Hospitals Struggle to Restart Lucrative Elective Care After Coronavirus Shutdowns
The shutdown of elective surgeries and other “nonessential” medical care by federal and state officials during the pandemic has left the nation’s 5,200 hospitals, particularly in places where there have been relatively few infections, with idle clinics, vacant operating rooms and a dearth of patients.
“Our hospitals, like every other hospital in the country, are half empty,” said Marvin O’Quinn, the president and chief operating officer for CommonSpirit Health, a Catholic system that operates 137 hospitals across 21 states.
As restrictions ease around the country, some states have begun allowing procedures unrelated to the coronavirus, like knee replacements, colonoscopies and mammogram screenings.
“As anyone waiting for an elective surgery knows, ‘non-urgent’ does not mean ‘minor,’” said Gov. Kate Brown of Oregon in allowing the state’s hospitals to resume business on May 1. “This is incredibly important medical care that we would not have told providers to delay if the threat of Covid-19 had not made it necessary.”
Once considered a bulwark during economic downturns, health care is proving vulnerable during the coronavirus-induced recession, with spending down and significant job losses. More than 1.4 million jobs in the sector were lost last month, part of a historic economic decline that included 20.5 million fewer jobs and an unemployment rate reaching nearly 15 percent.
Hospitals, often the biggest employer in cities and states, are furloughing workers amid industry losses that total as much as $50 billion a month, largely the result of forgone surgeries and procedures, according to some estimates. For many institutions, back surgeries and heart procedures provided a financial stream of revenue that was critical to staying open. The majority of the nation’s hospitals are nonprofit, but they still need a steady roster of patients to survive.
All hospitals rely on these elective surgeries for much of their revenue because both Medicare and private insurers tend to pay more for such procedures than they do for other kinds of hospital care. Hospitals say they are losing money when they treat Covid-19 patients because of the lengthy and intensive medical care these patients need. Health insurers like UnitedHealth Group, one of the nation’s largest, have said that the amount of money they are saving from the decline in elective care is now more than the amount they are reimbursing hospitals for treating the coronavirus.
And while Congress is funneling $175 billion in relief to hospitals, much of the money has flowed to the biggest hospital systems serving the highest number of Medicare patients. HCA Healthcare, the for-profit hospital chain, said it received $700 million. Rural hospitals, already ill-equipped to deal with the virus, and hospitals serving low-income patients have received much less. Some hospitals filing for bankruptcy are challenging federal rules that would prevent them from being eligible for small-business loans.
But even at hospitals with small numbers of coronavirus patients, reopening is likely to be a painstaking process as states and local governments take different approaches and hospitals grapple with how to keep patients and workers safe. Oregon Health & Science University Hospital, the state’s academic medical center with 562 beds, admitted fewer than 50 Covid-19 patients, and its occupancy rate fell to about 60 percent.
Under guidelines established by a state advisory panel, the hospital is beginning to reschedule patients while staying prepared if there is a sudden surge in new infections, said Dr. Renee Edwards, the chief medical officer. The hospital is also reaching out to patients who do not have the virus but whose conditions may significantly deteriorate if they do not get care.
“We are ramping up our surgical volume in phases, because we have to demonstrate that as we increase our surgical volumes, we’re able to maintain the available capacity in our hospital,” she said.
And hospitals are also trying to reconfigure spaces, isolating infected patients and those suspected of being infected in distinct units, and ensuring patients have enough physical distance from others. “Hospitals tend to be crowded places,” Dr. Edwards said.
While hospitals are eager to resume moneymaking elective services, which can account for roughly half of their revenues, by one estimate, hospital executives and consultants say they may be constrained by shortages of supplies and testing equipment as well as the need to make sure they have enough isolation gowns and intensive care beds.
“It is a big question mark: How quickly you can ramp up and how you manage it,” said Suzie Desai, who follows nonprofit hospitals for S&P Global Ratings.
