome of all this will be if thousands of providers can't make it financially and their practices get bought up by hospitals or private entities — creating more consolidation in health care, which is already driving costs up," said Lee. "Lawmakers should be thinking about helping primary providers out."

Julie Appleby: jappleby@kff.org, @Julie_Appleby

Wealthy hospitals sitting on millions or even billions of dollars are in a competitive stampede against near-insolvent hospitals for the same limited pots of financial relief.

This article was first published on Tuesday, April 28, 2020 in Kaiser Health News.

By Jordan Rau

Inova Health System, with campuses in some of the wealthiest suburbs of Washington, D.C., and Truman Medical Centers, a safety-net hospital in downtown Kansas City, Missouri, have little in common. But, today, they are confronting the same financial plague: mass cancellations of nonessential surgeries that are their biggest moneymakers while bracing for an expensive onslaught of coronavirus patients.

Yet Truman has less than a month's worth of cash reserves to keep it afloat while Inova entered the outbreak with enough money to operate for at least 21 months, according to Inova's financial disclosure for 2019, before the stock market decline. At that time, Inova told its bondholders it had $3.1 billion in investments it could liquidate within three days. Tapping any of that may never be necessary because Inova also drew down its entire $238 million line of credit earlier this year to prepare for the pandemic.

"At the end of the day, not all hospitals are created equal," said Charlie Shields, Truman's president and CEO. "If you were sitting on a year of … cash on hand, that would not be as challenging, but most safety-net hospitals are south of 25 days, and we're probably around 10. How do you manage through that?"

But Dr. J. Stephen Jones, Inova's president and CEO, said, "Our finances are a mess at this point," with the system postponing non-urgent treatments and eliminating 427 administration and management positions.

"This is an existential threat to every health care organization, no matter how strong they come into it," said Jones, who cut his own salary by 25%.

As the coronavirus wreaks havoc with hospital finances, wealthy hospitals sitting on millions or even billions of dollars are in a competitive stampede against near-insolvent hospitals for the same limited pots of financial relief. Those include the $175 billion bailout fund Congress allotted for health care providers as part of two recent coronavirus packages and loans from private banks.

Certainly, even the richest hospitals are having their balance sheets despoiled by a triple punch: the stock market slump, the cost of preparation for coronavirus patients and the cessation of profitable surgeries, which is costing many hospitals half or more of their revenues. Inova, for instance, has spent $32 million to buy personal protective equipment and install negative air pressure systems in 200 hospital rooms, Jones said. (As of Monday morning, the system had 323 coronavirus patients.)

But unlike safety-net and smaller hospitals, many big health systems have the resources to stay afloat without financial assistance through the summer and beyond. Half of the 284 hospitals whose bonds Moody's Investors Service rated in 2018 had enough cash on hand to cover six months or more.

They also don't have to rely for survival on revenue from only treating patients. Before the stock market drop, 365 hospitals — about one of every 13 — reported an investment portfolio exceeding $100 million, according to a Kaiser Health News analysis of hospital cost reports from 2018 filed with Medicare. Together, those investments pumped $2.8 billion into those hospitals that year.

"A lot of the big hospitals have developed fortress balance sheets since the financial crisis" of 2008, said Chas Roades, co-founder and CEO of Gist Healthcare, a consulting firm. "The reflex is to protect the operation." But, he said, "if that's a rainy day fund, it's raining pretty hard right now."

The wealthier hospitals face sacrifices that other hospitals might envy, such as having to postpone ambitious building projects or adding to their already large investment portfolios. They are less concerned with running out of money than with depleting their cash reservoirs so much that their credit ratings would be downgraded, which could lead to higher borrowing costs.

"Most would prefer to have a line of credit than liquidate a stock holding," said Lisa Goldstein, an associate managing director at Moody's.

