Cash crunch from COVID-19 could force 100 hospitals to close

Financial damage caused by the COVID-19 pandemic could cause up to 100 hospitals to close within a year, according to an analysis by USA Today

The analysis revealed thousands of hospitals across the U.S. were strapped for cash before the pandemic. Only about half of the 5,000 hospitals that reported cash-on-hand figures in 2017 had enough money to cover one month of salaries, according to USA Today's analysis of financial reports submitted to CMS. 

For many hospitals that were under financial stress before COVID-19 arrived in the U.S., the dramatic drop in revenue due to canceling nonemergency care and increased supplies costs could cause them to close. Of the more than 2,700 counties with confirmed cases of COVID-19, nearly half are served by a hospital that recorded negative net income in 2017, according to USA Today's analysis.

Rural America may see more hospital closures than urban areas. According to USA Today, nearly half of the hospitals in jeopardy are in rural counties.

To combat the economic damage caused by COVID-19, President Donald Trump has signed four emergency funding bills into law, the most recent of which provided $75 billion for hospitals. A previous aid package created a $100 billion emergency fund to reimburse healthcare providers for expenses or lost revenue related to the COVID-19 pandemic. Within that pool, HHS allocated $10 billion to rural hospitals and clinics. 

Access the full USA Today article here

More articles on healthcare finance:
CHS turns a profit in Q1 as it nears end of hospital divestiture spree
Mayo Clinic receives $1B in grants, loans
Closed hospitals received part of $50B bailout

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