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Fauci: US seeing ‘disturbing’ new surge of infections
Anthony Fauci, the administration’s top infectious disease doctor, told a House panel on Tuesday that the country’s response to the COVID-19 pandemic has been a “mixed bag,” adding that a new increase in cases is “disturbing.”
“In some respects, we’ve done very well,” Fauci said during an Energy and Commerce Committee hearing, specifically praising the way New York has been containing the worst outbreak in the country to date.
“However, in other areas of the country, we are now seeing a disturbing surge of infections that looks like it’s a combination, but one of the things is an increase in community spread. And that’s something I’m really quite concerned about,” Fauci said.
There are now about 30,000 new cases per day in the United States. The number of new cases had leveled off at about 20,000, and stayed there for weeks before rising this past weekend.
The rise in the U.S. comes as the Trump administration has sought to paint a rosier picture of the U.S. outlook. Both President Trump and Vice President Pence have inaccurately tried to attribute the increase in cases to more tests being performed.
The new spike in the U.S. is being driven in part by worsening outbreaks across the South and Southwest, including in Arizona, Texas, Florida and the Carolinas, even as the situation has greatly improved in once hard-hit states in the Northeast like New York and Massachusetts.
Many of the states now being hit hard were on the more aggressive side in reopening their economies.
“Right now, the next couple of weeks are going to be critical in our ability to address those surgings in Florida, in Texas, in Arizona, and in other states,” Fauci said on Tuesday.
5 health systems cutting physician salaries
To help offset revenue losses attributed to the COVID-19 pandemic, many hospitals have implemented pay cuts for staff, including physicians.
Below are five hospitals or health systems that have announced pay cuts for clinicians, reported by Becker’s Hospital Review in the last month.
1. ThedaCare physicians, advanced practice clinicians take pay cuts
ThedaCare physicians and advanced practice clinicians will take a 10 percent pay cut to help reduce the Appleton, Wis.-based health system’s financial hit due to the COVID-19 pandemic.
2. Providence to cut salaries of 1,200 providers
Renton, Wash.-based Providence plans to reduce the salaries of 1,200 high-paid medical providers in its Oregon division to help offset losses from the COVID-19 pandemic. Providence told Becker’s Hospital Review that the decision to cut salaries was made by local leadership and is limited to Oregon-based providers.
3. Cleveland’s University Hospitals to cut all physician, clinical leader pay
University Hospitals, based in Cleveland, said it will temporarily cut pay for all physicians and clinical leaders in the organization to help offset losses driven by the pandemic.
4. Sentara executives, physicians take pay cuts
Senior leaders, executives and physicians at Norfolk, Va.-based Sentara Healthcare are taking pay cuts to help address an anticipated $778 million shortfall against projected revenue due to COVID-19, the organization confirmed to Becker’s Hospital Review.
5. Loyola Medicine CEO, physicians take pay cuts amid pandemic
Leadership and faculty physicians at Maywood, Ill.-based Loyola Medicine will take three-month pay cuts in response to the COVID-19 pandemic, CEO Shawn Vincent said in an interview with Becker’s Hospital Review.
42 hospitals closed, filed for bankruptcy this year
From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to shut down or file for bankruptcy. At least 42 hospitals across the U.S. have closed or entered bankruptcy this year, and the financial challenges caused by the COVID-19 pandemic may force more hospitals to do the same in coming months.
COVID-19 has created a cash crunch for many hospitals across the nation. They’re estimated to lose $200 billion between March 1 and June 30, according to a report from the American Hospital Association. More than $161 billion of the expected revenue losses will come from canceled services, including nonelective surgeries and outpatient treatment. Moody’s Investors Service said the sharp declines in revenue and cash flow caused by the suspension of elective procedures could cause more hospitals to default on their credit agreements this year than in 2019.
Below are the provider organizations that have filed for bankruptcy or closed since Jan. 1, beginning with the most recent. They own and operate a combined 42 hospitals.
Our Lady of Bellefonte Hospital (Ashland, Ky.)
