As we approach the end of April, the emergence of daily COVID-19 cases across North America seems to be declining. Several geographies are planning to begin the process of opening up businesses and steadily lifting social distancing rules. People are clamoring to not just get out of the house and see friends and family, but they are eager to get back to work.
The financial impact of this pandemic will most assuredly be felt for quite some time. Unemployment in the United States is at the highest rate it has been in over a decade and economists predict it could reach as high as 16-20% by Q3. Many people have lost jobs, small businesses have either failed or been seriously staggered, and some industries are desperate to try and recover just a fraction of the losses suffered over the past 2 months. Healthcare is not immune to this impact either.
It may seem counterintuitive to think that hospitals would be dealing with financial challenges when there is an abundance of need for COVID-19 treatments. While the mission of hospitals is primarily driven by providing the best care possible, they still have a balance sheet like any business. One of the main drivers for hospital revenue is surgery. With hospitals across the world ceasing elective surgeries back in mid-March, the financial impact is now readily apparent. According to a recent article in MedPage Today, Bon Secours Mercy Health in Cincinnati, Ohio is projecting a monthly loss of $100 Million for each month the pandemic continues to impact surgery.
Many hospitals were functioning with narrow margins before the start of the pandemic. As Alyssa Burgart, MD at the Stanford Center for Biomedical Ethics, aptly states in the article, “The financial implications of not being able to do elective procedures are vast and there are, unfortunately, going to be hospitals that may have a hard time even keeping the lights on.”
According to the potential roadmap for resuming elective surgeries published by the American College of Surgeons, American Society of Anesthesiology and the Association of PeriOperative Registered Nurses, “When the first wave of this pandemic is behind us, the pent-up patient demand for surgical and procedural care may be immense.” The resultant difficult decisions necessary to order that demand based on severity level will become even more difficult when financial incentives are also a factor. Facilities need the flexibility to strike a balance between the urgency of cases with the dependency on revenue drivers to make sure the hospital can remain solvent.
Together, we can lift each other up!
-Marcus Perez, EVP