June 30, 2020
Hospitals and health systems across the country face a collective, catastrophic loss of nearly $325 billion through the end of this year, according to a new report released today by the American Hospital Association (AHA). The report finds that the immense financial strain on hospitals and health systems due to COVID-19 will continue through at least the end of 2020, with patient volume expected to remain well below baseline levels. The report estimates an additional minimum of $120.5 billion in financial losses, due in large part to lower patient volumes, from July 2020 through Dec. 2020, or an average of $20.1 billion per month. These estimates are in addition to the $202.6 billion in losses the AHA estimated between March 2020 and June 2020 in a report released last month.
This brings total losses for the nation’s hospitals and health systems to at least $323.1 billion in 2020. The report notes that while potentially catastrophic, these projected losses still may underrepresent the full financial losses hospitals will face in 2020, as the analysis does not account for currently increasing case rates in certain states, or potential subsequent surges of the pandemic occurring later this year. If the current surge trends continue, the financial impact on hospitals and health systems could be even more significant.
“This pandemic has shown once again why America’s hospitals and health systems are indispensable cornerstones of their communities. However, hospitals and health systems are in the midst of the greatest financial crisis in our history, as we continue to fight this pandemic at the same time that non-COVID patient visits remain down,” said Rick Pollack, AHA president and CEO. “While we appreciate the support to date from Congress and the Administration, this report clearly shows that we are not out of the woods. More action is needed urgently to support our nation’s hospitals and health systems and front-line staff.”
The AHA report also says that hospitals and health systems currently report average declines of 19.5% in inpatient volume and 34.5% in outpatient volume relative to baseline levels from 2019. In addition, most hospitals and health systems do not expect volume to return to baseline levels in 2020.
Previously, IHA estimated that Illinois hospitals and health systems have been losing $1.4 billion a month due to canceled elective, non-emergent surgeries and procedures. IHA is urging the Illinois Congressional Delegation to support additional support and relief for hospitals and health systems in the next COVID-19 legislation. See an IHA advocacy alert and an IHA letter to the delegation for more information.