Bon Secours Mercy Health closed Our Lady of Bellefonte Hospital in Ashland, Ky., on April 30. The 214-bed hospital was originally slated to shut down in September of this year, but the timeline was moved up after employees began accepting new jobs or tendering resignations. Bon Secours cited local competition as one reason for the hospital closure. Despite efforts to help sustain hospital operations, Bon Secours was unable to “effectively operate in an environment that has multiple acute care facilities competing for the same patients, providers and services,” the health system said.
Williamson (W.Va.) Hospital
Williamson Hospital filed for Chapter 11 bankruptcy in October and was operating on thin margins for months before shutting down on April 21. The 76-bed hospital said a drop in patient volume due to the COVID-19 pandemic forced it to close. CEO Gene Preston said the decline in patient volume was “too sudden and severe” for the hospital to sustain operations.
Decatur County General Hospital (Parsons, Tenn.)
Decatur County General Hospital closed April 15, a few weeks after the local hospital board voted to shut it down. Decatur County Mayor Mike Creasy said the closure was attributable to a few factors, including rising costs, Tennessee’s lack of Medicaid expansion and broader financial challenges facing the rural healthcare system in the U.S.
Quorum Health (Brentwood, Tenn.)
Quorum Health and its 23 hospitals filed for Chapter 11 bankruptcy April 7. The company, a spinoff of Franklin, Tenn.-based Community Health Systems, said the bankruptcy filing is part of a plan to recapitalize the business and reduce its debt load.
UPMC Susquehanna Sunbury (Pa.)
UPMC Susquehanna Sunbury closed March 31. Pittsburgh-based UPMC announced plans in December to close the rural hospital, citing dwindling patient volumes. Sunbury’s population was 9,905 at the 2010 census, down more than 6 percent from 10 years earlier. Though the hospital officially closed its doors in March, it shut down its emergency department and ended inpatient services Jan. 31.
Fairmont (W.Va.) Regional Medical Center
Irvine, Calif.-based Alecto Healthcare Services closed Fairmont Regional Medical Center on March 19. Alecto announced plans in February to close the 207-bed hospital, citing financial challenges. “Our plans to reorganize some administrative functions and develop other revenue sources were insufficient to stop the financial losses at FRMC,” Fairmont Regional CEO Bob Adcock said. “Our efforts to find a buyer or new source of financing were unsuccessful.” Morgantown-based West Virginia University Medicine will open a 10-bed hospital with an emergency department at the former Fairmont Regional Medical Center by the end of June.
Sumner Community Hospital (Wellington, Kan.)
Sumner Community Hospital closed March 12 without providing notice to employees or the local community. Kansas City, Mo.-based Rural Hospital Group, which acquired the hospital in 2018, cited financial difficulties and lack of support from local physicians as reasons for the closure. “Lack of support from the local medical community was the primary reason we are having to close the hospital,” RHG said. “We regret having to make this decision; however, despite operating the hospital in the most fiscally responsible manner possible, we simply could not overcome the divide that has existed from the time we purchased the hospital until today.”
Randolph Health
Randolph Health, a single-hospital system based in Asheboro, N.C., filed for Chapter 11 bankruptcy March 6. Randolph Health leaders have taken several steps in recent years to improve the health system’s financial picture, and they’ve made progress toward that goal. Entering Chapter 11 bankruptcy will allow Randolph Health to restructure its debt, which officials said is necessary to ensure the health system continues to provide care for many more years.
Pickens County Medical Center (Carrollton, Ala.)
Pickens County Medical Center closed March 6. Hospital leaders said the closure was attributable to the hospital’s unsustainable financial position. A news release announcing the closure specifically cited reduced federal funding, lower reimbursement from commercial payers and declining patient visits.
The Medical Center at Elizabeth Place (Dayton, Ohio)
The Medical Center at Elizabeth Place, a 12-bed hospital owned by physicians in Dayton, Ohio, closed March 5. The closure came after years of financial problems. In January 2019, the Medical Center at Elizabeth Place lost its certification as a hospital, meaning it couldn’t bill Medicare or Medicaid for services. Sixty to 65 percent of the hospital’s patients were covered through the federal programs.
