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New AHA Report Paints Grim Picture for Hospital Financial Futures

July 09, 2020

A recent American Hospital Association survey of hospitals and health systems across the country paints a grim picture of unprecedented revenue losses totaling more than $120 billion through the end of 2020. The study found that further losses through the end of the year means that pandemic-related lost revenue will total more than $320 billion nationwide, and a large majority of facilities (67%) predict that patient volume won’t return to typical levels until 2021 at the earliest.
 
The AHA study was conducted in June, with 1,360 hospitals in 48 states responding to a survey. One-third of the responses came from hospitals and health systems in rural areas. The survey asked for data on reductions in inpatient and outpatient volumes compared to the previous year, and queried hospitals on when they expect to return to baseline patient volumes.
 
The overall revenue loss numbers continue to grow – a previous AHA study showed that the nation’s hospitals have already suffered $202.6 billion in losses between March and June 2020, so additional substantial losses could put patient access to care at risk. Importantly, these losses do not account for the recent rise in COVID-19 cases or assume any other future surges, so the study’s predicted losses could be underestimated. The AHA’s estimates also do not include other potential increased expenses, such as the costs for drugs, supplies of personal protective equipment (PPE), or an increase in the amount of uncompensated care due to high unemployment levels.
 
“This national study sounds very similar to what our Wisconsin hospitals and health systems are dealing with,” WHA President and CEO Eric Borgerding said. “Our own survey of state hospitals and systems showed more than $2.5 billion in lost revenue from mid-March through mid-May due to following national government directives to halt all non-emergency surgeries. And while our hospitals have carefully started to return to providing regular care, Wisconsin isn’t back to normal, either,” Borgerding said.

“We are appreciative of the dollars that have come from Washington to help alleviate some of the losses, but the damage continues to mount, especially for those ‘in-between’ hospitals – those that have not received additional aid because they are not rural or are not COVID ‘hotspots,’ yet suffered massive losses just the same,” Borgerding said. “There are more than a few of those ‘inbetweener’ hospitals here in Wisconsin, and they are being
overlooked and forgotten. This is increasingly concerning, and we need to address that in future relief efforts.”
 
The AHA study points out that government-funded relief for hospitals and health systems has not kept pace with the estimated $323 billion in losses.

“We’re fortunate to have nation-leading health care in Wisconsin,” Borgerding said. “In order to make sure folks across the state can maintain access to that care, we need our state and federal policymakers to stand up for their community hospitals and health systems, just like how health care has stepped up during this pandemic.”
 

This story originally appeared in the July 09, 2020 edition of WHA Newsletter