Federal aid replaces less than a week of revenue, two-thirds of health systems say

Two-thirds of integrated health systems said initial funds from the federal aid bill will replace less than one week of revenue lost due to the COVID-19 pandemic, according to a survey from healthcare trade association AMGA.

Under the Coronavirus Aid, Relief and Economic Security Act, healthcare providers received $100 billion in aid, but AMGA predicts it could take as much as $318 billion to replace half of the revenues hospitals and physicians may lose over four months. The cancellation of elective surgeries and procedures is the main contributor to the lost revenue. 

In its April 15-19 survey of 71 integrated health systems, AMGA found 40 percent of respondents have seen their revenue decline by more than half. Nearly all reported declines of 25 percent of more. Half (55 percent) reported having less than six months cash on hand, while 84 percent said they furloughed employees.

"Health systems are using every possible tactic to remain viable: furloughing employees, cutting salaries, exhausting reserves built up over decades, and accessing commercial loans," AMGA President and CEO Jerry Penso, MD, said in a press release. "Despite these measures, some groups and systems clearly are at risk to close."

More articles on healthcare finance:
Mayo Clinic furloughs, cuts hours of 30,000 employees to help offset $3B in pandemic losses
CMS to release another $30B in hospital aid: 5 things to know
HCA records 44% drop in profit, pulls 2020 guidance

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