Colorado’s hospitals hurting financially after COVID-19 and federal payments not enough

Most Colorado health care providers received less than $4,000 in federal funds meant to partly offset their losses due to COVID-19, and even the winners who got far more say the payments haven’t come close to filling their revenue gaps.

The $2.2 trillion economic stimulus bill passed in March included $50 billion for health care organizations, with billions more for specific groups, like rural providers or nursing homes.

Colorado received about $808 million from the general distribution, which was divided among 4,430 outpatient providers, hospitals, emergency response organizations and municipalities. The median payment was $3,940, meaning half of recipients got more and half got less.

The payments ranged from a high of $79.3 million for the University of Colorado Hospital Authority to a low of $1 for a pharmacy in Ignacio, with 27 providers getting $10 or less.

Even the larger payments didn’t fully cover revenue losses from COVID-19, though.

Dan Weaver, spokesman for UCHealth, said the health system lost about $176 million in revenue in March and April as non-emergency procedures were canceled, and could lose more if patients continue to delay care. The system has received a combined $97.5 million, but still needed to ask some employees to take time off this summer, he said. Some executives also gave up their paid vacation time.

“Though the federal assistance has not fully covered our losses, we do appreciate the support which has helped us avoid furloughs, support our employees and continue providing excellent care for our patients,” he said.

Smaller hospitals also recovered only a portion of what they lost. Many rural facilities were exempt from an order halting non-emergency procedures this spring, but put them on hold anyway because they needed to conserve protective equipment in case of local coronavirus outbreaks, said Michelle Mills, CEO of the Colorado Rural Health Center.

The payments have been an important lifeline for rural providers, including the 18 hospitals already operating at a loss before the pandemic hit, Mills said. While none are in imminent danger, it’s possible some could close before the pandemic is over, because the number of procedures likely won’t rebound quickly, she said.

“We’re not really sure what things are going to look like,” she said.

Little funding for children’s care

Hospitals that treated few or no COVID-19 patients also faced substantial losses.

Children’s Hospital Colorado received about $22.1 million, but estimated it lost about $100 million. If revenue declines continue as projected, the federal funds will only offset about 9% of this year’s losses, said David Biggerstaff, executive vice president and chief operating officer for Children’s.

Much of the general federal funding was distributed based on a formula using how much care facilities normally provided to Medicare patients. Typically, children are only eligible for Medicare if they have end-stage kidney disease, which is rare.

A $15 billion pot was available for providers who didn’t get a piece of the $50 billion in general funding, including children’s hospitals, but it was only intended to cover about 2% of the revenue a hospital normally would get from patient care.

Only 148 of the more than 6,000 people hospitalized in Colorado for coronavirus were younger than 20, but Children’s still had extra expenses from expanding telemedicine, setting up a lab for coronavirus testing and collecting plasma from survivors as a possible treatment, Biggerstaff said. The lab processes tests from other facilities, as well as in-house samples, and the plasma program primarily benefited hospitals trying it as a treatment for adult patients, he said.

Any future payments should consider the needs of children’s hospitals, because they’ve been hit hard by revenue losses and don’t turn away families who can’t pay, Biggerstaff said.

“Adult systems and Medicare providers have been given more opportunities then children’s hospitals to offset these devastating losses,” he said.

Smaller pediatric providers have had difficulty getting the payments at all, said Dr. David Keller, a board member of the Colorado chapter of the American Academy of Pediatrics. Most got nothing from the first funding rounds, because they don’t treat any children on dialysis, while others received a minimal check, which then excluded them from more substantial help that became available in June and July, he said.

“There was this tiny amount, and they didn’t know where it was coming from,” he said.

The pandemic has been particularly hard for pediatric practices, because children who weren’t in school didn’t need treatment for common illnesses like flu, Keller said. Now schedules are starting to fill up again as parents schedule routine check-ups during the summer, and some providers don’t have time to work through the glitchy process of applying for financial help, he said.

“A lot of people don’t have the energy to do it right now,” he said. “Practices are strapped. Everybody’s stressed.”

More stimulus could face uphill battle

Trade groups representing hospitals, doctors and nurses have asked Congress to appropriate at least $100 billion more to offset the costs of extra protective equipment, staffing and temporary facilities in areas dealing with outbreaks, and to compensate providers for reduced revenue from canceling procedures and seeing fewer patients.

It’s not clear what the odds of such a large package passing are, though. A Democratic proposal for another stimulus bill includes $100 billion, while the Republican proposal would set aside $25 billion.

Lawmakers in Congress are working on another aid package. Democrats approved a $3 trillion proposal in the House, while Republicans are negotiating on a $1 trillion counteroffer in the Senate.

“]

Peter Banko, president and CEO of Centura Health, which owns the five Adventist hospitals near Denver, said the next round of stimulus, if one passes, should be tailored to address how the pandemic is impacting communities differently. The business unit including the five Adventist hospitals received about $24 million in relief funds, but lost about $80 million from March to June, not counting the cost of buying protective equipment, retrofitting rooms to contain the virus and giving bonuses to frontline employees, he said.

Nikki Sloup, spokeswoman for SCL Health, said that if additional stimulus passes, it would be best to focus on funding testing, contact tracing, personal protective equipment for essential workers and supplies to administer a vaccine when it becomes available.

Saint Joseph Hospital, owned by SCL, was one of the top recipients in Colorado, with $11.5 million from the general distribution and $12.9 million from a “hotspot” fund for hospitals that treated more than 100 people for COVID-19 by April 10.

Sloup estimated Saint Joseph  spent about $3.5 million to prepare for coronavirus patients, not counting staff time, and lost about $37 million by not providing the normal mix of care.

“Volume has recently started to recover but it has not fully restored to normal levels,” she said.

Join our Facebook group for the latest updates on coronavirus in Colorado.

Source: Read Full Article