Sendhil Mullainathan Studies the Allocation of CARES Act Funding Across Hospitals in Counties with Different Racial Composition
The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 provided funding to hospitals to support pandemic-related expenses and to make up for lost revenue from non-COVID care that could not be delivered on account of the pandemic. Funds were allocated to health care facilities based on their prior revenue, their location, the insurance status of the population they typically serve, and their number of COVID-19 hospitalizations. NBER Researchers Amitabh Chandra of Harvard and Sendhil Mullainathan of the University of Chicago, along with Pragya Kakani of Harvard and Ziad Obermeyer of the University of California, Berkeley, studied the allocation of CARES Act funding across hospitals in counties with different racial composition. Their findings, published in JAMA, suggest that conditional on their level of funding, the COVID-related needs of hospitals in counties with a high share of Black residents were greater than those of hospitals in other counties. The disparities were greatest for counties with a high level of per capita CARES Act funding. In the video above, Mullainathan explains their findings and the source of this disparity -- Black patients typically receive less treatment, and therefore generate lower hospital revenues, for a given diagnosis.