Hospital COVID-19 recovery stalled in August, Kaufman Hall says

Dive Brief:

  • U.S. hospital finances suffered a setback in August as recovery from the onset of COVID-19 stalled. Volumes, revenue and margins were all down when measured from January through last month and compared to the prior-year period, according to Kaufman Hall’s latest monthly flash report released Friday.
  • August operating margins were down 12% month over month and 18% year over year when funds from the Coronavirus, Aid, Relief, and Economic Security Act were excluded. With that money accounted for, the numbers were down 28% and 3%, respectively.
  • Adjusted discharges fell 3% month over month and are down 12% from a year ago. Emergency department visits are still seeing an especially drastic decline. They were down 16% year over year.

Dive Insight:

Hospital revenue losses had begun to improve after a devastating March and April, when the novel coronavirus disrupted lives all across the country. But after three months of progress, August was a bump in the road.

With admissions, outpatient and ER visits and operating room minutes all declining, hospitals struggled to control costs. Through August, the total expense per discharge is up 17% year over year.

“While the August numbers are concerning, they are not surprising. The road to recovery will be long and challenging, and fraught with ups and downs,” Kaufman Hall Publisher Jim Blake wrote in the report’s introduction. “Healthcare leaders cannot afford to be sidelined by such setbacks.”

Funding from the CARES Act has been a lifeline for hospitals, but industry leaders have said for months that it wouldn’t be enough. In July, the American Hospital Association asked Congress for another $100 billion to help alleviate “severe financial stress on physicians, nurses, hospitals and health systems.”

But Congress has failed to agree on a package and talks appear to have stalled.

Meanwhile, providers are trying to adjust to their new normal. That includes rapid transition to telehealth, patient flow changes and media campaigns trying to convince patients that it’s safe to resume regular care. 

Researchers have noted, however, that not all of the volume losses were necessarily needed treatment. As patients have slowly returned, there have also been varying demographic trends.