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Dear Readers,
Our nation’s hospitals are caught in a perilous situation. At the same time that they are serving as the frontlines for the battle against a highly contagious and unpredictable virus, their financial viability is being threatened.
April was the worst month ever for hospitals financially, as shown in this month’s National Hospital Flash Report. The report provides vital insights to just how devastating the pandemic has been thus far, driving steep volume and revenue declines and stubbornly high per-patient expenses for hospitals nationwide. The damage has been swift, pushing the median hospital Operating Margin to –29%, down 326% below budget in April—hospitals’ first full month battling the effects of the COVID-19 pandemic.
April’s steep losses came despite aggressive cost-cutting efforts at individual hospitals. The loss of elective and non-urgent procedures has been a major damaging factor. Yet, even as many states look to restart non-urgent procedures, there is widespread uncertainty as to when patients will return. Research indicates that, along with mandated sheltering and hospitals’ COVID-19 inpatient populations, patient behavior was a significant driver of volume. According to May 2020 Kaufman Hall consumer research, 60% of adults were concerned about the coronavirus directly affecting their health or the health of a family member or other loved one, and nearly 40% said they would be uncomfortable seeking care at a hospital as restrictions ease.
Kaufman Hall continues to track hospital performance to help organizations keep a pulse on this rapidly evolving situation. Next month’s report will provide additional data, incorporating insights into how the pandemic is affecting other outpatient services, such as physician practices and senior care services.
The COVID-19 pandemic is the defining challenge of our times. If these trends continue at our hospitals, the domino effect on the nation’s economy and the broader healthcare system could be catastrophic.
Sincerely,
Jim Blake
Managing Director and Publisher
Kaufman Hall
See Kaufman Hall’s Coronavirus page for regular updates.
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