Many health care companies doing just fine economically in the pandemic

Today's Managing Health Care Costs Number is  $1.35 billion

Sources below.  Note that the CARES Act payments to both of these publicly traded hospital companies helped prop up their earnings

Axios' Bob Herman writes:

The economy has been tanking. Coronavirus infections and deaths have been rising. And the health care industry is as rich as ever.

A friend and colleague sent this to me - and asked whether this was consistent with our piece published by Econofact: "The Paradox of Medical Costs During the Pandemic." How could the health care industry be doing well in the midst of all of this economic devastation?  And how does this fit with millions of workers laid off or furloughed from hospitals and ambulatory practices?

Here's how:

Providers

The two largest publicly traded hospital systems, HCAand Tenetreleased their 2nd quarter earnings this week. As you can see, the amount of CARES Act stimulus payments for each was huge. Tenet would have had a large loss without the CARES Act payment, and HCA would have had income (profit) of under a billion - a 40% decline from Q2 2019.

The hardest hit provider organizations, community practices and community hospitals, are largely nonprofit, and they don't report publicly. These parts of the medical ecosystem have taken a terrible hit, and many physicians will retire, many rural hospitals will close forever, and many ambulatory facilities will go under.

Insurers

Of course they had banner quarters! The large national insurers have mostly self-insured businesses, but they made substantial unexpected profits on any fully-insured business, and they had a lot fewer claims to process leading to lower administrative costs.

Pharmaceuticals

The dropoff in pharmacy spending is much less pronounced than for medical procedures, since people can get their drugs delivered by mail. In fact, in the first months of the pandemic there was likely some stockpiling.   The big upside for pharma, in addition to massive payments for vaccines and drugs for COVID-19, is that our focus has shifted from blaming them for high health care costs to revering them for their research and innovation that can get us out of this pandemic mess.  The outlook for continued high prices of specialty drugs and brand name drugs is improved. 

Medical costs will be down in 2020 - which is not inconsistent with improved profitability and share prices for many health care stakeholders.