Category Archives: Cash

Hospitals will need a Bailout

Posted on by • Posted in 2020 Election Issues, Cash, Cash Reserves, Cash-Flow Improvements, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economic Stimulus, Economy, Health Policy, Health System, Hospital, Hospital Bailout, Hospital Bankruptcy, Hospital Closure, Hospital Industry, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Pandemic • Leave a comment

https://www.beckershospitalreview.com/hospital-management-administration/kaleida-health-ceo-hospitals-will-need-a-bailout.html?utm_medium=email

We Tracked the Last Time the Government Bailed Out the… — ProPublica

The CEO of Kaleida Health in Buffalo, N.Y., said hospitals will likely need a bailout due to COVID-19, according to local news station WGRZ.

Kaleida Health President and CEO Jody Lomeo highlighted parallels between hospitals and U.S. automakers during the Great Recession. 

“I would think there’s gonna have to be some reimbursement on some level and we’ve seen some of that already with the [recent federal] stimulus bill. We’re gonna need support,” he told WGRZ. He added that his health system “can survive for a couple of months; after that I would be really nervous.”

While federal stimulus funds have begun flowing to hospitals nationwide, hospital CEOs are blasting HHS’ decision to distribute the first $30 billion in emergency funding based on Medicare fee-for-service revenue. HHS said April 10 it would allocate money to hospitals and providers based on their historical share of revenue from the Medicare program, rather than the burden caused by the coronavirus or number of uninsured patients treated.

 

 

 

 

Cartoon – Society Going Cashless

Posted on by • Posted in 2020 Election Issues, Cartoon, Cash, Cash Reserves, Economic Crisis, Economic Stimulus, Economy, Employee Furlough, Employee Layoffs, Employee Protections, Health Insurance Coverage Adequacy, Out of Pocket Expenses, Underinsured, Unemployment, Unemployment Insurance, Uninsured • Leave a comment

Today's cartoons: Getting used to a cashless society – Orange ...

When the coronavirus lockdowns end, we will live in a shrunken world

Posted on by • Posted in Bankruptcy, Cash, Cash Reserves, Centers for Disease Control & Prevention (CDC), Clinical Testing, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economic Stimulus, Economy, Employer-Based Health Insurance, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Health System, Infection Control, Infectious Virus, Out of Pocket Expenses, Pandemic, Recession, Social Distancing, Surprise Bills, Uncertainty, Underinsured, Unemployment, Unemployment Insurance, Uninsured, Unintended Consequences, Vaccination, Vaccine • Leave a comment

https://www.yahoo.com/news/coronavirus-lockdowns-end-live-shrunken-122800321.html

Flipboard: When the coronavirus lockdowns end, we will live in a ...

  • A projection from the Department of Homeland Security, published by the New York Times, shows coronavirus cases spiking again at the end of summer.
  • It’s a stark reminder that American life after lockdown will still be one of limited human interaction. And that means we’ll have to live with a smaller economy too. 
  • The economy will be packed with uncertainty given the possibility of another shelter-in-place order.
  • Until we can all hang out again with confidence, the US economy is going to be a shell of its former self.

When the US emerges from its various shades of shelter-in-place orders, it will emerge to a shrunken global economy. One that will not easily be inflated living within parameters the coronavirus demands.

Financial transactions are a form of human interaction, and even after strict orders to stay at home are lifted, Americans will need to limit human interaction to mitigate the spread of coronavirus. One projection from the Department of Homeland Security, first reported by the New York Times, imagines a world where schools remain closed, 25% of Americans work from home, and social distancing remains in place through the summer.

And people will still be scared. They will know that there is an deadly virus infecting people who interact with other people.

In this scenario, back to work doesn’t mean back to growth because people won’t be spending money the way they did before. Back to work simply means finding a more sane, stable way to maintain society until we get a vaccine. There will be no V-shaped recovery. This is a marathon, and if we’re lucky, we will limp across the finish line.

As incomplete as it is, China is the best picture we have for understanding what a life after lockdown looks like, and it doesn’t look like a booming economy. 460,000 businesses closed permanently in China during the first quarter.

One Chinese county has gone back into lockdown already. In Beijing — where state media says epidemic prevention and control will “probably” become “long-term normal” — restaurants have been ordered to maintain social distance by cutting seating in half and limiting tables to three people. Customers have been slow to come back anyway.

All of this is to say that even if we’re out of lockdown, this saga isn’t remotely over.

