AHA Makes Case for More Government Bailouts

Report warns that without more government money, half of all hospitals may be operating in the red in the second half of 2020.

The American Hospital Association on Tuesday issued a stark new analysis projecting that the nation's hospitals will book margins of -7% for the second half of 2020 unless the federal government steps in with more emergency funding.

AHA President and CEO Rick Pollack said hospitals were already challenged financially before the coronavirus pandemic flattened patient volumes.

"This pandemic is the greatest financial threat in history for hospitals and health systems and is a serious obstacle to keeping the doors open for many," Pollack said.

The new analysis, prepared by Kaufman, Hall & Associates, LLC, detailed the financial straits that hospitals are facing during the pandemic, and noted that:

• Without federal funding, hospital margins would have been -15% in Q2. Margins are still expected to drop to -3% in Q2. Before COVID-19, the median hospital margin was 3.5%.
   
• In the best-case scenario, which assumes a slow and steady decrease in COVID-19 cases, median margins could be -1% by Q4.
   
• Under a more dire scenario of periodic COVID-19 surges, margins could sink to -11%.

The AHA in June estimated that hospitals could lose more than $323 billion in 2020, owing to tanking patient volumes because of the pandemic.

So far, the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act have doled out more than $175 billion in relief funds to hospitals and other providers, especially those disproportionately affected by the pandemic, including a $10 billion aid package that the Department of Health and Human Services began disbursing on Monday.

"While we appreciate the support from the Administration and Congress, we need further help to stay afloat to continue our mission of caring for patients and communities," Pollack said.