Hospitals expect $200B hit from COVID-19 over 4 months

U.S. hospitals and health systems are losing more than $50 billion per month due to the COVID-19 pandemic, according to a report from the American Hospital Association. 

From March 1 to June 30, the AHA estimates hospitals will lose $202.6 billion, or an average of $50.7 billion per month. About $161.4 billion of the expected revenue losses will come from canceled services, including nonelective surgeries and outpatient treatment. COVID-19 hospitalizations are expected to result in another $36.6 billion in losses. Purchasing equipment and supplies, such as personal protective equipment, and additional support for front-line workers in COVID-19 hot spots will add another $4.6 billion to the tab. 

Though Congress has allocated $175 billion for hospitals and other healthcare providers in COVID-19 aid packages, the AHA says more support is needed. 

"Additional support will be critical as the country moves into a new phase of recovery and rebuilding," the AHA said. "As the country faces the inimitable challenges of COVID-19 head-on, Americans cannot afford the cost of closed hospitals and restricted access to life saving treatment — action is needed urgently to support our nation's hospitals and health systems and the heroes that work there." 

Experts say it could take years for hospitals to recover from the financial damage caused by COVID-19. It may take two to three years for the average nonprofit health system, with an operating margin of about 2 percent, to make up lost revenue, Stephen Klasko, MD, president and CEO of Philadelphia-based Jefferson Health, told CNBC

More articles on healthcare finance:
Pennsylvania hospital to close, lay off 694 if sale collapses
How CHS, Tenet, HCA and UHS fared in Q1
HHS doling out $22B to COVID-19 hotspots, rural hospitals

© Copyright ASC COMMUNICATIONS 2021. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.