Deflation strikes back

What China’s economy is telling us is that once this weird supply funk brought on by everyone staying home is over, and some people are able to go back to work, we’ll still have a demand crisis. Even though the virus has been contained analysts at Oxford Economics told clients it expects to see “basically no growth” in China this year. With other global economies weakened it will sell fewer exports. 

Zhu Jun, director of the international department of the People’s Bank of China, said that there’s a small chance the world risks another Great Depression. Cheery, I know, but until there’s a vaccine, optimism will be in short supply.

Here in the US, just as in China, people will be broke and businesses will be broken. Money will be scarce. Demand will be depressed not just because of a lack of funds, but because people will have changed their behavior to avoid getting sick. 

Wall Street it seems, hasn’t processed this bad news yet. It’s taking this pandemic day-by-day, not looking at life after lockdown. This week the market rallied on news that all over the US, even New York City, the curve is flattening. It was a silly rally.

It’s silly for the market to declare victory before we’ve even seen how much damage has been done (that will take months at least). It’s silly to expect any kind of stability until we know what kind of demand a post-shelter-in-place, pre-vaccine American economy will have.

Finally, we don’t know how long Washington will be in a giving mood. So far the Federal Reserve has pulled out all the stops, and Congress has approved trillions in aid. But will Washington keep sending checks to unemployed Americans until we have a vaccine? 

US employment by industry who can work from home

We thought we knew uncertainty

I think back to all the times I’ve heard CEOs and Wall Street types talk about uncertainty around regulations, or elections, or literally anything else that has happened in my life time, and I have to laugh. All of it seems silly compared to the uncertainty before us right now.

It is quite possible that sometime this summer scientists will develop a treatment for COVID-19 that makes the symptoms much more mild — something more like a standard, week-long flu. That discovery could make things a lot easier, and really bolster confidence enough to bring the economy back until we have a vaccine. But government officials obviously can’t plan with that in mind. Neither can businesses.

And so, those charged with imagining the worst case scenario must imagine a world where Americans are again forced to shelter-in-place to flatten the curve. Homeland Security’s projections put a resurgence of the virus somewhere around the end of summer to the beginning of fall. It’s not unreasonable to think certain populations may have to go back into shelter-in-place then.

Singapore has a robust system of testing for and tracking the coronavirus and its citizens went back into shelter-in-place this week. Here in the US we don’t have such a system. Last week the White House ended federal funding for its drive-thru testing site program.

On Friday New York Governor Andrew Cuomo urged the President to invoke the Defense Production Act to ramp up production of antibody tests that can show who has been infected with the coronavirus and built up immunity. That would allow people to go back to work, but the federal government will only be able to produce 2,000 a day in the next two weeks. 

As a nation, we need to be doing everything we can to ensure that when this lockdown is over, those who can go out can do so with as much confidence as possible. We need to inject as much certainty into this situation as possible Without testing, that’s not happening.

In an interview with CNBC, Bill Gates — the Microsoft founder and billionaire philanthropist who has dedicated a significant chunk of his charitable efforts to studying pandemics — said the federal government simply doesn’t seem interested in a unified testing system. This is one of the few variables in this pandemic the government can control, and it’s blowing it.

Testing is one of the only things that will make our beleaguered, shrunken coronavirus economy a little bit bigger. It’s one of the only ways we can impact the ugly twist of this economic downturn, behavior.

Even then, though, the possibility of an outbreak in a workplace, city, or state will change the way our economy works in ways that will make money scarce. We need to be ready for that.

 

 

 

 

State-by-state breakdown of 354 rural hospitals at high risk of closing

Posted on by • Posted in 2020 Election Issues, Access, Access & Quality of Healthcare, Access to Capital, Bankruptcy, Cash, Cash Reserves, Debt Levels, Financially Distressed, Health Policy, Hospital, Hospital Bankruptcy, Hospital Closure, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Rev Cycle Management, Rural Health, Rural Hospital, Safety Net Hospitals, Safety-Net Providers • Leave a comment

https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing.html?utm_medium=email

What Rural Hospital Closures Mean for EMS Professionals

Twenty-five percent of the 1,430 rural hospitals in the U.S. are at high risk of closing unless their finances improve, according to an annual analysis from Guidehouse, a consulting firm. 

The 354 rural hospitals at high risk of closing are spread across 40 states and represent more than 222,000 annual discharges. According to the analysis, 287 of these hospitals — 81 percent — are considered highly essential to the health and economic wellbeing of their communities.

