COVID Continues Stressing Health Care
By Eric Borgerding, WHA President and CEO
Falling COVID cases this summer suggested the pandemic was behind us. That relief was short-lived. This fall’s Delta-fueled spike—the state’s third COVID surge—continues to escalate as of this writing while vaccination rates are slow to improve. This combination is causing more serious illness and longer hospital stays, straining hospital capacity. As life and commerce outside hospitals returns to normal, inside hospitals it’s been over a year of a continuous state of surge, requiring more resources and stressing capacity.
For months, hospitals have been dealing with the effects of delayed non-COVID care caused by the federal suspension of non-emergent care in 2020 or COVID “crowding out” capacity for other care or patients remaining hesitant to seek care during the pandemic. That delayed care is resulting in very high volumes and typically sicker, more resource-intensive patients today.
The CDC estimates that by June 30, 2020, approximately 41% of adults had put off needed health care because of the pandemic. This has been the trend through 2021. Hospitals have learned to “coexist with COVID,” which, among other things, means avoiding postponement of other types of care while also treating surging COVID patients. However, managing both translates into capacity and workforce-stressing volumes, which are reaching their limits in the most recent surge.
At the same time, capacity needed to serve such high demand is severely constrained by seemingly unrelated problems in Wisconsin nursing homes. For months, hundreds of staffed hospital beds, desperately needed for inpatient care, have been occupied by patients who no longer need hospital care. This is because nursing homes, for various reasons, cannot or will not accept their dischargeable hospitalized residents or other patients needing nursing home care. The nursing home bottleneck is impacting the ability of hospitals to care for other patients.
As in other industries, the extremely tight labor market is causing skyrocketing labor costs and rapid wage inflation in health care. This is partly driven by growing reliance on temporary nurse staffing agencies, which are charging double or more their typical price, as nationally, everyone is competing for the same finite pool of these traveling staff. While labor comprises 60% of hospital operating costs, hospitals cannot limit their hours or scale back production in response to worker shortages or wage inflation. They must be there 24 hours a day, every day.
Operating and total margins were down for most Wisconsin hospitals in FY 2020, with many booking negative margins. Overall, Wisconsin’s hospitals recorded a 1.6% patient care margin in FY 2020, a 70% reduction from 2019. Put simply, COVID has resulted in greater costs for all hospitals and falling margins for many.
Through it all, Wisconsin’s hospitals and health systems have demonstrated an even greater commitment to their communities. This includes taking on and resourcing more and more basic government and public health tasks—from virus testing and vaccine administration to serving as de-facto nursing homes and even providing care for 13,000 Afghan evacuees arriving with very little notice at Fort McCoy. All while continuing to treat disease, heal and save accident victims, and best of all, deliver babies.
Those who enter the health care field often describe their motivation to do so as a “calling.” That calling is being tested like never before. May 2022 bring some relief to those we count on and do so much to keep us healthy.
This column appears in the January 2022 issue of Wisconsin Banker.
This story originally appeared in the December 30, 2021 edition of WHA Newsletter