{"id":12880,"date":"2020-10-06T01:31:24","date_gmt":"2020-10-06T06:31:24","guid":{"rendered":"https:\/\/www.billingparadise.com\/blog\/?p=12880"},"modified":"2026-03-11T07:10:58","modified_gmt":"2026-03-11T12:10:58","slug":"hospital-finances-have-taken-may-continue-to-take-a-meteor-sized-hit-in-2020","status":"publish","type":"post","link":"https:\/\/www.billingparadise.com\/blog\/hospital-finances-have-taken-may-continue-to-take-a-meteor-sized-hit-in-2020\/","title":{"rendered":"Hospital Finances Have Taken & May Continue To Take A Meteor Sized Hit In 2020"},"content":{"rendered":"

COVID-19 has decimated the entire economy. The economy has never been negatively impacted to this extent. Prior to COVID-19, the single worst recession event we ever faced was during the The Great Depression. But if we compare the losses of livelihood and financial cripplement of business to the situation we are in now, the Great Depression\u2019s numbers can best be described as peanuts. The unprecedented rise of evictions, sky-rocketing, numbers of unemployment, drastic increase in the number of uninsured and worst of all the ever increasing death toll. This pandemic has impacted all of us in such a profound way that it changed our entire outlook on life.<\/span><\/p>\n

Compared to all the businesses in general, the healthcare sector has probably been the most impacted by the pandemic. Sure there have been technological advances in the field because of the pandemic, but the revenue stream generated from virtual services pales in comparison to the revenue hospitals and health systems get from elective procedures and normal operations. Majority of the hospitals have structured their finances in such a way that the revenue from elective procedures act as a linchpin. So when the linchpin fell, no one could stop the cascading negative effect it had.\u00a0<\/span><\/p>\n

Some Health systems’ quick transition to virtual services such as telehealth and remote patient monitoring did help offset some of their losses, but it did not really help to the extent it was supposed to. It acted as lifeline yes, but a lifeline tethered to a hurricane. No one could predict if and till when the temporary guidelines will exist and this caused a lot of hestatitation among small practices and as a result their business is in a state where it is irrevocable.\u00a0<\/span><\/p>\n

One needs to understand that hospitals<\/a> and health systems barring a few exceptions, were not doing all well before the pandemic. In fact this downtrend of losses started long before the pandemic. A lot of hospitals were in debt and were hemorrhaging money and were barely keeping it together. Some of the fortunate hospitals managed to pull through quarter after quarter with the help of private equity companies. Apart from that a lot of healthcare systems were already staring at the edge of a cliff and COVID-19 has acted as the final push into the abyss.\u00a0<\/span><\/p>\n

The only solid deterrent we have had against the financial losses has been the aid received from the CARES ACT. It has greatly helped hospitals get a better handle on the situation. However, regardless of whether the hospitals started virtual services or not and regardless of the funds from CARES ACT, experts say that if the current trend of COVID-19 spread continues then the majority of the hospitals in the country are looking at negative margins financially.\u00a0<\/span><\/p>\n

In order to get a better understanding of how bleak the current situation is and to get a better grasp of how much more devastating it can be, The <\/span>American Hospital Association<\/span><\/a> (AHA) released an <\/span>analysis<\/span><\/a> report\u00a0 on July 21. The analysis was carried out and prepared by <\/span>Kaufman, Hall & Associates<\/span><\/a>. The infographic below illustrates the result of that analysis.<\/span><\/p>\n<\/div><\/div>[vc_single_image image=”12881″ img_size=”full” alignment=”center”]<\/div><\/div><\/section>

Conclusion<\/h3>\n<\/div><\/div>

From the infographic we can conclude the following:<\/h3>\n