Hospital group: We’re losing $1.5 billion a month
As medical professionals valiantly serve on the frontlines of the coronavirus pandemic, the Hospital and Healthsystem Association of Pennsylvania said medical facilities across the state are losing between $1.5 and $2 billion in fighting this battle.
“The health care community is facing significant financial stress as a result of actions taken to prepare for the COVID pandemic outbreak,” said Andy Carter, HAP’s president and CEO, giving the examples of cancelling non-essential, elective services and costs associated with recruiting health care workers like physicians, nurses and respiratory therapists.
“The combination of losing the revenue associated with cancelling all of those services as well as the additional costs they’re incurring to be ready generates and an estimated loss to these organizations every month of somewhere between $1.5 to $2 billion a month,” he said. “The financial strain on these organizations is enormous.”
He mentioned that some organizations have had to furlough and lay off employees. Here in Delaware County, Trinity Health Mid-Atlantic, the parent company of Mercy Fitzgerald Hospital announced last week furloughs in their workforce, in addition to reductions in hours and redeployments of other employees to different positions or locations throughout the region. Compensation of Trinity Health executive leaders also was reduced and all capital expenditures not related to coronavirus were frozen
Carter said he was asking the state to cancel required tax payments for special quality care assessment programs.
“We believe cancelling those upcoming payments would reduce the financial burden on hospitals by around $500 million,” he said.
In addition, he said he’d like to see Pennsylvania create a health care coronavirus emergency response fund, similar to the one created by the federal government through the CARES Act to create resources for hospitals and all health care providers facing this health care crisis.
Carter said his organization is also asking the payer community through periodic interim payments, in which payers would provide cash advance strategies to address critical cash flow issues facing many HAP members and for liability protection for doctors, nurses and health care professionals during this emergency.
Carter also warned that a lack of PPE and a higher curve could lead to more catastrophic outcomes for the medical systems and the community.
“It is widely understood that the supply of personal protective equipment, sometimes called PPE, is stretched thin and demand is very high and we fully expect demand to continue to rise, presenting increasing challenges around having adequate protective equipment for our healthcare workers,” he said. “It is one of the reasons it is one of our highest priorities to chase down every possible avenue for this equipment and these supplies, including ventilators.”
He said the association was working with the state and federal government to bring more supplies into Pennsylvania and continues to be in the process of identifying manufacturers capable of making more supplies.
Carter said Gov. Tom Wolf’s executive order will allow for supplies to be quickly distributed wherever they are most needed.
On Wednesday, the governor signed an order that mandates all health care providers and facilities and manufacturers, distributors and suppliers of PPE, pharmaceuticals and
other medical resources in Pennsylvania submit current inventory quantities within five days. Then, the providers and facilities are directed to provide written reports of their needs so that supplies and equipment then can be allocated to where they are needed most.
Carter said it was his belief that the voluntary system to allocate resources where they are needed works well, however, he added that the supply of this equipment itself is vitally needed, particularly in light of the potential for this virus to have even greater widespread effect.
“Because we have concerns that under some projections, the number of patients requiring hospitalization is potentially so significant that we may struggle in the future to have enough supplies,” Carter said. “We have enough right now in Pennsylvania, by and large, to meet existing demand but it’s vital that we continue accelerating efforts to improve the supply of necessary equipment, prescription drugs that are a part of this strategy as well as ventilators.”
Another way to combat this, he stressed, is by continuing efforts to flatten the curve.
“So that the worst-case scenarios that place enormous strains on the healthcare system don’t unfold,” Carter added. “We continue to urge the public to stay at home for all but life-sustaining activities ... If we do reduce the rate of growth, we can avoid the worst projections that people have seen.
“We really face a potential calamity if we don’t continue doing everything we can to reduce the demand on the health care delivery system,” he said.