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Analysis

Northeast Hospitals Saw Revenue Drop by More Than 25% in Mid-March Due to Coronavirus

By Jack O'Brien  
   May 12, 2020

Patient discharges also fell by 40% in the third week of March, according to a new FAIR Health study.

Large hospitals in the Northeast experienced revenue declines over 25% in the third week of March as a result of the coronavirus disease 2019 (COVID-19) outbreak, according to a FAIR Health study released Tuesday morning.

Patient discharges at Northeast provider organizations with more than 250 beds also fell by 40% in the third week of March, according to the study.

The report analyzed the financial performance of hospitals during the third week of March because that's when an influx of patients infected with COVID-19 became "commonplace" in the Northeast.

Beyond the regional impact, large hospitals across the country suffered a 16% revenue drop during the same period.

However, midsize facilities with between 101 to 250 beds saw a "less pronounced" average per-facility revenue decline, while the gap was "not evident" in facilities with less than 100 beds.

Related: A Quarter of Rural Hospitals at 'High Risk' of Closure, COVID-19 Likely to Make it Worse

"With this second study, we again use our data repository to shed light on the impact of COVID-19," Robin Gelburd, president of FAIR Health, said in a statement. "As the pandemic continues to test the entire healthcare system, FAIR Health seeks to provide data and analysis to support all the system's participants."

For hospitals in the Northeast, the "outpatient share of the distribution of estimated in-network amounts by settings decreased relative to the inpatient share" was "more pronounced" compared to the national average.

Related: Two-Thirds of Health Systems Report CARES Act Payments Cover Less Than a Week of Revenues

The FAIR Health analysis is the latest study to examine the severe financial damage suffered by health systems as a result of the temporary cancelation of elective procedures to handle patients infected with COVID-19.

According to a recent Crowe LLP report, outside of New York City and San Francisco, hospitals across the country are losing approximately $1.4 billion in net revenue per day due to the pandemic.

The report indicated that hospitals would face financial challenges going forward, estimating that the average hospital will "need to run at 110% of previous capacity for six months straight" to recoup lost revenue.

Related: Excluding NYC and SF, Hospitals Losing $1.4B in Revenue Per Day Due to COVID-19 Pandemic

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: JERSEY CITY, NJ - MAR 30, 2020: The USNS Comfort Hospital ship sails pass the World Trade Center rising into the clouds in New York City to offload patients during the Covid-19 Pandemic. / Editorial credit: Evan El-Amin / Shutterstock.com


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