KNOXVILLE, Tenn. (WATE) – The novel coronavirus is something health officials are still collecting data on, including its financial impact on hospitals throughout the state.
On Friday, the Tennessee Hospital Association announced the monthly loss of $1 billion in revenues for hospitals across the state due to the COVID-19 crisis, according to an analysis conducted by the nonprofit trade association.
The financial loss comes as the result of inpatient and outpatient service use dropping along with the costs for personal protective equipment and other resources increasing due to short supply.
The pandemic created what could be seen as a perfect storm for hospitals’ operating margins. The negative economic impact wave — preparing for hospital surge capacity, saving PPE and other critical supplies needed to treat a potential mass of COVID-19 patients, postponing of nonessential and elective surgeries, and the stay-at-home order – is washing through even though state officials are touting the positive impacts of social distancing and decreased day-over-day positive COVID-19 case percentages.
A surge is no longer being talked about with urgency. But facilities seem somewhat ready for one. On Thursday, Tennessee Department of Health Commissioner Dr. Lisa Piercey addressed the current surge capacity in state hospitals, with 33% of in-patient hospital beds available, 32% of ICU beds available and 75% ventilator access available.
Earlier this month, when state officials were still planning the phases of surge capacity build-outs and giving funding for rural hospitals to stay open, there wasn’t yet frequent talk of long-term economic impacts COVID-19 could have on health care facilities.
The bottom line that THA pointed out Friday – the negative impact of approximately $1 billion per month to an industry that typically generates an average of $1.7 billion in monthly revenues – was “staggering and an unintended result.”
Now, THA is looking to advocate for financial relief for hospitals due to the crisis.
“Recent funding opportunities for hospitals that are being made available at the federal and state levels are very much appreciated lifelines to this vital industry,” THA President and CEO Wendy Long said. “However, the reality is the impact is so massive that more assistance will be needed in order to ensure continuity of operations at hospitals and provide a necessary level of care. Now more than ever, Tennesseans need their hospitals to remain open and caring for their community.”
Also on Friday, East Tennessee Children’s Hospital President and CEO Keith Goodwin released a statement regarding the revenue losses to hospitals across the state:
“We have always been dependent on fundraising to make up the deficit of what we get paid and what it costs to operate Children’s Hospital. Currently, we are experiencing up to an 80% decline inpatient volumes for some services. The dramatic reduction in services, coupled with the increased costs of preparing for a surge of COVID-19 patients, has placed Children’s Hospital in a very difficult financial position.
Just as families rely on us to be here to care for their children, our staff rely on us for their livelihoods. While having fewer sick children is certainly positive, trying to quickly and temporarily adjust staff to these lower volumes has resulted in sending staff home. Many of those who remain at work have reduced hours. We must be open and available to care for our region’s children in their time of need.
Children’s Hospital is a community asset. Now, more than ever, we need help. It is not certain that we will receive money from the various stimulus programs that Congress has provided; therefore fundraising through this uncertain time is essential. The one thing we can be certain is that tomorrow’s need does not match today’s demand.”
Keith Goodwin, President and CEO, East Tennessee Children’s Hospital
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