Mayo Clinic Health System-Springfield (Minn.)
Mayo Clinic Health System closed its hospital in Springfield, Minn., on March 1. Mayo announced plans in December to close the hospital and its clinics in Springfield and Lamberton, Minn. At that time, James Hebl, MD, regional vice president of Mayo Clinic Health System, said the facilities faced staffing challenges, dwindling patient volumes and other issues. The hospital in Springfield is one of eight hospitals within a less than 40-mile radius, which has led to declining admissions and low use of the emergency department, Dr. Hebl said.
Faith Community Health System
Faith Community Health System, a single-hospital system based in Jacksboro, Texas and part of the Jack County (Texas) Hospital District, first entered Chapter 9 bankruptcy — a bankruptcy proceeding that offers distressed municipalities protection from creditors while a repayment plan is negotiated — in February. The bankruptcy court dismissed the case May 26 at the request of the health system. The health system asked the court to dismiss the bankruptcy case to allow it to apply for a Paycheck Protection Program loan through a Small Business Association lender. On June 11, Faith Community Health System reentered Chapter 9 bankruptcy.
Pinnacle Healthcare System
Overland Park, Kan.-based Pinnacle Healthcare System and its hospitals in Missouri and Kansas filed for Chapter 11 bankruptcy on Feb. 12. Pinnacle Regional Hospital in Boonville, Mo., formerly known as Cooper County Memorial Hospital, entered bankruptcy about a month after it abruptly shut down. Pinnacle Regional Hospital in Overland Park, formerly called Blue Valley Hospital, closed about two months after entering bankruptcy.
Central Hospital of Bowie (Texas)
Central Hospital of Bowie abruptly closed Feb. 4. Hospital officials said the facility was shut down to enable them to restructure the business. Hospital leaders voluntarily surrendered the license for Central Hospital of Bowie.
Ellwood City (Pa.) Medical Center
Ellwood City Medical Center officially closed Jan. 31. The hospital was operating under a provisional license in November when the Pennsylvania Department of Health ordered it to suspend inpatient and emergency services due to serious violations, including failure to pay employees and the inability to offer surgical services. The hospital’s owner, Americore Health, suspended all clinical services at Ellwood City Medical Center Dec. 10. At that time, hospital officials said they hoped to reopen the facility in January. Plans to reopen were halted Jan. 3 after the health department conducted an onsite inspection and determined the hospital “had not shown its suitability to resume providing any health care services.”
Thomas Health (South Charleston, W.Va.)
Thomas Health and its two hospitals filed for Chapter 11 bankruptcy on Jan. 10. In an affidavit filed in the bankruptcy case, Thomas Health President and CEO Daniel J. Lauffer cited several reasons the health system is facing financial challenges, including reduced reimbursement rates and patient outmigration. The health system announced June 18 that it reached an agreement in principle with a new capital partner that would allow it to emerge from bankruptcy.
St. Vincent Medical Center (Los Angeles)
St. Vincent Medical Center closed in January, roughly three weeks after El Segundo, Calif.-based Verity Health announced plans to shut down the 366-bed hospital. Verity, a nonprofit health system that entered Chapter 11 bankruptcy in 2018, shut down St. Vincent after a deal to sell four of its hospitals fell through. In April, Patrick Soon-Shiong, MD, the billionaire owner of the Los Angeles Times, purchased St. Vincent out of bankruptcy for $135 million.
Astria Regional Medical Center (Yakima, Wash.)
Astria Regional Medical Center filed for Chapter 11 bankruptcy in May 2019 and closed in January. When the hospital closed, 463 employees lost their jobs. Attorneys representing Astria Health said the closure of Astria Regional Medical Center, which has lost $40 million since 2017, puts Astria Health in a better financial position. “As a result of the closure … the rest of the system’s cash flows will be sufficient to safely operate patient care operations and facilities and maintain administrative solvency of the estate,” states a status report filed Jan. 20 with the bankruptcy court.
