The COVID-19 pandemic caused hospitals to lose patients, and by extension, lose funding, as procedures were canceled and people became fearful to visit hospitals.
The head of the Kentucky Hospital Association told lawmakers Thursday hospitals are still struggling to get patients to return, and the CEO of Harrison Memorial Hospital in Cynthiana said the pandemic has the hospital facing a 22 to 25% drop in its operating margin.
Nancy Galvagni, president of the Kentucky Hospital Association, talked about the impact on hospitals before the interim committee on tourism, small business and information technology.
“The impact on hospitals has been no less acute than on other businesses,” Galvagni said.
Kentucky hospital financial losses are estimated to exceed $2.6 billion, Galvagni said.
While hospitals received funding through the federal CARES Act, those dollars covered less than half of the losses, she said.
Hospitals were required to halt elective procedures at the onset of the pandemic. Although those have resumed, the number of patients coming to hospitals is below pre-pandemic levels, Galvagni said.
Emergency room volume, Galvagni said, is only about 70% of normal.
“Hospitals are also facing losses due to fear,” she said. In some instances, “people appear to have died of heart attacks and strokes” because they were afraid to go to emergency departments, Galvagni said. “We need to get the word out that people shouldn’t avoid treatment.”
Galvagni added that lawmakers “can assure your constituents their Kentucky hospitals are among the safest places they can visit.”
Shelia Currans, CEO of Harrison Memorial Hospital in Cynthiana, said the hospital serves a four-county area.
“That ability to care for patients is as threatened today as it has ever been” in the hospital’s 110-year history, Currans said.
The hospital has taken steps “so other patients who needed care would have confidence they weren’t going to be exposed” to the coronavirus, Currans said.
“We were doing a lot of work, but we weren’t making a lot of revenue,” Currans said.
In addition to CARES direct funding, the hospital received funds through the CARES Act’s Paycheck Protection Program, and received funds through the Center for Medicare and Medicaid Services’ Accelerated and Advanced Payment Program.
“I can tell you had it not been for (those funding sources) we would have faced some dire decisions, even in May,” Currans said.
The advance funds, however, were a loan hospitals have to pay back, beginning six months after the funds were received.
Currans said her Harrison Memorial Hospital will need more time before it can make those repayments.
“The reality is, I can’t recover from a negative 20% margin outright,” Currans said. “I will recover, but I need a little more time. I just want to ask you all to continue to help us stay whole financially.”
Officials from Owensboro Health were not represented at the meeting.
Thursday afternoon, Brain Hamby, Owensboro Health’s director of communications, said the hospital expects to end its year with the same level of profit as last year.
“For the most part, we can say our overall financial performance for the year is on par with previous years,” Hamby said.
Hospital revenue would have exceeded the previous year, had it not been for the pandemic, Hamby said.
CARES funding, the resumption of elective procedures and other measures helped the hospital recover, and prevented officials from furloughing staff, Hamby said.
But the hospital sustained a $60-65 million impact, between loss of revenue and COVID expenses. Owensboro Health spent about $25 million on pandemic-related expenses, Hamby said.
“At the same time, we were able to recover, and we have had a strong financial performance,” he said.
While most services are seeing the normal number of patients, the emergency department “has not recovered as quickly, Hamby said.
“We feel like that could be the reason — the pandemic and concern over the virus may be keeping people from getting the services they need,” Hamby said. “We encourage people to come in and get the care they need, because we are taking many precautions to keep people safe.”
James Mayse, 270-691-7303, email@example.com, Twitter: @JamesMayse