April 2020
National Hospital Flash Report
Based on March Data from Over 800 Hospitals
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Dear Readers,
At 7 p.m. each evening, residents in cities like New York and Chicago stand at their windows and balconies, cheering the nation’s frontline healthcare workers. It’s a moving expression of unity and much-deserved gratitude that has been replicated in cities worldwide to honor the brave men and women risking their own health and safety every day to save lives and stem the spread of COVID-19. Their efforts are taking a great toll on them personally, and we owe them our deepest thanks.
At the same time, fighting the virus is taking a financial toll on the hospitals where these healthcare professionals do their heroic work. The graph below shows how the pandemic completely upended the financial health of the hospital industry in a matter of just 2-3 weeks in March. The long red bar illustrates the rapid descent hospital margins took in March compared to average monthly margin changes over the past two years.
Real Data. Real Insight. Real Time.
Widespread cancellations of elective procedures were the major driver of these negative impacts, as hospitals prepared for an influx of COVID-19 patients. These elective procedures—such as joint replacements and non-emergent heart surgeries—are the profitable revenue sources that balance losses from many other acute care services.
As a result, March saw hospitals’ already-thin margins plunge into the red, as volumes and revenues fell, and organizations incurred the expenses of building staff, supplies, and capacity in preparation for a surge of coronavirus patients. We anticipate April will be significantly worse, and at this point, no one knows how long hospitals will continue on their current path.
One thing is certain—the nation cannot afford to let its hospitals fail. Not only are hospitals the frontlines for the battle with COVID-19, but healthcare also accounts for 18% of U.S. Gross Domestic Product. Hospitals account for a third of that, employing more than 7 million people. Without financial support, hospitals’ abilities to help will be impaired, some hospitals will be forced to close, and many healthcare workers will lose their jobs. The societal, economic, and public health impacts will be dire.
Our healthcare workers are risking so much to keep us safe. Just as we need them now more than ever, they need us more than ever to provide the financial stability to enable them to continue their critical work in the ongoing fight against COVID-19, and to be fully prepared for other, as-yet unknown future healthcare threats.
Sincerely,
Jim Blake Managing Director and Publisher
Kaufman Hall
See Kaufman Hall’s Coronavirus page for regular updates.
©2020 Kaufman, Hall & Associates, LLC
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National Hospital Flash Report
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