Hospitals and Health Systems in the Coronavirus Crisis


Health systems all across the United States are reeling from a once-in-a-working-lifetime crisis brought about by the COVID-19 epidemic.  Hospitals, care systems and physician practices are hemorrhaging cash in the face of an expected oncoming flood of COVID patients.  Like the prelude to a tsunami, where the tide goes out a half mile, health system revenues have fallen 25-40% month over month, as normal patient care operations have receded. 

Patients have been reluctant to use hospitals over concern about their infection risk, and fresh worries about their ability to pay their share of the cost.   It is likely that the earnings impact will be much worse, since cases being cancelled are relatively high margin elective cases from patients with private insurance coverage that pays more than it costs to take care of them. 

Even with recent increases in Medicare payment rates for care for the COVID cohort, and an increase in federal Medicaid match to support state payments for the indigent and “differently abled”,  hospitals and the health systems will come tens of billions short.

Balancing hospitals’  safety net function of hospitals with their routine care mission is always tricky, particularly in communities with no public hospitals.   The United States commits less than 3% of total health spending on public health, and has chronically underinvested in mental health, infectious disease surveillance and disaster preparedness. 

In a pandemic or natural disaster, the safety net role of private institutions and practitioners flashes into prominence, and routine care takes a back seat.   Institutions cannot lay off underutilized front line workers waiting for the tsunami of COVID patients and yet do not have current cash flow to pay for them.   

So how does health system leadership set priorities for the sudden parallel financial and public health emergencies?

  1. Protecting the Front Line is the Highest Priority.   The core of both hospital functions is the front line nursing and physician workforce, and their supporting cast in pharmacy, housekeeping, food service and maintenance.   If front line workers do not feel safe doing their job, because they lack protective gear or space for patients, they will transmit those worries to their circles of acquaintance, and the community will not feel safe coming for care.   This is why the catastrophic breakdown in supply chains for emergency gear has hurt so much; it has exposed front line caregivers, who live for this type of work, to needless risk. 
  2. Clear Lines of Communication from the Front Lines to Executive Leadership is Essential.  Front line workers, not just clinicians, need to understand that their concerns are heard and being acted upon.  That cannot happen if leadership remains in the command center directing traffic.  They need to be seen and heard, not just electronically, on the front lines.  One casualty of the corporate complexity of health enterprises is the receding presence of senior leaders.  Leadership need to hear first-hand what’s going on in their emergency rooms, clinics, ORs and ICUs and can do so carefully without exposing themselves to infection risk.  Front line caregivers need to understand that you understand, and are acting aggressively to address their concerns.
  1. Use your Distributed Care Network to Push Out COVID Testing.  The core public health failure in the COVID federal response was the inability rapidly to deploy testing.  Absent broad testing, we do not know the viral footprint in the community, and thus actually  predict whether what is coming is a tsunami, a really high tide or something less threatening.   Forcing people to present at emergency rooms who might have symptoms is an additional barrier to vitally needed population health information that comes from screening for the virus.  That is why distributed ambulatory sites and affiliated physician offices are so important; they reduce the perceived risk and inconvenience of citizens being tested.  The sooner health system can ramp up their testing capacity and push it away from the acute care setting, the better grasp we will have of the extent of the crisis, and plan for meeting actual need.  
  2. Tell Your Health System’s Story.   It is often only in situations like COVID that communities come to understand how much of a difference healthcare organizations make in their lives, and how much power they have to help them when they are frightened and hurting.   Health system leadership is going to need their understanding and support in repairing the economic damage being done to their institutions.   Local communities need to understand that you were there when you were most needed.  The best way to communicate it is through the faces and voices of the caregiving workforce, and the lives they helped.  Do not be bashful in sharing their stories and yours. 

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