Report: Financial pressure on hospitals and health system could threaten patient access to care

A new report by Kaufman, Hall & Associates, LLC has found that the COVID-19 pandemic will continue to affect the financial health of hospitals and health systems through 2021.

The report released by the American Hospital Association (AHA) Wednesday forecasts total hospital revenue in 2021 could be down by between $53 billion and $122 billion compared to pre-pandemic levels. The financial pressure, the report said, could jeopardize hospital’s ability to care for their communities during the pandemic, resulting in a slowdown in vaccine distribution and administration, continued pressure on front-line caregivers, and diminished access to care.

“When we talk about the historic financial challenges hospitals face, it’s about more than dollars and cents, it’s really about making sure hospitals and health systems have the resources needed to provide essential services for their patients and communities,” AHA President and CEO Rick Pollack said. “During the pandemic, people have put off needed care, in some cases to the detriment of their health. In addition, the costs of labor and supplies have increased, adding to financial stress. Vaccines give us hope that the end is in sight, but hospitals need additional support to continue to provide access to care and to help get as many vaccine shots into arms quickly.”

If hospitals experience a consistent and complete recovery of patient volumes, and vaccine distribution and administration go smoothly, and the country continues to see a drop in COVID-19 cases, hospitals and health systems would face $53 billion in total revenue losses this year. However, if patient volumes recover slowly, vaccine rollouts continue to face logistical challenges and delays, and the country sees more COVID-19 surges, hospitals could face a total of $122 billion in lost revenue.

In 2020, an AHA report found that hospitals and health systems lost at least $323.1 billion due to patient volume decreases and COVID-19. At least four dozen hospitals entered bankruptcy or closed in 2020, according to Bloomberg.

Liz Carey

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