Hospital Coronavirus Costs Will Soon Top $200B, AHA Says

By Jeff Overley
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Law360 (May 5, 2020, 11:19 PM EDT) -- The American Hospital Association projected Tuesday that COVID-19 will cost the nation's hospitals $200 billion by mid-2020, a likely indication that Congress will soon face pressure to provide even more cash infusions to the industry.

The AHA's forecast covers March 1 through June 30. Its prediction of a financial toll approaching $203 billion, before factoring in taxpayer assistance, was derived mostly from estimates of $161 billion in lost revenue from the cancellation of nonemergency treatments and $37 billion in net expenses for coronavirus care.

"The fight against this virus has created the greatest financial crisis in history for hospitals and health systems," Rick Pollack, the association's president and CEO, said in a statement Tuesday.

Congress has earmarked $175 billion in COVID-19 financial relief for health care providers. Pollack on Tuesday acknowledged that assistance but said that "many hospitals are still on the brink" and will "need further support."

Sean Barry, an AHA spokesperson, told Law360 on Tuesday that association officials "have not asked Congress for a specific dollar amount at this time."

A report on Friday from accounting and consulting firm Crowe LLP estimated that hospitals nationally have recently been losing $1.44 billion per day because of declining patient volume. That figure is roughly in line with the lost income described Tuesday by the AHA.

The Trump administration in March advised hospitals to curtail most nonessential procedures, and a little more than two weeks ago, it issued guidelines on resuming the procedures in areas with relatively few coronavirus infections.

While the AHA has applauded Congress for approving rescue funds, it has complained about how the U.S. Department of Health and Human Services has been distributing those dollars. In a recent letter to HHS Secretary Alex Azar, the association argued that too much of a $50 billion portion was going to providers and suppliers with "no role in addressing COVID-19."

"We estimate that hospitals and health systems will receive just $22 billion ... of the $50 billion in funds made available to date," the April 27 letter said.

But hospitals are not universally viewed with the same sympathy. A number of recent media reports have spotlighted how some well-heeled hospitals in affluent cities have been receiving taxpayer bailout funds at the same rate as their cash-strapped peers in less-wealthy areas.

Tuesday's report acknowledged that the $203 billion projection could be off the mark, saying it is "sensitive to underlying assumptions." But the report added that some costs were excluded because of limited data, and that the overall estimate therefore "likely under-represents the true financial impact our hospitals and health systems face."

The association also cautioned that "any future waves of COVID-19 infections may result in additional net losses." Experts have long predicted that the virus could return with a vengeance in the fall or winter, and several newly released forecasts on Monday suggested that it may not even ease up very much over the summer.

As one example, the Institute for Health Metrics and Evaluation at the University of Washington on Monday said it expects almost 135,000 U.S. deaths from COVID-19 by early August, an increase of 62,000 deaths compared to its most recent estimate.

According to Johns Hopkins University, the U.S. as of Tuesday night had recorded 71,000 coronavirus fatalities and 1.2 million confirmed infections. Both numbers are inevitably undercounts, and infections could be far more numerous, given limitations on testing and the apparent absence of symptoms in many coronavirus cases.

--Editing by Jill Coffey.

For a reprint of this article, please contact reprints@law360.com.

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