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Hospitals begin road to recovery

Phases 2 and 3 of vaccine clinical trials are expected by early summer and their success will be known by early winter, Fauci says.

Susan Morse, Managing Editor

Hospitals want and need to get back to semi-normal, having suffered enormous financial losses from COVID-19, resulting in staff furloughs and wage reductions.

The $100 billion in the Coronavirus Aid, Relief, and Economic Security Act helped providers stay afloat. Hospitals received $50 billion directly. The remaining $50 billion went to pay for the claims of the uninsured and to target COVID-19 hot spots, rural hospitals and Indian Health Service facilities.

The money did not go far enough to keep health systems from having to cut expenses, which in most cases meant personnel.

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Kevin Donovan is CEO of LRG Healthcare, which includes two hospitals in the Lakes Region of New Hampshire and about 20 affiliated medical practices. The health system got a loan of $5.25 million from the state and $4 million in CARES Act funding.

"It's nowhere near what we need," Donovan said. "Four million is about a week's worth of expenses. We're appreciative of the $4 million; it's not enough to keep us going through the pandemic."

For the CARES Act funds to have been enough, the government would have to supply about $10 to $12 million a month, an amount which no one expects, he said.

"We made some hard decisions to temporarily shut down programs, furloughing 40% of our workforce," Donovan said. "It allowed us to keep the lights on for the organization."

The goal is to bring back all furloughed staff, who retain active employee status.

Lakes Region may get more money, about $2 million, from the rural component of the CARES Act.

As with many rural systems, LRG Healthcare feels lucky to break even. The system has net revenue of over $200 million a year, with expenses of about the same.

"We have lost money on operations for a number of years. A year we break- even is a great year for us," Donovan said. "This year, we're not in that category. We lost $5 million in March, half of it from COVID-19. We were projecting that without the furloughs, we would lose $10 million a month."

The hospitals are just now planning to slowly start bringing back time-sensitive care.

A new $3 trillion HEROES bill – the Health and Economic Recovery Omnibus Emergency Solutions Act – introduced by House Democrats, targets another $100 billion for hospitals. The Republican-led Senate is giving the bill push-back and may wait until after Memorial Day to act. Senate Majority Leader Mitch McConnell reportedly has said there is no "urgency."

The bill also provides subsidies for laid off workers to remain on their employer-provided health insurance plans through COBRA, the Consolidated Omnibus Budget Reconciliation Act that extends benefits, and creates an open enrollment period for plans under the Affordable Care Act.


The biggest concern to states' relaxing stay-at-home orders and other COVID-19 restrictions is safety, given Dr. Anthony Fauci's dire warning on Tuesday of the serious consequences of reopening too soon.

Patients are wondering whether it's safe to head back to hospitals and their doctors' offices and are weighing that against the health risk of delaying elective but necessary procedures. Statistics show many patients are fearful of getting care, even as hospitals and practices are reopening for more regular treatment.

Yet surgeons have told him that the operating theater is among the safest places to be right now due to testing, personal protection equipment and negative pressure rooms, according to Will Thomas, a partner at Parker Poe and the law firm's healthcare industry team leader.

The discovery of a serious inflammatory syndrome in children, which is thought to be related to COVID-19, is raising additional concerns.

While differing sides argue between the greater risk to health or to the economy, the nation pins its hope for a cure on a vaccine.

There are at least eight candidates for COVID-19 vaccines in clinical development, said Fauci, the nation's infectious disease expert, in testifying before the Senate Health Committee Tuesday by video.

The National Institutes of Health has been collaborating with a number of pharmaceutical companies for vaccines that are in various stages of development.

In January, Fauci projected it would take one year to 18 months to develop a vaccine.

Sixty-two days later, he said, the NIH is in Phase I of a clinical trial. Phases II and III are expected in late spring and early summer, and the success of the vaccine will be known in late fall or early winter.

The country has "multiple shots on goal," he said, producing vaccines at risk and investing considerable resources in developing doses even before experts know the candidates' worth.

The big unknown to a vaccine is efficacy.

There's also the possibility of negative consequences to the vaccine as certain vaccines can enhance the negative effect of the infection, Fauci said

And no one yet knows definitively whether someone who has recovered from COVID-19 and who has developed antibodies, is immune to becoming infected again.

For the treatment of COVID-19, the antiviral medication Remdesivir has been tested on hospitalized patients with lung disease in randomized trial sites worldwide. The result was statistically significant, but modest, Fauci said. Patients had a 31% faster time for recovery. 

"We hope to build on this modest success with combinations of drugs and better drugs," Fauci said.


The Advisory Board reported on May 7 that, in a CFO roundtable, participants said they were in a much better financial position as of April 24 than they were during the early weeks of the pandemic.

The consensus is that revenues are down massively but immediate insolvency is no longer a major concern, as long as volumes begin to return soon. CFOs are more concerned with revenue than cost.

Organizations are prioritizing inpatient, rather than outpatient services, in wanting to reschedule elective procedures.

"To a person, they're breathing a little bit easier now," said Christopher Kerns, vice president of executive insights for the Advisory Board.

All participants credited Medicare advanced payments for stabilizing the short-run outlook. Most have taken the full amount of advanced payment available, even those without cash flow challenges, the Advisory Board said.

The Advisory Board has advised:

  • confirm that you can safely manage elective procedures
  • determine how to prioritize procedural volumes
  • implement new policies and procedures
  • re-engage staff
  • establish an external communication plan

Hospitals can safely do procedures when the region is past the COVID-19 curve; when there is state and local government approval; sufficient beds, supplies, including PPE, and staff; and there is the capability to screen patients and staff for COVID-19 symptoms.

The cancellation of elective procedures has cost hospitals $161 billion, according to Matt Hawkins, CEO of Waystar, which specializes in revenue cycle management.

"The word 'elective' hides the fact that many of these postponed procedures aren't trivial or optional, but rather are important for the patient's quality of life, and can include anything from cancer treatments to solutions for chronic pain," Hawkins said.


Healthcare lost 1.4 million jobs, according to the latest figures released by the Bureau of Labor Statistics. This was led by losses in the offices of dentists (-503,000), physicians (-243,000), and other healthcare providers (-205,000).

COVID-19 could cost hospitals and health systems more than $200 billion from March through June, and the American Hospital Association has said.


"Clearly COVID-19 has forever changed what this organization will look like. A lot of hospitals five years from now will look at this event and find that, from a financial standpoint, it's caused them irreparable harm," LRG Healthcare CEO Kevin Donovan said.

Twitter: @SusanJMorse
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