Health insurance marketplace GoHealth files to go public
GoHealth, an online health insurance marketplace, is looking to raise up to $100 million in an initial public offering, according to a filing with the U.S. Securities and Exchange Commission (SEC) Friday.
The Chicago company, launched in 2001, said its stock will trade on the Nasdaq Global Market under the symbol “GHTH,” according to an S-1 filing.
The company didn’t list specific share price or the number of shares it’s selling in the filing.
GoHealth operates a health insurance portal offering a variety of plans that allows customers to compare numerous insurance plans such as family health plans and self-employed insurance.
The company works with more than 300 health insurance carriers and has enrolled more than 5 million people into health plans.
Goldman Sachs, BofA Securities and Morgan Stanley are acting as the managing book runners for the proposed offering. Barclays, Credit Suisse, Evercore ISI, RBC Capital Markets and William Blair are acting as book runners for the proposed offering. Cantor and SunTrust Robinson Humphrey are acting as co-managers for the proposed offering, according to a GoHealth press release.
GoHealth will join a growing list of technology-enabled healthcare companies that are testing the public markets, including One Medical, Livongo, Phreesia, Health Catalyst, Change Healthcare and Progyny.
The company has shifted its focus toward Medicare products over the past four years, positioning itself to capitalize on strong demographic trends and an aging population.
Medicare enrollment is expected to grow from approximately 61 million individuals in 2019 to approximately 77 million individuals by 2028, the company said in its SEC filing.
At the same time, an increasing proportion of the Medicare-eligible population is choosing commercial insurance solutions, with 38% of Medicare beneficiaries, or approximately 23 million people, enrolled in Medicare Advantage plans in 2019, an increase of approximately 1.5 million people from 2018 to 2019, the company said.
The market is “ripe for disruption” by digitally enabled and technology-driven marketplaces like the GoHealth platform, according to the company.
GoHealth estimates a total addressable market of $28 billion for Medicare Advantage and Medicare Supplement products.
“We believe that these trends will drive a larger market in the coming years that, when taken together with our other product and plan offerings, will result in an even larger addressable market. We also believe that we are poised to benefit from market share gains in what has traditionally been a highly fragmented market,” the company said in the S-1 filing.
The company uses machine-learning algorithms and insurance behavioral data to match customers with the health insurance plan that meets their specific needs.
In 2019, the company generated over 42.2 million consumer interactions.
In September 2019, Centerbridge acquired a majority stake of GoHealth in a deal that reportedly valued the company at $1.5 billion, the Chicago Tribune reported.
Net revenues grew to $141 million for the first quarter of this year, compared to $69.1 million last year. The company reported 2019 pro forma net revenues of $540 million, up 139% from 2018’s revenue of $226 million, the company reported in its SEC filing.
The company reported a net loss of $937,000 for the first quarter of 2020 compared to a net income of $5 million for the same period in 2019, according to its IPO.
Demographic, consumer preference and regulatory factors are driving growth in the individual health insurance market, according to the company. Medicare enrollment is expected to grow significantly over the next 10 years as 10,000-plus individuals turn 65 each day and become Medicare-eligible.
At the same time, the growth in plan choices makes education and assistance with plan selection more important for consumers, GoHealth said.
“Marketplaces such as ours help educate consumers, and assist them in making informed plan choices,” the company said.
The company also faces significant risks that may impede its growth. Currently, a large portion of GoHealth’s revenue is derived from a limited number of carriers. Carriers owned by Humana and Anthem accounted for approximately 42% and 32%, respectively, of the company’s net revenues for the first three months of 2020, the company said in its IPO paperwork.
The COVID-19 pandemic also creates uncertainty in the healthcare market, and future developments in the outbreak could impact the company’s financial performance, GoHealth said.
Moody’s: Patient volume recovered a bit in May, but providers face long road to recovery
Patient volumes at hospitals, doctors’ and dentists’ offices recovered slightly in May but lagged well behind pre-pandemic levels, according to a new analysis from Moody’s Investors Service.
