Thursday, May 28, 2020

California hospitals struggle financially after preparing for COVID-19 surge that never came

As the novel coronavirus tore through Italy and then New York in March, California, anticipating a deadly surge in cases, ordered hospitals to shut down routine procedures and called in thousands of health care workers to help patients.

The measures drove hospitals in the most populous U.S. state close to bankruptcy, costing them as much as $14 billion and forcing them to lay off of thousands of health care workers, according to the California Hospital Association.

Now, reeling from the twin financial blows, hospitals are struggling to get ready for a possible new surge in cases this autumn, and wrestling with the question of whether they over-prepared last time around.

"Most hospitals' balance sheets have been trashed," said Carmela Coyle, president of the California Hospital Association.

DIFFICULTY BEFORE THE PANDEMIC. Even before the pandemic, 38% of all California hospitals - public and private - were losing money after years of thin operating margins and industry consolidation.

Statewide, California hospitals have received $3.4 billion from the CARES Act, about 4% of the national total for hospitals, the Hospital Association says.

Preparing for COVID-19's first wave left hospitals vulnerable even as they get ready to face another, hospital administrators said.

No comments: