COVID-19 has punched a hole in the business models of the largest nonprofit hospital systems, according to a new report from Alvarez & Marsal.
Read the report here.
Some quick points:
The “Barometer of the Post-COVID Healthcare Economy: Financial Trends and Insights from the Top 25 Not-for-Profit Health Systems,” research and analysis found that:
- Net Patient Revenue plunged almost 20 percent from the fourth quarter of 2019 to the second quarter of 2020 as the country locked down.
- The infusion of federal CARES Act funding enabled revenue to recover at the end of the 2020 calendar year to a drop of just 3 percent from 2019 to 2020.
- Operating income declined 11 percent from 2019 to 2020.
- Discharges decreased 18 percent (4th quarter 2019 to 2nd quarter 2020) and 9 percent year to year (2019 to 2020).
- Patient Days dropped 13 percent (4th quarter 2019 to 2nd quarter 2020) and 4 percent year to year (2019 to 2020).
- Length of Stay increased 7 percent (4th quarter 2019 to 2nd quarter 2020) and 6 percent year to year (2019 to 2020).
- Surgeries fell 36 percent (4th quarter 2019 to 2nd quarter 2020) and 11 percent year to year (2019 to 2020).
- Emergency Room visits declined 31 percent (4th quarter 2019 to 2nd quarter 2020) and 17 percent year to year (2019 to 2020).
According to the report, the drop of almost 10 percent in inpatient discharges while the length of stay increased by six percent, suggests a higher level of acuity in admitted patients, presumably from sustained COVID-19 volumes. “What will be more telling, as health systems continue to recover, is the impact from declined surgical and emergent volumes, which are down 11 percent and 17 percent, year over year, and in particular, what actions we see on the part of health system executive teams to either ‘bring back’ or offset these deflated volumes”, said John McLean.