In all, the ratings agency estimated total surgeries at rated for-profit hospitals declined by 55% to 70% in April compared with the same period in 2019. States required hospitals to cancel or delay elective procedures, which are vital to hospitals’ bottom lines.
“Patients that had been under the care of physicians before the pandemic will return first in order to address known health needs,” officials from the ratings agency said in a statement. “Physicians and surgeons will be motivated to extend office or surgical hours in order to accommodate these patients.”
Those declines narrowed to 20% to 40% in May when compared to 2019.
Emergency room and urgent care volumes were still down 35% to 50% in May.
“This could reflect the prevalence of working-from-home arrangements and people generally staying home, which is leading to a decrease in automobile and other accidents outside the home,” the analysis said. “Weak ER volumes also suggest that many people remain apprehensive to enter a hospital, particularly for lower acuity care.”
The good news: The analysis estimated it is unlikely there will be a return to the nationwide decline of volume experienced in late March and April because healthcare facilities are more prepared for COVID-19.
For instance, hospitals have enough personal protective equipment for staff and have expanded testing, the analysis said.
For-profit hospitals also have “unusually strong liquidity to help them weather the effects of the revenue loss associated with canceled or postponed procedures,” Moody’s added. “That is largely due to the CARES Act and other government financial relief programs that have caused hospital cash balances to swell.”
However, the bill for one of those sources of relief is coming due soon.
Hospitals and other providers will have to start repaying Medicare for advance payments starting this summer. The Centers for Medicare & Medicaid Services doled out more than $100 billion in advance payments to providers before suspending the program in late April.
Hospital group Federation of American Hospitals asked Congress to change the repayment terms for such advance payments, including giving providers at least a year to start repaying the loans.
Another risk for providers is the change in payer mix as people lose jobs and commercial coverage, shifting them onto Medicaid or the Affordable Care Act’s (ACA’s) insurance exchanges.
“This will lead to rising bad debt expense and a higher percentage of revenue generated from Medicaid or [ACA] insurance exchange products, which typically pay considerably lower rates than commercial insurance,” Moody’s said.
Coronavirus Doesn’t Recognize Man-Made Borders
From El Centro Regional Medical Center, the largest hospital in California’s Imperial County, it takes just 30 minutes to drive to Mexicali, the capital of the Mexican state of Baja California. The international boundary that separates Mexicali from Imperial County is a bridge between nations. Every day, thousands of people cross that border for work or school. An estimated 275,000 US citizens and green card holders live in Baja California. El Centro Regional Medical Center has 60 employees who reside in Mexicali and commute across the border, CEO Adolphe Edward told Julie Small of KQED.
Now these inextricably linked places have become two of the most concerning COVID-19 hot spots in the US and Mexico. While Imperial County is one of California’s most sparsely populated counties, it has the state’s highest per capita infection rate — 836 per 100,000, according to the California Department of Public Health. This rate is more than four times greater than Los Angeles County’s, which is second-highest on that list. Imperial County has 4,800 confirmed positive cases and 64 deaths, and its southern neighbor Mexicali has 4,245 infections and 717 deaths.
The COVID-19 crisis on the border is straining the local health care system. El Centro Regional Medical Center has 161 beds, including 20 in its intensive care unit (ICU). About half of all its inpatients have COVID-19, Gustavo Solis reported in the Los Angeles Times, and the facility no longer has any available ventilators.
When Mexicali’s hospitals reached capacity in late May, administrators alerted El Centro that they would be diverting American patients to the medical center. “They said, ‘Hey, our hospitals are full, you’re about to get the surge,’” Judy Cruz, director of El Centro’s emergency department, recounted to Rebecca Plevin in the Palm Springs Desert Sun.
By the first week of June, El Centro was so overburdened that “a patient was being transferred from the hospital in El Centro every two to three hours, compared to 17 in an entire month before the COVID-19 pandemic,” Miriam Jordan reported in the New York Times.