UCHealth, a 12-hospital nonprofit system in Colorado, has temporarily stopped contributing to its investments, which as of the end of last year totaled more than $544 million in cash and liquid investments and $4 billion in long-term investments, according to its financial disclosure report. Even before the pandemic, it had been stockpiling extra cash to build an 11-story tower at the University of Colorado Hospital in Denver that will cost $388 million, said Dan Rieber, UCHealth's chief financial officer. The system has enough liquidity to operate for more than 300 days without any new income and has obtained new lines of credit.

But when large health systems draw down those lines of credit, it makes it harder for smaller hospitals to get private aid because lenders may be tapped out, said Christopher Kerns, a vice president at Advisory Board, a health care consulting firm. "In our own discussions with lenders, there's only so much cash that's available, and that is putting the squeeze on the small or midsize organizations, and they are finding themselves very crushed," Kerns said.

The federal Health and Human Services Department has not made financial leeway assets a factor in deciding how it will distribute the $100 billion bailout fund passed in March. The department is doling out the first $30 billion based on how much each health care provider was paid by Medicare last year. The department plans to distribute the remaining money with an eye toward the prevalence of coronavirus infections in a hospital or region, and in the number of low-income and uninsured patients. The latest federal stimulus package — signed by President Donald Trump on Friday — added $75 billion to the relief fund.

"There isn't a mechanism right now to distinguish between the exceedingly well-endowed hospitals and those that are struggling," said Dan Mendelson, founder of the consulting company Avalere Health and a private equity investor.

The association representing safety-net hospitals, America's Essential Hospitals, has urged that cash reserves be a factor in divvying up the money, which is widely viewed as insufficient to cover all hospitals' costs. Some member hospitals have fewer than 10 days of cash reserves and run on average margins of 1.6%, a fifth of the industry average, according to the group.

"Our hospitals are struggling now to manage surging patient volume, staff and supply shortages, and other severe challenges as their limited cash reserves dwindle," Dr. Bruce Siegel, the association's president, said in a statement.

Certainly, even the wealthiest hospitals are seeing their robust balance sheets being turned upside down. Following the guidance of the federal government, UCHealth has postponed elective surgeries, leading to a drop in business of 50% to 60%. Elizabeth Concordia, UCHealth's CEO, said the system expects that it will not completely rebound even when the pandemic has diminished because many older people will be reluctant to return for elective surgeries for fear they might become infected with the coronavirus.

She said UCHealth is also on the front lines of fighting the pandemic. It currently has admitted 240 COVID-19 patients, more than any other Colorado hospital, and has been analyzing tests for rural hospitals without yet setting a contract for how much it will be reimbursed. It has also maintained its 25,000-person workforce without imposing pay reductions or furloughs.

"COVID is having a devastating impact on all of our finances," Concordia said.

But for those hospitals with their own wealth, investment earnings can provide a buffer that most hospitals don't have. In a forthcoming paper in the Journal of General Internal Medicine, researchers at the Johns Hopkins Bloomberg School of Public Health led by Ge Bai found that nearly all investment earnings for nonprofit hospitals were earned by just a quarter of the hospitals. Without that amount, their aggregate net income would have been 31% lower.

Investment income made up 5% of the total revenue for Trinity Health, a 92-hospital Catholic system based in Michigan and operating in 22 states, according to its financial disclosures to bondholders covering the last six months of 2019. Those investment earnings of $468 million accounted for 58% of Trinity's surplus.

As of December, Trinity had $9.6 billion in cash and investments, enough to operate for six months. It also reported credit lines totaling $1.2 billion. Trinity did not respond to requests for comment.

The wealthier hospital systems are strongly positioned to take full advantage of whatever method the government sets for distributing the remainder of the bailout funds. They employ more reimbursement staff and have in place sophisticated methods to document every expense that they can attribute to the coronavirus response, said Simone Rauscher Singh, an assistant professor at the University of Michigan School of Public Health.

"The big hospitals are ramping up their capacity to document all this so they can go back later and say, 'This is what we spent,'" she said. "The small hospitals are going to be in an even worse position to do that."

Jordan Rau: jrau@kff.org, @JordanRau