As Congress continues to deliberate President Biden’s $1.9 trillion COVID-19 relief package, with House approval expected Friday, a new report from financial consulting firm Kaufman Hall paints a troubling picture of the financial toll the pandemic has taken on hospitals.
The report forecasts that total hospital revenue in 2021 nationwide could be down as much as $122 billion from pre-pandemic levels, at a time when hospitals and health systems continue to have significant increases in expenses due to COVID-19. Under a best-case scenario that assumes a complete recovery of patient volume, smooth vaccine distribution, and a continued nationwide reduction in COVID-19 cases, hospitals and systems would lose some $53 billion in 2021.
These losses come on top of the historic financial crisis that hit last year, with an estimated drop of at least $323 billion nationwide through 2020, including conservative estimates for California’s hospitals of a more than $14 billion loss.
This underscores the need for immediate relief for hospitals and health systems, as they begin caring for a backlog of patients whose treatment was delayed due to the pandemic. It also reinforces the need for long-term, structural investments in hospitals, as failure to strengthen the backbone of the nation’s public health infrastructure will only further weaken any gaps that COVID-19 has exposed.
CHA will continue to share with federal representatives how California’s hospitals are coping with these challenges, and we encourage you to continue to share your own experiences as the House and Senate negotiate the details. As this package moves through the expedited budget reconciliation process, it must be completed by the end of March, so there is a relatively small window to make changes that will benefit the patients and communities you serve.
With legislators’ attention already turning toward what our health care system looks like on the other side of COVID-19, it’s vital that we patch the holes the pandemic has created as we build a stronger version for the future.