Hospitals Pay Price As COVID-19 Keeps Patients Away

The COVID-19 crisis isn’t just hitting the medical profession hard, it’s pummeling the industry on multiple fronts at once. There are the genuine health risks to frontline workers, the endemic shortage of personal protection equipment, concerns that patients will overwhelm the system and a mounting economic crisis that’s facing hospitals and physicians nationwide.

Put simply, medicine is going broke — hit by what Rick Pollack, president and CEO of the American Hospital Association, called a “triple-whammy” of bad conditions simultaneously.

“I think it’s fair to say that hospitals are facing perhaps the greatest challenge that they have ever faced in their history,” Pollack, whose organization represents the interests of nearly 5,000 hospitals, told NPR. “We have the increased expenses that have been incurred in terms of preparing for the surge and caring for the COVID patients. And then we have the decreased revenues associated with having shut down regular operations in terms of scheduled procedures. You combine that with the increased number of uninsured as a result of the economic situation, and you’ve got a triple-whammy there.”

The estimates for hospital losses thus far clock in at an average of roughly $50 billion a month. However, Pollack noted that those losses aren’t evenly distributed. Some hospitals are seeing revenue drop off by more than three-quarters of pre-pandemic levels as they’ve been forced to shut down elective surgeries, which often pay the bills.

And the coronavirus hit is broader than just hospitals. Primary care physicians and specialists nationwide have also noted the economic stress of closed offices. A lack of in-person patient visits has put their practices in the same condition that many other small and medium-sized businesses (SMBs) find themselves in — barely clinging to survival.

“When patients don’t come in, we can’t pay our staff,” Sarah Mullins, one of four physicians at Stoney Batter Family Medicine in Wilmington, Del., told Bloomberg.

Farzad Mostashari, chief executive officer of Aledade, a company that supports about 550 physician practices (including Mullins’ firm), noted that closing down an office is “the right thing to do” from the point of view of protecting communities, but can mean doctors are courting “financial ruination.”

He noted that many practices have been both agile and proactive when it comes to digitizing their services, jumping feet first into digital health and telemedicine offerings. However, insurance companies typically only reimburse those visits at roughly 30 percent the rate for in-person consults, which isn’t exactly replenishing the lost revenue.

Progress on mitigating some of the problems is being made. For example, Blue Cross Blue Shield, UnitedHealthcare, Aetna and Humana Inc. have pledged to either permanently or temporarily reimburse telehealth visits at the same rate as in-person care. Legislation is also being considered that would essentially require all insurers to do so.

Congress has also sought to funnel funds into the industry via the CARES Act, the coronavirus-relief package passed late last month. The aid includes $30 billion for hospitals, with another $20 billion expected this week.

The American Hospital Association’s Rick Pollack calls that a good start, but not quite a finish because the way the money has been appropriated means it isn’t designed to solve the cash crunch that’s eating up providers nationwide.

“The CARES legislation was really designed to provide emergency relief for uninsured and insured people,” Pollack said. “We don’t take a backseat to anyone in advocating for coverage of the uninsured, but there are other mechanisms to cover those that don’t have insurance. We think that these funds from the CARES Act really should be focused on maintaining the viability of hospital operations.”

Nisha Mehta, a radiologist in North Carolina who runs online networking groups for physicians, was a bit more pointed in her comments to Bloomberg. She said physicians and hospitals are somehow getting less attention from legislators than airlines and casinos — making the entire industry nervous.

“Everybody’s afraid they’re going to say, ‘Well, doctors make a lot of money. We’re not going to bail them out in this situation,’” Mehta said. “You want to put us on the front lines, and then you don’t want to bail us out if our practices fail.”