Dive Brief:
- Hospitals and health systems could lose anywhere from $53 billion to $122 billion in revenue this year, according to a new analysis from Kaufman Hall and the American Hospital Association.
- Following a COVID-19 surge over winter holidays, expenses were up considerably in 2020. For example, drug expenses per adjusted discharged increased 17% year over year, followed by labor expenses up 14% and supply expenses up 13%, according to the report.
- At the same time, resumption of other non-coronavirus services to recoup lost revenues from a widespread delay in care remains a challenge despite vaccine roll-outs. The hospital lobby is asking for an additional $35 billion to be included in the provider relief fund through Congress’ next relief bill.
Dive Insight:
While the findings don't entirely jibe with the profits recently posted by mega for-profit hospital operators like HCA Healthcare, Tenet and Community Health Systems, smaller and more regionally-based hospitals continue feeling financial strains from the pandemic.
The more optimistic forecast assumes hospitals will experience a sustained decline in coronavirus cases and a consistent and complete recovery in other patient volumes. A slower, more fragmented recovery of volumes coupled with delayed vaccine rollouts in the more dire forecast mean hospitals could lose over $100 billion in revenues in 2020.
Increased costs to continue caring for COVID-19 patients are particularly burdensome, especially higher labor expenses, hospital leaders said during a Wednesday call with reporters.
Traveling nurse rates have skyrocketed throughout the pandemic as supply and demand ebbed across different regions with varying infection rates.
At Tucson Medical Center, a community hospital in Arizona, nursing staff are costing "three times what they typically would cost us," Judy Rich, the hospital’s president, said on Wednesday's call.
While hospitals continue caring for COVID-19 patients, other services have been slow to pick back up. Patient reluctance is still a key factor, David Ramsey, CEO of Charleston Area Medical Center in West Virginia said during the call.
At the same time, "the resources that are being consumed by the COVID patient who is typically here for a week or more are significant," Ramsey said.
"Our hospital and hospitals across the country are struggling in a similar way, we're not receiving adequate reimbursement for COVID expenses," Ramsey said.
Hospital and AHA leaders said the cost to treat these patients is more than what Medicare and Medicaid are reimbursing, further straining their finances.
The hospital lobby is asking for an additional $35 billion to be included in the provider relief fund through Congress' next relief bill, Rick Pollack, AHA president and CEO, said on the call.
President Joe Biden's $1.9 trillion relief bill still awaits a House vote, which could come this week. In the Senate, Democrats are using the budget reconciliation process to push it through, which would allow them to pass it if all their members are on board by a simple majority.
"It did not include additional funds for the provider relief fund and we were disappointed in that regard," Pollack said. "That's why we're calling for it to be included as we move through this process."
About $4 billion is left in the current relief fund and the third phase of allocations are still going out to hospitals, Pollack said.
Some major health systems have returned some or all of their relief funds, including for-profit HCA and non-profit Mayo Clinic.