Hospital leaders, new report detail how persistent financial pressure on hospitals could threaten patients’ access to care

A new analysis prepared by Kaufman, Hall & Associates, LLC and released today by the AHA shows that total hospital revenue in 2021 could be down between $53 billion and $122 billion from pre-pandemic levels, jeopardizing their ability to care for their communities.

The report shows that such losses are not the only pandemic-borne concern for hospitals’ financial health, with hospitals and health systems forced to weather increased expenses for drugs, purchased services, labor and supplies.

“When we talk about financial challenges hospitals face, it’s more than dollars and cents – it’s about making sure that they have the resources needed to provide essential services for their patients and communities,” said AHA President and CEO Rick Pollack.

Judy Rich, president and CEO of Tucson Medical Center in Arizona, said on a call with media today that on top of nursing costs, which in some instances have jumped from $48 per hour to $150 per hour, her hospital is even funding a kindergarten-through-sixth grade school so staff can come to work.

“It feels like whiplash,” said Rich, a former member of the AHA Board of Trustees. “Finances are very important to us, but they have never been in the priority column. They’ve always been about serving our patients. So looking forward, we are concerned about our income, about our revenue. We will continue spending the costs we need to spend to care for our patients.”

David Ramsey, president and CEO of Charleston Area Medical Center and Health System in West Virginia, said challenges such as an “inadequate volume of patients coming back into the environment” coupled with low amounts of reimbursement have put a strain on his health system. “While the CARES Act [funds] were critically important in 2020, they did not negate the financial difficulties of the hospitals,” Ramsey said.

Hugh Thomas, executive vice president, chief administrative officer and general counsel for Rochester Regional Health in New York, said his system has experienced around $35 million of reduced revenue in the past two months alone. “Ultimately it is about keeping the lights on and paying our team who have been dramatically affected by this,” he said. Thomas also said that the health system has spent significant resources on the vaccine rollout in an effort to give shots to front-line workers and others in the first round of distribution.

An AHA report from last summer estimated total losses for the nation’s hospitals and health systems to be at least $323 billion through 2020.

Among other priorities, the AHA continues to urge Congress in the next COVID-19 relief legislation to provide significant funding for the Provider Relief Fund, which will allow hospitals to remain as key centers for COVID-19 vaccination outreach, planning, administration and distribution efforts.

“It's red alert time for the Provider Relief Fund, which has kept so many hospitals and other providers afloat during this past year,” Pollack said. “And if Congress doesn't act soon, hospitals just aren’t going to have the tools or resources to continue serving their patients in the midst of the pandemic.”