AHA: COVID-19 pandemic could cost hospitals $200B through June

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A new report from the AHA pegs the loss of revenue for hospitals due to COVID-19 at $202 billion from March 1 through June 30. (iStock/Getty Images Plus/wildpixel)

The COVID-19 pandemic could cost hospitals $202.6 billion in losses for hospitals and health systems through the end of June, a new report found.

The report from the American Hospital Association comes after weeks of furloughs and pay cuts installed by health systems wracked by the financial strain of COVID-19. It also comes more than a week after Congress gave hospitals another $75 billion to providers on top of $100 billion in an economic stimulus package about a month ago.

“While we appreciate the support and resources from Congress and the administration, many hospitals are still on the brink,” said Rick Pollack, president and CEO of AHA, in a statement. “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.”

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Hospitals have been wracked by lost revenue from the cancellation of elective surgeries and a severe drop off of patient volume.

RELATED: UC hospital system to gradually restart elective procedures canceled due to COVID-19

The report calculated the lost revenue for hospitals from March 1 through June 30 by examining 2018 Medicare inpatient and outpatient claims alongside results from an AHA survey done that year.

“Medicare revenues were calculated from claims data, and revenues for other payers were estimated using ratios of net revenues from the other payers to those from Medicare, derived from the AHA Annual Survey Database,” the report said.

The cancellation of hospital services alone represented $161.4 billion in lost revenue for hospitals over a period of four months.

Hospitals and health systems will also lose $36.6 billion over the same period due to the high costs of treating COVID-19 patients.

But the report’s estimates didn’t just take into account the cancellation of such procedures, but also the additional costs for purchasing personal protective equipment as well as more support for frontline workers.

“For example, some hospitals are providing childcare, housing and transportation for their frontline caregivers and other employees,” the AHA said.

AHA estimates it will cost hospitals $2.4 billion to provide PPE and other needed supplies and another $550 million per month for additional costs such as transportation and housing.

RELATED: Trinity Health, WakeMed Health systems eye a restart of elective procedures canceled due to COVID-19

The group also did not think things will get better financially for hospitals after June 30.

Major systems such as Trinity Health and the University of California’s hospital system are taking baby steps to resume elective procedures put off due to the pandemic. But any resumption must be accompanied by increased testing and screening and ensuring there are enough staff and PPE to resume surgeries.

The report comes a few days after the AHA and American Nurses Association asked Congress for a separate fund to help provider workers on the frontlines.

But it remains unclear whether Congress is going to give providers any more funding.

So far, Congress has given hospitals and other providers $175 billion, but a part of that money will go toward covering COVID-19 treatments for the uninsured. HHS has given out details on how it will distribute $70 billion to providers, including specific allotments for COVID-19 hotspots and rural providers.

Congressional leaders are in talks for another round of stimulus funding, but House Majority Leader Steny Hoyer told reporters last week that the next package will likely center on help for states and localities.

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