Dear Readers, We now are six months into the pandemic that has rocked healthcare infrastructures and economies across the globe. With more than 5 million cases and counting in the U.S., COVID-19 continues to place intense demands on the nation’s healthcare system. Hospitals and health systems have been hit hard by low volumes, high per-patient costs, and staggering revenues.

While the last few months have shown some signs of incremental progress, organizations have a long way to go to recover from devastating losses in the early months of the pandemic, as shown in this issue of the National Hospital Flash Report. A look at year-to-date performance results illustrates the difficult road ahead. In the first seven months of 2020, hospital Operating Margins have plummeted a full 96% or 842 basis points since the start of 2020 compared to the same seven-month period in 2019, not including federal CARES funding. Even with the funding, Operating Margins still are down 28% or 90 bps year-to-date compared to January-July 2019.

Patient volumes have shown some improvement over the last couple months, but remain well below 2019 levels. Adjusted Discharges are down 13% year-to-date, Adjusted Patient Days are down 11%, and Emergency Department volumes are down 17% compared to January-July 2019. While some hospitals have seen an uptick in surgery volumes due to a backlog in demand from the shutdown of non-urgent procedures in March and April, Operating Room Minutes remain 15% below 2019 levels year-to-date.

Gross Operating Revenues have fallen 8% year-to-date, while Inpatient Revenue is down 5% and Outpatient Revenue is down 11%, not including federal aid. Meanwhile, hospitals have seen Total Expense per Adjusted Discharge jump 16%, Labor Expense per Adjusted Discharge jump 18%, and Non-Labor Expense per Adjusted Discharge jump 15% in the first seven months of 2020.

Many unknowns persist surrounding COVID-19 and its impacts in the coming fall and winter months—including a very real possibility of the need for additional lockdowns to stem the virus’s spread. The combination of these factors continues to create significant volatility for hospitals and health systems nationwide, and profound uncertainty about their future viability. Thanks,