HCA (one of the nation’s largest hospital chains), has decided to pay back six billion dollars in federal pandemic aid, offering the company some financial flexibility it had lost when it took the infusion of cash, according to its executives. On Thursday, they said they would return the roughly estimated $1.6 billion it received in direct relief from the government, and repay its relief loans, causing them to be $4.4 billion ahead of schedule because they felt that it was “appropriate and the socially responsible thing to do.” The company’s finance chief told analysts through a call that the repayment would allow HCA to reconsider moves it made in the spring to conserve some cash.
Under relief packages this spring, including the Coronavirus Aid Relief, and Economic Security Act, Congress approved $175 billion in direct aid for health-care providers and offered pandemic relief loans, which hospitals will eventually have to repay sometime in the future. Hospital revenue plunged with pandemic preparations that prolonged some surgeries in order to prepare for Covid-19 patients. Surprisingly, HCA and other hospital chains rebounded more quickly than expected from spring losses making them move to restart elective procedures in late April and early May. The company pretty much adjusted its protocols and tracked local rates of positive Covid-19 tests, hospital occupancy and scheduled procedures to decide when to postpone some surgeries. Mr. Hazen said “We didn’t want every hospital trying to figure it out on their own.”
HCA reported that it has started to resume some corporate investments in surgery centers and freestanding emergency rooms, after it sharply curtailed its financial plans for this coming spring which did include suspending dividends and share buybacks. Although, Some hospitals did face pressure from existing lenders to hold off on assets or dividends until federal loans were repaid. The move to return the relief aid is the latest by HCA to reverse or scale back cash-conserving measures from earlier in the year, showing that one trillion dollar hospital sector is starting to recover from the pandemic’s heavy hit, but it hasn’t fully bounced back, even with relief.