Christopher Fisher, CRCP-I, maxRTE Vice President Business Development

Sicker patients, higher labor, supply and equipment costs, and deferred treatment adding up to a 2021 $54 billion loss in net income.

Higher costs for labor, drugs and supplies, and continued delays in procedures, care and screenings—thanks to COVID-19—are decimating hospital income to the tune of a projected $54 billion this year. According to Kaufman Hall’s analysis released by the AHA, the patients are sicker, requiring longer lengths of stay and more services than prior to the pandemic in 2019.

Here’s an astonishingly scary statistic—on both the financial and public health fronts—from the report that reveals the severity of the problem: The seven-day average of new hospital admissions of patients with COVID-19 was 1,900 on June 19; on September 14, that number was 11,168 (based on recent data from the Centers for Disease Control and Prevention).

Many hospitals reported spending a lot more on staffing, paying for contract or travel nurses due to shortages. That picture will darken as fallout from strict vaccine mandates lead to resignations.

Bottom line bomb

Despite federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding from 2020, the report projects hospitals nationwide will lose an estimated $54 billion in net income in 2021. Without relief funds from the federal government, losses in net income would be as high as $92 billion.

The potential impact of variants is unknown at this time, which could put revenues in greater jeopardy. And though there’s been discussion about additional provider relief funds, to date no allocation or distribution has been made.

Projection based on data

The report incorporates hospital performance data from the first and second quarters of this year (before the latest surge) in addition to projections for the remainder of 2021 based on the data. Negative 2021 margins are expected for more than a third of hospitals. Median hospital margins are projected to be 11% below pre-pandemic levels by year end.

Stressed finances, future of healthcare in peril

The finances of America’s hospitals and health systems are under tremendous pressure as they continue to face the financial ravages of the spread of COVID-19. But the psychological impact on physicians, nurses, and other hospital caregivers and personnel could lead to a dearth of professionals that would have devastating effects on the quality of healthcare in America.

Softening the blow to revenues

Insurance discovery finds all unknown coverage for self-pay patients to help mitigate uncompensated care. Read about how hospitals are using Insurance Discovery to recuperate revenues once deemed to be lost. maxRTE is offering to process a complimentary test file. Learn more here.