Hospitals Lose Money, Volume as Covid Fears Keep Patients Away

An estimated 28% of U.S. hospitals are losing money amid growing declines in admissions and patient visits due to rising Covid-19 infection rates, according to new industry data.

As of Nov. 7, hospital admissions, observation visits, and emergency room and outpatient visits were falling at more than twice the rate of a previous 30-day reporting period, according to data from Strata Decision Technology, which provides financial analytics for the health-care industry. The patient encounter data also showed hospital visits declining for each of 28 types of illnesses over a two-week period ending Oct. 17.

The company told Bloomberg Law that another analysis found 21 of 76 hospital systems—28%—had negative operating margins as of September. The 76 hospital systems represent more than 360 hospitals and provide a nationally representative sample.

The findings suggest patients are, once again, shunning hospitals to avoid Covid-19 infection, said Strata’s CEO, Dan Michelson. That could stall or even derail hospital efforts to regain revenue that was lost during the pandemic moratorium on non-emergency surgeries and procedures.

Michelson said the situation will only worsen this winter as hospital emergency rooms continue to fill with Covid-19 patients.

“There’s no question that when Covid admissions go up, inpatient volume and procedure volume goes down,” Michelson said.

Calls for More Aid

The American Hospital Association estimates that hospitals will lose more than $323 billion from March 2020 through December 2020 due to Covid-19. Hospital admissions have rebounded since the pandemic started, but will likely be 10.5% lower than predicted for 2020, a Kaiser Family Foundation study estimated.

The Strata data is “further proof that America’s hospitals and health systems are facing the biggest financial crisis in the history of our field,” Aaron Wesolowski, vice president, policy research, analytics, and strategy at the American Hospital Association, said in a statement.

Wesolowski urged Congress to provide needed assistance. During the lame duck session, the AHA is calling for more money for the CARES Act provider relief fund, full forgiveness on more than $85 billion in advance Medicare payment loans to hospitals, and elimination of the 2021 sequestration cut in Medicare payments.

“While we appreciate the support from the Administration and Congress, we need further help to meet the challenges of the COVID-19 pandemic and stay afloat to continue our mission of caring for patients and communities,” Wesolowski said.

In a letter to congressional leaders on Thursday, Chip Kahn, president and CEO of the Federation of American Hospitals, echoed the call for sequestration relief, more provider relief fund money, and a new Covid relief package.

“The nation’s hospitals and caregivers will not relent until this pandemic is over, but we need Congressional action now,” Kahn said in the letter.

Outpatient Visits Take a Tumble

After declining by 1% over a 30-day period ending Oct. 24, inpatient admissions were down 2.4% in the 30-day period ending Nov. 7, according to Strata’s data from 295 hospitals in 36 states.

Observation visits, down 0.5% as of Oct. 24, declined by 5.1% over the same 30-day period. Emergency room visits, down 1.1% as of Oct. 24, fell by 2.8% as of Nov. 7. Meanwhile, outpatient visits went from a 2.2% decline to a 5.8% reduction over the previous month.

The slowdown is likely associated with older people who comprise the bulk of elective procedure patients, Michelson said.

“They’re scared to get together with their family right now, much less to go into a hospital. So if they can put off a colonoscopy for six months, they will,” Michelson said. “Especially now that there’s news of a vaccine on the way. They’re all trying to play it safe.”

Hospital inpatient and outpatient visits declined for 28 different specialty areas during a two-week period ending Oct. 17, the data show. In the previous study period—Sept. 9 to Oct. 3—patient volume increased in 15 of the 28 specialty areas and declined in 13 others.

Patient visits for orthopedic, spine, and neonatology services saw the largest declines in the new data, down 14.8%, 11.9%, and 11.4% respectively from the previous two-week reporting period. But visits for gynecology, cardiology, cancer, and breast health also trended downward.

“And we think that’s going to get worse because Covid is starting to crowd out other services from being able to be done in many hospitals,” said Steve Lefar, executive director of StrataDataScience, a business unit of Strata.