Several factors are putting rural hospitals at risk of closing, according to the analysis, which looked at operating margin, days cash on hand, debt-to-capitalization ratio, current ratio and inpatient census to determine the financial viability of rural hospitals. Declining inpatient volume, clinician shortages, payer mix degradation and revenue cycle management challenges are among the factors driving the rural hospital crisis.

The Guidehouse study analyzed the financial viability of rural hospitals prior to the COVID-19 pandemic, and the authors noted that the rural hospital crisis could significantly worsen due to the pandemic or any downturn in the economy. 

Here are the number and percentage of rural hospitals at high risk of closing in each state based on the analysis:

Tennessee
Rural hospitals at high risk of closing: 19 (68 percent)

Alabama
Rural hospitals at high risk of closing: 18 (60 percent)

Oklahoma
Rural hospitals at high risk of closing: 28 (60 percent)

Arkansas
Rural hospitals at high risk of closing: 18 (53 percent)

Mississippi
Rural hospitals at high risk of closing: 25 (50 percent)

West Virginia
Rural hospitals at high risk of closing: 9 (50 percent)

South Carolina
Rural hospitals at high risk of closing: 4 (44 percent)

Georgia
Rural hospitals at high risk of closing: 14 (41 percent)

Kentucky
Rural hospitals at high risk of closing: 18 (40 percent)

Louisiana
Rural hospitals at high risk of closing: 11 (37 percent)

Maine
Rural hospitals at high risk of closing: 7 (33 percent)

Indiana
Rural hospitals at high risk of closing: 8 (31 percent)

Kansas
Rural hospitals at high risk of closing: 26 (31 percent)

New Mexico
Rural hospitals at high risk of closing: 3 (30 percent)

Michigan
Rural hospitals at high risk of closing: 13 (29 percent)

Missouri
Rural hospitals at high risk of closing: 10 (26 percent)

Virginia
Rural hospitals at high risk of closing: 5 (25 percent)

Oregon
Rural hospitals at high risk of closing: 4 (24 percent)

California
Rural hospitals at high risk of closing: 6 (23 percent)

North Carolina
Rural hospitals at high risk of closing: 6 (23 percent)

Florida
Rural hospitals at high risk of closing: 2 (22 percent)

North Dakota
Rural hospitals at high risk of closing: 7 (21 percent)

Ohio
Rural hospitals at high risk of closing: 6 (20 percent)

Vermont
Rural hospitals at high risk of closing: 2 (20 percent)

Idaho
Rural hospitals at high risk of closing: 4 (19 percent)

Pennsylvania
Rural hospitals at high risk of closing: 4 (19 percent)

Washington
Rural hospitals at high risk of closing: 5 (18 percent)

Wyoming
Rural hospitals at high risk of closing: 3 (18 percent)

Texas
Rural hospitals at high risk of closing: 14 (16 percent)

Colorado
Rural hospitals at high risk of closing: 4 (14 percent)

Illinois
Rural hospitals at high risk of closing: 7 (14 percent)

Montana
Rural hospitals at high risk of closing: 7 (14 percent)

Nebraska
Rural hospitals at high risk of closing: 8 (13 percent)

New York
Rural hospitals at high risk of closing: 4 (13 percent)

Iowa
Rural hospitals at high risk of closing: 9 (12 percent)

Minnesota
Rural hospitals at high risk of closing: 8 (11 percent)

Alaska
Rural hospitals at high risk of closing: 1 (10 percent)

Arizona
Rural hospitals at high risk of closing: 1 (10 percent)

New Hampshire
Rural hospitals at high risk of closing: 1 (9 percent)

Wisconsin
Rural hospitals at high risk of closing: 5 (9 percent)

 

 

 

Pay Cuts, Furloughs, Redeployment for Doctors and Hospital Staff

Posted on by • Posted in Cash, Cash Reserves, Coronavirus, Crisis, Crisis Management, Elective Procedures, Elective Surgery, Employee Furlough, Employee Layoffs, Employee Pay Cuts, Employee Reassignment, Employee Redeployment, Employment Contract, Executive Compensation, Financially Distressed, Health Policy, Health System, Hospital, Hospital Industry, Leadership, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Pandemic, Physician, Physician Compensation, Physician Credentialing • Leave a comment

https://www.medpagetoday.com/infectiousdisease/covid19/85827?xid=nl_mpt_investigative2020-04-08&eun=g885344d0r&utm_source=Sailthru&utm_medium=email&utm_campaign=InvestigativeMD_040820&utm_term=NL_Gen_Int_InvestigateMD_Active

Pay Cuts, Furloughs, Redeployment for Doctors and Hospital Staff ...

