A global pandemic has not done any favors for hospitals across America, as lifelines for countless communities across the country now find themselves on financial life support.
Deborah Wilson is the CEO of Lawrence General Hospital outside of Boston. The hospital has served as a vital lifeline for this community hit hard by the pandemic. But in 2021, they are expected to lose about $20 million in revenue.
“Before COVID, we had a weak balance sheet. Now, we’ve lost volume and are dealing with increased expenses because of COVID,” Wilson said in a recent interview via Zoom.
With those kinds of losses, the hospital is being forced to implement $6 million in cuts. Last month, Deborah Wilson made the painful decision to lay off nearly 60 staff members.
But Lawrence General is far from the only hospital left in financial distress by the pandemic.
Many hospitals are being asked to repay emergency Medicaid reimbursements they were granted during COVID-19. There have also been delays in disbursing COVID-19 relief money that was allocated by Congress as part of the CARES Act.
“We have not received any federal or state relief since July of 2020, so it’s a very serious financial situation for us right now,” Wilson noted.
By some estimates, hospitals nationwide could still be looking at $53 billion in lost revenue for 2021.
Ken Kaufman is an industry expert. While the pandemic appears to be winding down, he says many hospitals still aren't seeing the volumes of patients they need to stem their financial bleeding.
“We’ve had a very uneven recovery in the hospital world, revenues are flat and expenses are up,” he noted.
Hospitals are also being squeezed in other ways. Labor costs are up by about 14%, supply costs are up nearly 13% and drug expenses have inflated by nearly 17%. Costs that are all getting passed down to struggling hospitals.
In 2020, nearly 47 hospitals were forced to close or go into bankruptcy because their financial situations were too dire.
When asked if Americans should expect to see any more hospitals closing in 2021, Kaufman responded, “I don’t think there’s any doubt about it.”