Some hospitals are already reaching out to patients. “Now we’re on the other side of this and we have begun to re-engage people,” said Dr. Donald Yealy, the chair of emergency medicine at the University of Pittsburgh Medical Center, whose surgeries dropped as much as 70 percent because of the pandemic. Since restarting, the center says the number of surgeries they are doing for procedures like removing a tumor has already started to rebound.
But the specter of second waves of the virus and a fear of contagion may deter patients from returning, especially to those hospitals that have treated large numbers of coronavirus patients. “Even if we reopen, will they come?” said Matthew Murer, the chair of the health care practice of Polsinelli, a law firm.
That question is hardly rhetorical for small and large medical centers, which have reported staggering declines in revenue. Hospitals say they are losing an estimated $50 billion a month, according to a recent analysis by the American Hospital Association, which predicts a four-month loss of $200 billion by the end of June.
Canceled surgeries, decreases in doctor’s visits and a decline in emergency room care account for the bulk of the losses, some $160 billion.
Hospitals could find themselves in a Catch-22, where they do not have enough money for the supplies and staff necessary to restart the elective procedures they need to generate cash, said Christopher Kerns, an executive with Advisory Board, a consulting unit owned UnitedHealth Group, the giant insurer. “If hospitals can’t start earning revenue, they will close,” he said.
At Stamford Health, a 305-bed hospital in Connecticut that is not part of a larger system, much of the focus over the last few weeks has been on caring for more than 500 Covid-19 patients as the hospital more than tripled the number of intensive care beds it was operating. About 350 of the Covid-19 patients have since been discharged.
With cases stabilizing, and the hospital losing roughly $25 million a month, Kathleen Silard, the chief executive of Stamford Health, is eager to resume offering the procedures she describes as “our lifeblood.” Stamford has so far received $40 million in federal funds, including money aimed at hospitals in coronavirus hot spots, and has furloughed 375 of its workers.
But Ms. Silard says she, too, will be cautious, making sure the hospital has enough personal protective equipment and personnel before she fully resumes operations. “It’s not going to be a switch-on, switch-off situation,” she said.
While the hospital will continue to perform emergency surgeries, it may hold off on complicated cases like open-heart surgeries, which require a lot of protective equipment and supplies, if patients can wait, she said.
“The logical step is to do the least invasive procedures,” agreed Mr. O’Quinn of CommonSpirit.
Some executives and consultants warn there could be shortages like the ones that created the mad scramble for masks and gowns back in March. Supply disruptions are “going to contaminate the ability to stand up elective procedures,” said Kenneth Kaufman, one of the founding partners of Kaufman Hall, which advises hospitals.
And hospitals also have to ramp up coronavirus testing of patients scheduled for surgeries to reduce the risk of spreading the virus to hospital staff and other patients. A recent survey by Premier, which buys medical supplies on behalf of many U.S. hospitals, suggests hospitals would have to more than triple their current testing capacity to begin resuming their services.
Given the high demand, hospitals could have trouble getting swabs and testing reagents. While officials from the Federal Emergency Management Agency have said they will be providing supplies to state governments, it is not clear how the products will be distributed, said Meg Wyatt, an executive with Premier. “Our health systems are flying blind to develop a ramp up plan,” she said.
The agency says state governments determine the distribution of the supplies within their state.
In former hot spots, hospitals that have treated large numbers of coronavirus patients may have the hardest time convincing people to come in for something routine.
“Hospitals are safe, Rush is safe,” said Dr. Omar Lateef, the chief executive of Rush University Medical Center, which says it treated Covid-19 patients at the same time it was caring for patients without the virus who had urgent medical needs.
“We have not had an infection travel from a Covid patient to a non-Covid patient in our hospital,” Dr. Lateef said.
But he acknowledges some people will be frightened by images of overrun hospitals and very sick patients with the coronavirus. “It’s human,” he said. “People are scared to go out right now. People are scared to give each other a hug.”
Many hospital executives say they are also fearful of what will happen if there are future waves of infection in their community that result in a repeat of March with high numbers of seriously ill patients that require another shutdown.
“Everyone is talking about a second wave,” said Mr. O’Quinn. “I don’t think the country can shut down in a second wave. Hospitals can’t afford to shut down in a second wave.”