- Safety net hospitals throughout the United States have been especially stressed from the COVID-19 pandemic, with huge drops in admissions that have directly impacted their finances, according to a new analysis of several such institutions by the Robert Wood Johnson Foundation and the Urban Institute.
- The five hospitals examined were Erie County Medical Center in Buffalo, New York; Henry Ford Hospital in Detroit; Parkland Hospital in Dallas; Truman Medical Center in Kansas City, Missouri; and Vidant Medical Center in Greenville, North Carolina. Medicaid patients represented nearly 28% of their payer mix on average.
- Their patient discharges dropped anywhere from 18% to 36% during the height of the first surge of COVID-19 cases in the spring, while revenues declined as much as 48%. Although funding from the Coronavirus Aid, Relief, and Economic Security Act helped the hospitals get through the worst of the pandemic, the analysis suggests they will have to enact cost cutting for the foreseeable future.
The COVID-19 pandemic has hit virtually every U.S. provider hard, with the aftereffects likely to continue well into 2021. But safety net facilities — more reliant on lower levels of reimbursement from the Medicaid and Medicare programs than other hospitals — were hit particularly hard, according to data compiled by the Robert Wood Johnson Foundation.
Aside from the drastic decline in patient volumes over the spring, the facilities were also swamped with COVID-19 patients. Parkland Hospital, for example, treated nearly 7,000 of them as of Aug. 31.
Only Henry Ford saw a complete recovery in discharges by late summer. Emergency department visits also declined between 35% and more than 57% during the spring, and have not yet completely rebounded. As a result, revenue dropped between 40% and more than 50%.
In addition to the lost revenue from the decrease in patients, the hospitals also had to spend more to buy personal protective equipment, had to reconfigure their floor plans and even lost staff temporarily due to illness. One unnamed facility had 2,000 of their own employees test positive for COVID-19.
Funding from the CARES program helped keep the hospitals in operation, with the facilities receiving between $37.3 million for Vidant to $187.5 million for Henry Ford. However, they have all had to lay off staff, some permanently.
But, as the analysis noted, "it is unclear whether more funding will be made available to safety net hospitals from the CARES Act Provider Relief Fund, or whether more money will be allocated if there is another COVID-19 wave."
Although HHS has begun issuing another $25 billion in CARES funds, "hospitals will have to reduce future expenses to stabilize their finances," the analysis concluded, adding that "this is a tall order for all hospitals but even more so for safety net hospitals, given that they care for disadvantaged populations and rely heavily on public funding, which may be more limited in the future."