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Hospitals want $35 billion in $1.9 trillion COVID-19 relief package

New analysis shows total hospital revenue in 2021 could be down between $53 billion and $122 billion from pre-pandemic levels.

Susan Morse, Managing Editor

The American Hospital Association is asking the federal government for $35 billion to be included in the current $1.9 trillion COVID-19 relief package that is expected to pass the House on Friday.

Unlike the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act that passed last March and contained $100 billion for hospitals, the current bill has no direct money for hospitals. It does include funding to boost the vaccination effort, for testing and for personal protection equipment and increased subsidies for the uninsured.

As the bill still needs to go through the Senate, there is still time to make further amendments, AHA president and CEO Rick Pollack said during a press call Wednesday.

"We definitely want to see it in this package right now," Pollack said. "It's red alert time for the provider relief fund." 

An estimated $4.4 billion is left from the previous relief package, according to the AHA. While some bigger systems have returned the funds they received in the package, Pollack said the overwhelming number of hospitals needed every penny. 

The AHA would also like to see loan forgiveness to be part of the new bill.

WHY THIS MATTERS

As the number of COVID-19 cases across the country declines, many hospitals and health systems are still at capacity from a third coronavirus surge and face financial challenges, Pollack said.

New analysis prepared by Kaufman, Hall & Associates and released by the AHA on Wednesday forecasts that total hospital revenue in 2021 could be down between $53 billion and $122 billion from pre-pandemic levels. 
 
The Kaufman analysis showed that, compared to 2019, expenses in 2020 rose for drugs, purchased service expenses and supplies. Labor per adjusted discharge rose 14% due to contract labor, hazard pay and other expenses for maintaining a workforce.

Hospital executives on Wednesday said they were experiencing a nursing shortage due to several reasons, including the possibility that nurses could get $150 an hour to be a travelling nurse versus the $48 an hour they are paid as hospital staff.

Nurses are simply tired, said Judy Rich, president and CEO, Tucson Medical Center, Tucson in Arizona. Tucson Medical Center had 94 deaths in January.

In other cases, nurses had to choose between work and having children at home while schools were not holding in-person sessions. Some nurses who were close to retirement chose to leave while others left for work outside of acute care settings.

At one point, 250 employees were out with COVID-19 or were being tested, said Hugh Thomas, executive vice president, chief administrative officer and general counsel of Rochester Regional Health in Rochester, New York.

Thomas said the margins are not returning to pre-pandemic levels. Elective surgeries have just started to return.

"We're climbing out of it, but it's going to be a long haul," Thomas said.
Lack of reimbursement to cover costs is a threat to financial viability, said David Ramsey, president and CEO, Charleston Area Medical Center and Health System of Charleston, West Virginia.

Medicare pays, on average, 11% below cost, he said. 

COVID-19 patients have long inpatient stays of at least two and three weeks, compared to stays of days for other inpatients. 

"These are very, very sick patients," Ramsey said. "They're going to need a lot of complex care."

THE LARGER TREND

In 2020, COVID-19 cases and hospitalizations put intense pressure on hospital staff and resources with steep declines in non-COVID-19 patient volume leading to sharply lower revenues. 

An AHA report from last summer estimated total losses for the nation's hospitals and health systems to be at least $323.1 billion through 2020. In addition, at least four dozen hospitals entered bankruptcy or closed in 2020, Pollack said.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com