AHA reports nation’s hospitals losing about $50 billion a month fighting pandemic

May 6, 2020

In a new report, the American Hospital Association (AHA) estimates that the financial impact to hospitals and health systems from COVID-19 expenses and revenue losses over the four-month period from March 1 and June 30 totals $202.6 billion, with losses averaging over $50 billion per month.

The estimate includes the costs of COVID-19 hospitalizations, canceled and foregone services, purchasing needed personal protective equipment and providing additional support to hospital workers.

“America’s hospitals and health systems have stepped up in heroic and unprecedented ways to meet the challenges caused by COVID-19,” said AHA President and CEO Rick Pollack. “However, the fight against this virus has created the greatest financial crisis in history for hospitals and health systems. While we appreciate the support and resources from Congress and the Administration, many hospitals are still on the brink. We need further support and resources to ensure that we can continue to deliver the critical care that our patients and communities are depending on while also ensuring that we are prepared for the continuing challenges we face from this pandemic as well as other potential emergencies.”

As outbreaks have occurred across the country infecting more than one million people, hospitals have ramped up testing efforts and are treating hundreds of thousands of Americans in an effort to save lives and minimize the virus’ spread. This includes establishing testing tents, adding general and intensive care unit (ICU) bed capacity, and developing COVID-19 units to isolate and treat patients with the disease while safeguarding the health of other patients and hospital staff.

These challenges have created historic financial pressures for America’s hospitals and health systems. Hospitals have cancelled non-emergency procedures, and many Americans are postponing care as they shelter in place to stop the spread of the virus. Treatment for COVID-19 has created incredible demand for certain medical equipment and supplies as the virus has disrupted supply chains, increasing the costs that hospitals face to treat COVID-19 patients.

At the same time, COVID-19 has led to unprecedented job losses, giving way to a rise in the number of uninsured. And while doctors, nurses, and other health care workers have met the COVID-19 challenge with heroic efforts, many hospitals and health systems, especially those located in hotspot areas of the pandemic, are supporting them by providing essentials like child care, transportation, and in some cases, housing. Hospitals and health systems face catastrophic financial challenges in light of the COVID-19 pandemic.

The AHA undertook four analyses to better understand and quantify these financial challenges. Including:

• the effect of COVID-19 hospitalizations on hospital costs;

• the effect of cancelled and forgone services, caused by COVID-19, on hospital revenue;

 • the additional costs associated with purchasing needed personal protective equipment (PPE); and

• the costs of the additional support some hospitals are providing to their workers.

The report attempts to quantify these effects over the short-term, which are limited to the impacts over a four-month period from March 1, 2020 to June 30, 2020. Based on these analyses, the AHA estimates a total four-month financial impact of $202.6 billion in losses for America’s hospitals and health systems, or an average of $50.7 billion per month.

AHA has the report.

More COVID-19 coverage HERE.