Category Archives: Average Length of Stay (ALOS)

The dire state of hospital finances (Part 1: Hospital of the Future series)

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About this Episode

The majority of hospitals are predicted to have negative margins in 2022, marking the worst year financially for hospitals since the beginning of the Covid-19 pandemic.

In Part 1 of Radio Advisory’s Hospital of the Future series, host Rachel (Rae) Woods invites Advisory Board experts Monica Westhead, Colin Gelbaugh, and Aaron Mauck to discuss why factors like workforce shortages, post-acute financial instability, and growing competition are contributing to this troubling financial landscape and how hospitals are tackling these problems.

Links:

As we emerge from the global pandemic, health care is restructuring. What decisions should you be making, and what do you need to know to make them? Explore the state of the health care industry and its outlook for next year by visiting advisory.com/HealthCare2023.

COVID-19 impact on hospitals worse than previously estimated

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https://www.healthcarefinancenews.com/news/covid-19-impact-hospitals-worse-previously-estimated?mkt_tok=eyJpIjoiWTJOaU5EWTJOekZsWWpBMCIsInQiOiJEeUZmbVFWVEFmUUxiMElydWdrMmNzY2RtNEdMbmRmM3BFMUFiYTRDOTFBYktPVVJ3ZUFTbTVwR2VzZkNma2VLdUVTNWJ0cGxMNGZ3UjhHbWhDR3g2KzNLeTYrbHU1bCtOWFM1bzdIdXFyQmc2ZGFDNDA4NGNhbFZZT3R2c09wYSJ9

Coronavirus | MSF

Factors such as how many patients would need ICU treatment, average length of stay and fatality risk are straining hospital resources.

When it became evident that the COVID-19 pandemic would spread across the U.S., lawmakers, scientists and healthcare leaders sought to predict what the financial and operational impact on hospitals would be. In those early days, policymakers relied on data from China, where the pandemic originated.

Now, with the benefit of time, the early predictions seriously underestimated the coronavirus’ impacts. University of California Berkeley and Kaiser Permanente researchers have determined that certain factors — such as how many patients would need treatment in intensive care units, average length of stay and fatality risk — are much worse than previously anticipated, and put a much greater strain on hospital resources.

WHAT’S THE IMPACT

Looking primarily at California and Washington, data showed the incidents of COVID-19-related hospital ICU admissions totaled between 15.6 and 23.3 patients per 100,000 in northern and southern California, respectively, and 14.7 per 100,000 in Washington. This incidence increased with age, hitting 74 per 100,000 people in northern California, 90.4 per 100,000 in southern California, and 46.7 per 100,000 in Washington for those ages 80 and older. These numbers peaked in late March and early April.

Those numbers are greater than the initial forecast, especially when factoring in the virus itself. Modeling estimates based on Chinese data suggested that about 30% of coronavirus patients would require ICU care, but in the U.S., the probability of ICU admissions was 40.7%. Male patients are more likely to be admitted to the ICU than females, and also are more likely to die.

Length of stay was also higher than had been predicted. By April 9, the median length of stay was 9.3 days for survivors and 12.7 days for non-survivors. Among patients receiving intensive care, the median stay was 10.5 days, although some patients stayed in the ICU for roughly a month.

Long durations of hospital stay, in particular among non-survivors, indicates the potential for substantial healthcare burden associated with the management of patients with severe COVID-19 — including the need for ventilators, personal protective equipment including N95 masks, more ICU beds and the cancellation of elective surgeries.

The considerable length of stay among COVID patients suggests that unmitigated transmission of the virus could threaten hospital capacity as it has in hotspots such as New York and Italy. Social distancing measures have acted as a stop-gap in reducing transmission and protecting health systems, but the authors said hospitals would do well to ensure capacity in the coming months in a manner that’s responsive to changes in social distancing measures.

THE LARGER TREND

These challenges have placed a financial burden on hospitals that can’t be overstated. In fact, a Kaufman Hall report looking at April hospital financial performance showed that steep volume and revenue declines drove margin performance so low that it broke records.

Despite $50 billion in funding allocated through the CARES Act, operating EBITDA margins fell to -19%. They fell 174%, or 2,791 basis points, compared to the same period last year, and 118% compared to March. This shows a steady and dramatic decline, as EBITDA margins were as high as 6.5% in April.