Border Hospitals Filled to Capacity
Since April, hospitals in neighboring San Diego and Riverside Counties have been accepting patient transfers to alleviate the caseload at the lone hospital in El Centro, but the health emergency has escalated and now those counties need relief. “We froze all transfers from Imperial County [on June 9] just to make sure that we have enough room if we do have more cases here in San Diego County,” Chris Van Gorder, CEO of Scripps Health, told Paul Sisson in the San Diego Union-Tribune. El Centro patients are now being airlifted as far as San Francisco and Sacramento.
According to the US Census Bureau, nearly 85% of Imperial County residents are Latino, and statewide, Latinos bear a disproportionate burden of COVID-19. The California Department of Public Health reports that Latinos make up 39% of California’s population but 57% of confirmed COVID-19 cases.
Nonessential travel between the US and Mexico has been restricted since March 21, with the measure recently extended until July 21. However, jobs in Southern California, such as in agricultural fields and packing houses, require regular movement between the two countries. “I’m always afraid that people are imagining this rush on the border,” Andrea Bowers, a spokesperson for the Imperial County Public Health Department, told Small. “It’s just folks living their everyday life.”
These jobs, some of which are considered essential because of their role in the food supply chain, may have contributed to the COVID-19 crisis on the border. Agricultural workers often lack access to adequate personal protective equipment and are unable to practice physical distancing. They also are exposed to air pollution, pesticides, heat, and more — long-term exposures that can cause the underlying health conditions that raise the risk of death for COVID-19 patients.
Comite Civico del Valle, a nonprofit focused on environmental health and civic engagement in Imperial Valley, set up 40 air pollution monitors throughout the county and found that levels of tiny, dangerous particulates violated federal limits, Solis reported.
“I can tell you there’s hypertension, there’s poor air pollution, there’s cancers, there’s asthma, there’s diabetes, there’s countless things people here are exposed to,” David Olmedo, an environmental health activist with Comite Civico del Valle, told Solis.
Fear of New Surges
With summer socializing in full swing, health experts worry that COVID-19 spikes will follow. Imperial County saw surges after Mother’s Day and Memorial Day, probably because of lapsed physical distancing and mask use at social events.
Latinos in California are adhering to recommended public health behaviors to slow the spread of the virus. CHCF’s recent COVID-19 tracking poll with Ipsos asked Californians about their compliance with recommended behaviors. Eighty-four percent of Californians, including 87% of Latinos, say they routinely wear a mask in public spaces all or most of the time. Seventy-two percent of Californians, including 73% of Latinos, say they avoid unnecessary trips out of the home most or all of the time, and 90% of Californians, including 91% of Latinos, say they stay at least six feet away from others in public spaces all or most of the time.
A Push to Reopen Anyway
Most counties in California have met the state’s readiness criteria for entering the “Expanded Stage 2” phase of reopening. Imperial County has not. In the past two weeks, more than 20% of all COVID-19 tests in the county came back positive, the Sacramento Bee reported. The state requires counties to have a seven-day testing positivity rate of no more than 8% to enter Expanded Stage 2.
Still, the Imperial County Board of Supervisors is pushing Governor Gavin Newsom for local control over its reopening timetable. The county has a high poverty rate — 24% compared with the statewide average of 13% — and “bills are stacking up,” Luis Pancarte, chairman of the board, said on a recent press call.
He worries that because neighboring areas like Riverside and San Diego have opened some businesses with physical distancing measures in place, Imperial County residents will travel to patronize restaurants and stores. This movement could increase transmission of the new coronavirus, just as reopening Imperial County too soon could as well.
More than 1,350 residents have signed a petition asking Newsom to ignore the Board of Supervisor’s request, Solis reported. The residents called on the supervisors to focus instead on getting the infection rate down and expanding economic relief for workers and businesses.
Cruz, who has been working around the clock to handle the county’s COVID-19 crisis, agrees with the petitioners. The surges after Mother’s Day and Memorial Day made her “really concerned about unlocking and letting people go back to normal,” she told Plevin. “It’s going to be just like those little gatherings that happened [on holidays], but on a bigger scale.”
HENRY KOTULA 