President and CEO, American Hospital Association
COVID-19 has created the greatest financial crisis in history for hospitals and health systems as revenues continue to sink, expenses continue to soar, and the number of uninsured continue to grow. Overall, COVID-19 will claim responsibility for an utterly unsustainable $202.6 billion in loses just through June.
As the pandemic threatens to puncture society’s ultimate safety net, many hospitals and health systems must rely on reserves to maintain their stability. Many of these organizations have losses as high as $350 million a month. Federal funding distributed thus far fails to make up for the shortfalls, while government programs – which comprise significant hospital volume – traditionally pay less than the cost of providing patient care services.
In addition to the fact that these funds have been depleted because of negative investment returns brought on by the current economic climate, the article also omits critical information regarding the rigid restrictions these funds often carry. Along with the role of reserves in powering the research behind cutting-edge technologies that improve care, reserves must also be maintained at certain levels to secure solid bond ratings and avoid defaults.
This unprecedented crisis continues to underscore that America’s hospitals are the only place in the health care system where the doors are always open. As we continue to fight the pandemic and as we prepare for a potential next wave, the resiliency of America’s hospitals is the best defense for the health of our nation.