AHA Report: Covid-19 will cost hospitals more than $200B

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Hospitals are expected to lose more than $200 billion as a result of the Covid-19 pandemic, according to a report released Tuesday by the American Hospital Association (AHA). The report came out as hospitals are pushing for additional funding from Congress to cover support for healthcare workers and treatment costs for uninsured patients.

Congress initially set aside $100 billion for hospitals as part of the CARES Act. HHS has made plans for where it will distribute the majority of those funds, including some targeted payments to hospitals in Covid-19 hotspots and rural hospitals.  Congress has since allocated another $75 billion for hospitals.

“While we appreciate the support and resources from Congress and the Administration, many hospitals are still on the brink,” AHA CEO and President Rick Pollack said in a news release. “We need further support and resources to ensure that we can continue to deliver the critical care that our patients and communities are depending on while also ensuring that we are prepared for the continuing challenges we face from this pandemic as well as other potential emergencies.”

According to the new AHA report, hospitals are estimated to see a total of $202.6 billion in losses between March 1 and June 30. This figure includes the cost of treating Covid-19 patients, inflated expenses for personal protective equipment and lost revenue from cancelled non-emergency procedures. It also includes additional services hospitals are providing healthcare workers, such as childcare, housing and transportation.

Here’s the breakdown of those estimates:

Cost of treatment: $36.6 billion
Looking at the cost of treatment alone, the AHA estimates it will cost hospitals a total of $36.6 billion over the four-month period. This figure was calculated based on the total number of expected hospitalizations over a four-month period, along with cost estimates for hospitalization and expected reimbursement rates from private and government payers.

Cost of cancelled services: $161.4 billion
The cost of cancelled services is expected to be a much bigger financial hit. Hospitals were asked to pause elective surgeries — a major source of hospital revenue — to protect patients and conserve PPE. The lost or delayed procedures are expected to cost hospitals a total of $161.4 billion over four months. These models assumed cancellation of 67% of emergency services and 50% of non-emergency services.

Cost of additional PPE: $2.4 billion
With soaring demand for masks, gloves and other supplies, prices have increased accordingly. The Society for Healthcare Organization Procurement Professionals estimated that the cost of certain medical supplies has increased tenfold, and hospitals in New York City reported paying four times the usual price for gloves and 15 times the usual price for masks.

Cost of support services: $2.2 billion
This figure estimates the cost of providing support to healthcare workers located in Covid-19 hotspots, including childcare, housing, transportation, Covid-19 screening and treatment.

   Photo credit: Getty Images, utah778



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