U.S. Hospitals Hit By Financial 'Triple Whammy' During Coronavirus Pandemic

Apr 23, 2020
Originally published on April 23, 2020 9:27 pm

The coronavirus outbreak has thrown hospital systems throughout the U.S. into crisis — both medical and financial. The cost of treating coronavirus patients, combined with the loss of revenue from canceling elective procedures, has left many hospitals in desperate financial straits.

Some estimates suggest hospitals are losing $50 billion a month, says Rick Pollack, president and CEO of the American Hospital Association.

Earlier this month, as part of the coronavirus relief package known as the CARES Act, the federal government began disbursing $30 billion in aid to hospitals across the country. On Friday, another $20 billion is expected to be released.

While that may sound like a large sum, Pollack told NPR on Thursday that hospitals have "a tremendous need."

"I think it's fair to say that hospitals are facing perhaps the greatest challenge that they have ever faced in their history," said Pollack, whose organization represents the interests of nearly 5,000 hospitals.

Here are excerpts from the interview.

Can you paint us a picture of the financial situation for hospitals right now?

We're being faced with what I would call a triple whammy. 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.

Some of the federal bailout money will also go to hospitals to reimburse them for treating uninsured patients. Are you getting enough money for that?

The CARES legislation was really designed to provide emergency relief for uninsured and insured people. 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.

Listen to the full interview at the audio link above.

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AILSA CHANG, HOST:

The coronavirus outbreak has thrown hospital systems throughout the U.S. into crisis - not just a medical crisis. Many are also facing a financial one. The cost of treating coronavirus patients combined with the loss of revenue from canceling elective procedures has left many hospitals in desperate financial straits.

Rick Pollack is the president and CEO of the American Hospital Association. It's a professional organization representing the interests of nearly 5,000 hospitals around the country. Welcome back to ALL THINGS CONSIDERED.

RICK POLLACK: Thank you very much for having me.

CHANG: So can you just first paint us a picture of the financial situation for hospitals right now? Like, what are you hearing from hospital administrators?

POLLACK: Well, I think it's fair to say that hospitals are facing perhaps the greatest challenge that they have ever faced in their history. We're being faced with what I would call a triple whammy. 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. You combine that with the increased number of uninsured as a result of the economic situation, and you got a triple whammy there.

CHANG: A triple whammy. Well, I want to talk about what kind of difference the federal government is making for all of you right now. Earlier this month, $30 billion in federal aid were sent to hospitals around the country. This Friday, hospitals are going to get another $20 billion. How should that money be allocated in order to have the most impact right now?

POLLACK: Well, there are different approaches that HHS has taken to distribute the funds. The first $30 billion was based on a certain type of metric. The second distribution is occurring as we speak. While that all sounds like a lot of money, we have a tremendous need. In fact, we've seen estimates that suggests that hospitals are losing $50 billion a month...

CHANG: Wow.

POLLACK: ...As a result of the increased expenses and decreased revenue.

CHANG: Well, you mentioned the uninsured, and I want to talk about that specific challenge right now. Some of the federal bailout money will also go to hospitals to reimburse them for treating uninsured patients. Are you getting enough money for that?

POLLACK: Well, you know, the CARES legislation was really designed to provide emergency relief for uninsured and insured people. 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.

CHANG: So looking further down the road, when do you think it will be responsible for hospitals to resume elective surgeries to start to make up for these financial losses? I mean, what benchmarks need to be met first?

POLLACK: We do need to begin to provide those types of services. Initially, they were basically shut down because there was a need to preserve PPE. But as the PPE situation begins to be improved, we think we need to get back to doing those procedures which are very necessary. CMS has put out guidelines which we support. The American College of Surgeons, along with the operating room nurses and the American Society for Anesthesiology, have put out guidelines which we think are very thoughtful and reasonable. And they have benchmarks in terms of when to begin to move, what are the stages in which you have to ensure that it's safe to do these. Of course, we have to make sure that our governors are also supportive of these national guidelines.

CHANG: Rick Pollack is the president and CEO of the American Hospital Association. Thank you very much for joining us today.

POLLACK: Thank you for having me. Transcript provided by NPR, Copyright NPR.