Physicians' offices applied for PPP loans to help offset patient volumes that stopped. Photo: John Moore/Getty Images

Small hospitals, physician clinics, surgery centers, dental offices and other health care businesses were among the most common recipients of loans under the Paycheck Protection Program, according to data released by the federal government on Monday.

The big picture: Medical facilities had to halt routine procedures in the early days of the coronavirus pandemic as a way to prevent spread of infection and keep hospital beds open. PPP loans saved some, but certainly not all, of the jobs that are dependent on those routine procedures.

Between the lines: The health care industry is benefiting from two major sources of federal bailouts tied to the pandemic.

  • The main pot of money is $175 billion in no-strings-attached grants. A lot of those funds have flowed to large hospitals and medical providers that charge high prices.
  • Health care also is the largest recipient of PPP loans. Most of the loans have gone toward dentists, independent medical providers and rural hospitals that have not benefited as much from the main bailout funding.

The intrigue: Some health care organizations are dipping into both sources of money.

  • Sutter Health — a large hospital system in California that has $6 billion in cash and investments and is on the hook for a $575 million settlement tied to allegations of anticompetitive behavior — has received $205 million in federal bailout funds.
  • Two of Sutter's affiliated physician practices, Sutter East Bay Medical Group and Gould Medical Group, also each received at least $5 million in PPP loans, according to the new federal data.
  • A Sutter spokesperson said those groups are independent contractors whose finances "are wholly separate from those of Sutter Health."

The bottom line: Small medical providers say applying for PPP loans was an administrative nightmare, but the program still shuttled tens of billions of dollars into an industry that was forced to curtail patient visits.

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