Bleak Future for Hospitals, Additional $120B Losses Predicted

Bleak Future for Hospitals, Additional $120B Losses Predicted

  • A June survey from the American Hospital Association paints a grim outlook for systems hoping to return to normal volumes anytime this year. The majority (67%) of respondents said they didn’t think they would achieve baseline volumes by the end of this year, while 30% reported the timeframe was “unknown” or that they “never” expected to return to baseline volumes.
  • The report looked at responses from AHA members at 1,360 hospitals across 48 states, and found that current inpatient volume is down 19.5%, while outpatient volume is down 34.5% relative to baseline levels.
  • The hospital lobby is urging Congress for more federal aid to support struggling systems, estimating an additional $120.5 billion in total financial losses from July 2020 through December 2020 if hospitals can’t reach baseline patient volumes until next summer, as expected


Despite some states lifting moratoriums on elective procedures and other rolled back stay-at-home orders, hospitals are still struggling to return to normal operations.


Patients continue to delay care for non-COVID-19 illnesses. At the same time, coronavirus surges in the South and West have hospitals dealing with additional costs for increased personal protective equipment, staff and bed capacity.


Hospital costs to treat COVID patients exceed expected reimbursement, which results in further financial losses, according to AHA.


The new report brings the total projected losses to hospitals and health systems in 2020 to at least $323.1 billion. The hospital lobby previously estimated $202.6 billion in losses for hospitals and health systems over the four-month period between March 2020 and June 2020.


That figure does not account for currently increasing case rates in some states or potential subsequent surges of the pandemic occurring later this year, AHA noted.


Other costs omitted from the analysis include: drug acquisition and shortage costs, wage and labor costs, uncompensated care costs, non-PPE medical supplies and equipment costs and capital costs from expanding testing and bed capacities.


Congress attempted to aid struggling providers this March through the $100 billion Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Paycheck Protection Program and Health Care Enhancement Act allocated an additional $75 billion. But the funds are intended for all healthcare providers and suppliers, not just hospitals.


AHA estimated that hospitals have received approximately $54.6 billion of the $102.6 billion in CARES Act relief funds that have been disbursed by HHS.


AHA said the current funds, some of which have yet to be distributed, “still pale in comparison to the losses that hospitals and health systems have already incurred and will continue to face through the end of 2020 and likely into 2021.” It said more financial support is “urgently needed.”

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