From a financial perspective, the COVID-19 pandemic was painful for hospitals in March, according to a new report from Kaufman Hall.
The new funds committed to America’s hospitals in the most recent Senate relief package, an additional $75 billion on top of the $100 billion from the CARES Act, comes at the most desperate of times for these organizations. According to the report, based on data from 800 hospitals, operating margins fell by an average of 150 percent in March and 170 percent below budget, a full 13 percentage points relative to last year.
A major factor in this drop off is the fact that most hospitals have cancelled or postponed elective surgeries. Operating room minutes dropped nearly 20 percent from the same time one year ago and more than 25 percent below budget. The worst may be yet to come.
“These initial numbers only reflect the first two weeks of the COVID-19 response and likely indicate more negative results in the future,” Jim Blake, managing director at Kaufman Hall, said in a statement.
The new funding should help—although for how long is uncertain. Before it was passed, JPMorgan’s analysis found that the $100 billion in stimulus funds for providers included in the CARES Act would be enough to cover losses for two months. According to a report from the Federation of American Hospitals, Beaumont Health and Bon Secours Mercy Health both recently stated they are losing $100 million per month.
J.P.Morgan – Life Science Tools & Diagnostics COVID-19 Outlook, Physician Survey & Sensitivity Analysis (March 2020)
Cash-starved hospitals and doctor groups cut staff amid pandemic, The Washington Post