New York hospital system Northwell Health estimated it lost $1.1 billion in operating revenue for the first six months of the year due to plummeting volume losses stemming from the pandemic.
The system’s latest earnings statement said the loss was blunted in part by money from a federal provider relief fund. Overall, the system posted a nearly $250 million loss in the first half of the year, compared with generating $69 million in profit the same period in 2019.
New York became the first major epicenter of the pandemic back in March and hospitals across the area were overwhelmed with cases. The state saw major declines in patient volumes as hospitals cancelled elective procedures.
The 13-hospital system generated $4.2 billion in net patient service revenue for the first half, compared with $4.6 billion in 2019. Physician practices within the system generated $871 million, compared with $1 billion the same period in 2019.
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Northwell reported that its volumes have rebounded since the sharp declines in March and April.
“While volume continues to improve, for most inpatient and outpatient services, through July, it was still at levels lower than pre-COVID-19,” the system said in its earnings release.
Northwell has faced higher expenses for supplies and staff as it scrambled to fight the surge of COVID-19 in early spring.
The system’s operating expenses for the first half were $6.5 billion compared with $5.9 billion last year.
Northwell doesn’t expect things to get better in the second half of the year, even as cases of COVID-19 in the New York area dwindle. In July, the system estimated that it has lost an additional $100 million.
Northwell received $1.2 billion from a $175 billion provider relief fund passed by Congress as part of the CARES Act. The system reported $754 million of that revenue as operating revenue for the first six months.
The provider relief fund gave $50 billion to all providers and gave targeted funding to providers in COVID-19 hot spots.
The system also got $1 billion in advance payments under the Medicare Accelerated and Advance Payments program. The payments, however, are essentially a loan that the system must repay by May 2021.
Northwell has also deferred about $93 million in payroll taxes under the CARES Act.
The system cautioned that the “ultimate net impact of the pandemic to Northwell and its financial condition is uncertain.”
Northwell is the latest hospital system to post losses in the first half of the year despite getting a hefty amount of provider relief funding.
Hospital groups such as the American Hospital Association and the Federation of American Hospitals has charged that more relief funding is needed to keep systems afloat. But talks on Capitol Hill have stalled on a new broader COVID-19 relief package.