American Hospital Association asks Congress for more action as health systems expect to lose $323 billion

Hospitals and health systems continue to suffer the financial strain of COVID-19 at an estimated cost of over $20 billion a month, according to the American Hospital Association.

In a new report, the AHA estimates an additional $120.5 billion in financial losses from July through December due to lower patient volumes. These estimates are in addition to the $202.6 billion in losses between March and June, according to the AHA in a report released last month. 

This brings total losses for the nation's hospitals and health systems to at least $323.1 billion in 2020. 

Hospitals and health systems are reporting average declines of 19.5% in inpatient volume and 34.5% in outpatient volume relative to baseline levels from 2019. In addition, most hospitals and health systems do not expect volume to return to baseline levels in 2020. 

While potentially catastrophic, these projected losses may under-represent the full financial losses hospitals will face this year, as the analysis does not account for currently increasing case rates in certain states, or potential subsequent surges of the pandemic occurring later this year, the AHA said.

If the current surge trends continue, the financial impact on hospitals and health systems could be even more significant.

The report takes into account the additional costs of acquiring personal protective equipment as patient volumes return, but does not include any direct COVID-19 treatment costs hospitals may incur, particularly if there are future surges. 

Other expenses, such as increased acquisition costs for drugs and non-PPE supplies and equipment, are also not included in these estimates. 

Thus, the estimated losses in today's report do not reflect the full financial impact of the pandemic on America's hospitals and health systems in 2020. Nor do they include the long-term effects of the pandemic beyond 2020, the AHA said.

WHY THIS MATTERS

AHA President and CEO Rick Pollack is requesting Congress to take more action to support health systems and hospitals, but is not giving specifics.

The COVID-19 pandemic shows no signs of slowing down, and in fact only two states – Rhode Island and Connecticut – have reported a decline in cases, according to CNN.

In a tweet late yesterday, Michael Caputo, the assistant secretary of the Department of Health and Human Services for public affairs, said HHS is expected to renew the Public Health Emergency due to COVID-19 before it expires. It has already been renewed once.

The PHE is scheduled to expire in July.

THE LARGER TREND

Congress has allocated $175 billion to date, though providers have not seen all of the funding.

The Provider Relief Fund of the Coronavirus Aid, Relief and Economic Security, or CARES, Act, allocated $100 billion, and the Paycheck Protection Program and Healthcare Enhancement Act added another $75 billion.

The Department of Health and Human Services has distributed $50 billion in a general allocation to hospitals and more than $60 billion in targeted relief to hot spot areas, tribal and rural hospitals, skilled nursing facilities, safety net hospitals and sole Medicaid providers.

In addition, HHS allocated an unspecified amount to reimburse claims for COVID-19 treatment for uninsured patients. 

ON THE RECORD

"This pandemic has shown once again why America's hospitals and health systems are indispensable cornerstones of their communities," said Rick Pollack, AHA president and CEO. "However, hospitals and health systems are in the midst of the greatest financial crisis in our history, as we continue to fight this pandemic at the same time that non-COVID patient visits remain down. While we appreciate the support to date from Congress and the Administration, this report clearly shows that we are not out of the woods. More action is needed urgently to support our nation's hospitals and health systems and front-line staff."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com