The American Hospital Association (AHA) warns, in a new report, that “hospitals and health systems face catastrophic financial challenges in light of the COVID-19 pandemic.”
From soaring COVID-19 costs to canceled services to plunging hospital revenue to purchasing personal protective equipment to reimbursement landscape challenges to decreasing patient volumes, many of these factors have triggered a recent bankruptcy wave and or closures of hospitals across the country.
AHA said the virus pandemic has created a cash crunch for many hospitals. These medical facilities are expected to lose upwards of $200 billion between March 1 and June 30, or about an average of $50.7 billion per month. U.S. nonfederal hospitals are expected to lose approximately $161.4 billion in revenue over the four months, due to canceled services (including nonelective surgeries and outpatient treatment).
To better understand the financial challenges for many hospitals, AHA lists the top financial burdens:
- the effect of COVID-19 hospitalizations on hospital costs;
- the effect of canceled and forgone services, caused by COVID-19, on hospital revenue;
- the additional costs associated with purchasing needed personal protective equipment; and
- the costs of the additional support some hospitals are providing to their workers.
AHA said that even though the federal government provided financial assistance to hospitals during the virus outbreak – many facilities had existing financial pressures before 2020. – READ MORE
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