As COVID-19 first started to spread in the U.S., hospitals around the country were forced to stop elective surgeries. Now, hospital officials say they're facing perhaps the biggest financial crisis in their history.
"We've had to curtail regular operations, some of which involve these non-emergent procedures that you mention, and as a result from March to June, we saw a loss of revenue of $200 billion or $50 billion a month," said American Hospital Association President Rick Pollack.
Hospitals have also taken on major expenses when it comes to preparing and caring for COVID-19 patients. Plus, many patients they treat don't have insurance.
Pollack says hospitals collectively are one of the largest employers in the country, employing more than 5 million people.
"Half of hospitals' budgets, over half, is devoted to labor costs. So, of course, when all regular operations are shut down and you’re incurring additional expenses to prepare for treating the virus for the community, you have to find ways to cut costs," explained Pollack.
Some hospitals have resorted to laying off or furloughing staff.
"So, it's the last choice,” Pollack said. “It's a bad choice and we try to avoid it, but sometimes, it's inevitable to just stay afloat.”
"Whether the disruptions in the health industry remain temporary or permanent is an interesting case because it affects everyone," said Jack Strauss, the Miller Chair of Applied Economics at the University of Denver.
Strauss is concerned about how the healthcare industry will recover from the COVID-19 pandemic, especially amid a possible second wave of infections.
"They make their money on elective surgery and those were not occurring, and so, they're not probably positioned to recover," said Strauss.
While a number of states are allowing elective procedures again, the wait time for these patients may be detrimental.
"Whether it's the detection for a tumor or a scan of a part of a body for a diagnostic procedure, a replacement of a heart valve. So, when you talk about electives, they're really not all that discretionary and we’re really concerned in the period that we shut down all non-emergent procedures that there was a deferral of care,” said Pollack. “We do hear, anecdotally, that the people that are coming back are in a much sicker position because they didn’t get the care that they needed.”
Pollack says in order for the healthcare industry to recover, they're going to need a lot of help from the federal government.
"There's no question, if we don't get the additional assistance it will put the financial viability of a lot of hospitals at risk, particularly in rural areas and vulnerable urban areas," said Pollack.
As possibly the biggest industry in the country that's been on the front lines of treating COVID-19, hospitals hope they're one of the first to get major federal help so that the healthcare industry can survive this pandemic.