Hospitals are in danger of closing as a result of the financial losses they’ve suffered due to the ongoing COVID-19 pandemic, according to a new report from the American Hospital Association.
The association is projecting that hospitals will lose at least a staggering $323.1 billion in revenue this year, as the pandemic drives up prices for key equipment and supplies while also cutting off certain dollar generators for hospitals. However, these losses are based on the assumption that hospitals and health systems will see “patient volumes return to baseline levels by July 2021,” the AHA report said.
The revenue loss hospitals are experiencing is being caused by multiple factors. For instance, state governments have implemented multiple restrictions that have halted non-emergency procedures while also requiring hospitals to maintain a certain level of personal protection equipment and a certain number of vacant beds.
Hospitals have also had to pay more due to drug shortages, increased hours for workers, and more equipment and supplies outside of PPE.
“While the financial impacts estimated in this report are comprehensive, they may under-represent the full financial losses hospitals will face in 2020,” the AHA report said. These projected losses do not account for the rising number of coronavirus cases in states like Arizona, Florida and Texas.
The AHA noted that hospitals did get some financial relief from the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act the U.S. government enacted earlier this year — approximately $54.6 billion of the money in the CARES Act went to hospitals. But that wasn’t enough, the AHA said.
“Though significant, this amount represents just a fraction of the total financial losses already experienced by hospitals, and these losses are likely to continue to grow,” the AHA report said. “Therefore, more financial support is urgently needed to safeguard America’s hospitals and health systems.”
The association urged policymakers and others to “carefully consider the unprecedented financial pressured faced by our nation’s hospitals and health systems.” Without additional aid, hospitals might close if they suffer further losses.