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Surprise: WSJ Uncovers 'COVID Spending' Scandal

AP Photo/Seth Wenig

One of the eternal truths of politics is that governments are generally very bad at allocating resources efficiently and effectively, especially under the auspices of "emergency." The bigger the government, the more true this reality generally tends to be. Even – or especially – when government intervention or spending is obviously called for, as was the case during the COVID pandemic, shoveling large sums of money out the door as quickly as possible will inevitably lead to the old cliched triumvirate of waste, fraud, and abuse. This recent emergency binge was no exception, witnessing waste, fraud and abuse on a mind-blowing scale.  

The Wall Street Journal has uncovered one example of this phenomenon, revealed in a new investigative report:

When Covid-19 struck, the U.S. government gave hospitals tens of billions of dollars to help them cope with the strains of the pandemic. Many of the hospitals didn’t need it. The aid enriched some well-off systems, while failing to meet the needs of many that were struggling, according to a Wall Street Journal analysis of federal financial-disclosure reports. The mismatch stemmed in part from the way the federal government determined how much a hospital should get. A main factor used to allocate relief was a hospital’s revenue, rather than Covid caseload or financial distress. The idea was that revenue was a good indicator of a hospital’s size. 

Among the recipients were large, wealthy hospital owners—including some nonprofits—that reported profits from patient care during the periods they got aid. Some were well off enough to put money into investment funds, while others spent on new facilities and expanded campuses. Hundreds of other hospitals that got federal funding, however, reported losses. Some were forced to lay off nurses and make other cuts, saying they didn’t get enough aid to overcome their strains. Some served areas that had among the highest Covid death rates. The revenue-based award system, especially prevalent in the early days of the pandemic, tended to favor hospitals with higher prices 

Some mistakes are unavoidable in an undertaking of this scope and magnitude, along a very accelerated timeline, but the Journal piece painstakingly reviews pieces of how "more than $175 billion in aid to a range of healthcare providers, including hospitals, doctors, dentists, clinics, nursing homes and other facilities," mostly within the window of a year-and-a-half stretch. Meanwhile in Florida – where the state government was remarkably effective in the aftermath of the devastation of Hurricane Ian this fall – Gov. Ron DeSantis has announced additional aid from Tallahassee to homeowners in need, after he said FEMA has declined some requests for assistance: 

Gov. Ron DeSantis announced in Southwest Florida, the region of landfall for Hurricane Ian, that Florida will pay $25 million of its own money for emergency relief in light of FEMA denying the state’s request. “Unfortunately, we got word last week that FEMA had denied our request for funding our state-led housing initiatives, citing their quote ‘limited authority.’ But we’re not just gonna sit there and take no for an answer,” he said. FEMA sent a Dec. 2 letter to the DeSantis Administration issuing denial for a request to expand the state’s housing recovery program: "Due to the limited authorities FEMA has to approve and pay for this type of work, as well as our inability to confirm that authorizing this policy expansion would achieve the intended outcomes for disaster survivors, your request is denied."

I suspect we haven't heard the last of this dispute. Relatedly, I'll leave you with this


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