COVID-19 could have a surprising victim: hospital systems

Postponed elective surgeries are cutting into the bottom line of many healthcare providers

CLARK COUNTY — As the COVID-19 pandemic spread across the globe in February and March, members of the public watched in horror as hospitals in Italy and Spain were overwhelmed with cases and thousands died.

PeaceHealth Southwest Medical Center in Vancouver. Photo by Mike Schultz
PeaceHealth Southwest Medical Center in Vancouver. Photo by Mike Schultz

As the virus spread here in America, experts issued dire warnings about a similar situation unfolding here. In response, states across the country implemented shutdowns and stay-at-home orders, enforcing social distancing in an effort to to slow the spread of the outbreak.

For the most part, it seems as if this approach has had the desired effect.

Seattle, which saw the first confirmed case in the United States on Jan. 22 and a rash of cases and deaths linked to a Kirkland adult care facility, braced for impact. 

In early April, the U.S. Army set up a field hospital inside CenturyLink Field Event Center. Three days later, it was dismantled and moved to another part of the country after having never treated a single patient.

While the death toll in Washington has now topped 700, with nearly 13,000 confirmed cases, hospitals have largely been able to handle the influx of COVID-19 patients.

The reality for hospitals outside of the hard-hit Puget Sound area is that the flow of COVID-19 patients has been more of a trickle.

As of last Monday, Legacy Health Systems had seven people hospitalized in Clark County with confirmed COVID-19 cases, with another 17 awaiting tests systemwide. PeaceHealth Southwest had 14 confirmed cases, with a handful in intensive care.

Otherwise, emergency departments have become far more quiet than usual, and revenue streams from elective and non-urgent procedures have all but disappeared.

“The way it has been described to us is the hospitals have 50 percent of the revenue coming in, and 100-120 percent of the cost,” says Chelene Whiteaker, senior vice president of government affairs for the Washington State Hospital Association (WSHA).

As part of his March 25 order shutting down non-essential businesses in the state, Washington Gov. Jay Inslee required hospitals to postpone or cancel elective procedures and non-urgent surgeries, in order to free up capacity, personnel, and — most of all — personal protective equipment (PPE) for the fight against COVID-19.

The stop on non-essential procedures means a drop in other services as well, from imagine and therapy services, to lab work and diagnostics. 

WSHA represents close to 100 hospitals across the state, and Whiteaker says their initial estimate is that losses for March and April have amounted to at least $900 million.

“If you take that out to June, that could be as much as $2 billion,” she says.

Federal funding has helped prop up rural hospitals, at least temporarily, but Whiteaker says it hasn’t come close to replacing revenue lost due to the shutdown.

The $2.2 trillion CARES Act passed by Congress in March included $100 billion to assist hospitals with COVID-19 funding. That added up to just over $550 million for nearly 5,400 healthcare providers and systems  in Washington state, or around $400,000 to $600,000 each for rural hospitals.

“It’s great that that’s happening, but it didn’t cover very much in terms of the impact and the losses that the hospital were seeing,” says Whiteaker.

In some cases, the funding covers only 10-15 percent of lost revenue. For hospitals that treat more Medicare patients, that number could be up to 30-40 percent, Whiteaker said, but no one is coming close to replacing what has been lost.

“Those relief funds, they’re for physician groups, they’re for nursing homes, blood centers, for example, got a tiny portion of that funding,” says Whiteaker. “So while it’s talked a lot about as the ‘hospital fund,’ it goes much beyond that.”

Another round of funding, signed by the president Friday, will provide $75 billion more for hospitals impacted by the shutdowns, though it remains unclear how soon that could be distributed, or how much Washington providers will receive. 

The process is described by Whiteaker, an expert in government affairs, as “confusing.”

It has been made more so by the sometimes convoluted approach to obtaining Personal Protective Equipment (PPE), such as masks, gloves, gowns, and facemasks. All of which have been in high demand.

“We had a lot of hospitals having concerns that they weren’t getting procedure masks, for example, that can help protect their staff,” says Whiteaker. “And so we worked to distribute thousands of masks across the state.”

Something WSHA has never had to do before, she adds. 

And that situation needs to improve greatly before hospitals can open their doors back up to patients who’ve had their procedures delayed. 

The governor’s office says help is on the way, and he will soon announce concrete steps to getting hospitals back in business. Gov. Kate Brown of Oregon announced this week that hospitals can begin resuming elective and non-urgent procedures as of May 1.

The postponement of non-essential care is also sparking a growing concern about health problems going undiagnosed.

“Elective and non-essential care is important to the overall health of our patients,” said Chastell Ely with The Vancouver Clinic in a statement to Clark County Today. “Prevention and screening for diseases like cancer can improve quality of life and outcomes for our patients. We are currently not doing routine colonoscopies or mammograms and we all know early detection saves lives.”

With connections to larger healthcare systems, hospitals in Clark County, like Legacy Salmon Creek and PeaceHealth Southwest, may not face the immediate threat of closure or bankruptcy, but they have been forced to cut back hours, lay people off, and shut down some areas of their facilities to save money.

Ely says The Vancouver Clinic’s ambulatory surgery center is currently open only one or two days a week, a significant reduction from their normal hours.

And it’s not just surgery centers and imaging labs experiencing the massive drop in patients.

Vancouver Fire Chief Joe Molina said during a city council meeting this week that American Medical Response has seen their number of daily transports fall by more than half, from close to 200 per day, to around 65 right now.

Call volume has also decreased, Molina said, but not to the same degree as transports. Some of that is due to new procedures to better assess the needs of callers, to determine if they can be stabilized at home without a trip to the emergency room. But some of it is also due to more people simply declining a trip to the hospital out of concern over the virus.

“It feels like nobody’s wanting to go to the hospital,” said Molina. “That’s what we kind of

suspected might occur, but we didn’t realize that it was gonna be this drastic. A thousand transports, month-to-date, are not happening.”

In response, members of the Vancouver City Council approved a temporary change to Vancouver’s contract with AMR that will allow them to delay replacing several ambulances. Partly out of a need to have them in service to respond to medical emergencies where a transport won’t occur, but also because replacement ambulances have been delayed due to the pandemic.

Even when elective and non-urgent procedures are allowed to resume, Whiteaker says, it’s not as if hospitals can simply make up the revenue they’ve lost during the shutdown.

“There’s a ceiling to that, in terms of delivering health care services,” she says. “You only have so many operating rooms, you only have so many physicians. There will be a very strong demand, but the system, just in terms of how many people it can serve, there is a limit to it.”

That problem could be further exacerbated in systems where hospitals have been forced to lay off or furlough personnel to adjust for the budget impact.

“Some of our rural hospitals in particular said they’re very concerned about what does this look like long term, because they may only have one or two surgeons in their area,” Whiteaker said. “And if they are unable to retain their surgeon, the chances of them being able to rehire that position in the future are very low, and it can take months or years.”