— Health systems see massive disruption from COVID-19

In Michigan, Trinity Health is furloughing 2,500 of its 24,000 employees. In Florida, Sarasota Memorial Health Care is taking “immediate steps to reduce costs, including temporary furloughs and reduced hours” for workers.

In less than 1 month, COVID-19 has made swift, deep cuts in hospital billings. Despite high volumes in the first 2 weeks, March revenue plunged by $16 million at Sarasota Memorial. Surgery cases fell by more than 50%, and volumes dropped by 45% at two emergency care centers and by 66% at seven urgent care centers.

Squeezed by plummeting income and climbing COVID-19 expenses, hospitals and health systems are bracing themselves for system-wide disruption by announcing temporary layoffs, reassignments, and pay cuts.

Many changes, like Trinity’s furloughs in Michigan, affect mainly non-clinical workers. Some alter compensation or duties for doctors, nurses, and other healthcare providers.

“In all parts of the country, physicians are being asked to sign agreements or acknowledgments for pay cuts ranging from 20% to 75%, depending on what their specialty is, where they are, and what the institutions are doing,” said Scott Weavil, JD, a California lawyer who counsels physicians nationwide about employment contracts.

“Many of these providers are not on the front lines of COVID, but they are still working,” Weavil noted. “Babies are being born. People are having accidents and visiting emergency departments. Urgent surgeries are happening. Physicians are at work or on call and ready to help if needed. And in most of these environments, there are patients who have tested positive for COVID-19,” he told MedPage Today.

“Ob/gyns aren’t doing a lot of elective procedures like hysterectomies, but they are delivering babies for COVID-positive patients, wearing donated cloth masks that may or may not be effective,” Weavil added.

In some cases, doctors have been sidelined and face the prospect of dwindling income as patient volumes fall. “We have 2,600 physicians and advanced-practice providers,” said Mark Briesacher, MD, senior vice president and chief physician executive of Intermountain Healthcare in Salt Lake City. “About 800 of them are on a patient volume-related type of contract, similar to what you would have in private practice.”

Because non-urgent and elective procedures are being delayed, some of these clinicians now see 30% to 50% fewer patients and could face big income drops, Briesacher told MedPage Today. “But we’ve put a floor in place,” he said: these providers will receive their usual pay until May 30, then 85% of that amount until normal patient volumes resume.

Redeployment can help practitioners make up lost income, Briesacher added. “A general surgeon often has critical care training,” he noted. “When this increase in patient care needs due to COVID-19 does come to Utah, we can deploy that surgeon to work in our ICUs with a critical care doctor, and if they’re working fulltime, they’ll get paid the same as they were before.”

Reassignment does not stop with doctors at Intermountain: hospital nurses can be deployed to screening desks, drive-through testing sites, or telehealth centers and will keep their current rate of pay, spokesperson Daron Crowley said.

“I recently reviewed a COVID-19 compensation plan of a health system in Florida that would give physicians their base or draw, or a midpoint between their 2019 base and their 2019 overall compensation,” noted Weavil, the attorney. “That seemed pretty good, but it came at a cost: the physicians had to agree to practice outside of their normal setting, as long as they were credentialed for the work.”

“At first blush, the credentialing requirement sounded like a protection; if you are a psychiatrist, you’d think ‘they’re not going to send me to the ICU,’ and normally, that’s correct,” Weavil continued.

But hospitals are adopting emergency credentialing provisions during COVID-19 and “doctors can be forced to practice pretty far afield of their specialty,” he said. In some ways, the situation resembles residency, he pointed out: “You have an attending physician who knows what she’s doing directing fish-out-of-water physicians who have been conscripted into service beyond their specialties.”

The list of hospital systems announcing major changes — including pay cuts for hospital executives, as Trinity Health in Michigan has done — grows each day. Boston Medical Center Health System has furloughed 700 employees; Cincinnati-based Bon Secours Mercy Health has announced it will do the same. Kentucky’s Appalachian Regional Healthcare will furlough about 500 staff members. South Carolina’s Prisma Health will lay off an undisclosed number of clinical, corporate, and administrative workers. Tenet Healthcare in Dallas has furloughed 500 fulltime positions.

Furloughing staff “was an extremely difficult decision, and one that we did not make lightly,” Sarasota Memorial CEO David Verinder wrote in a letter to employees.

“Staff have gone above and beyond to care for our patients throughout this crisis, even as they have been anxious about the health and well-being of themselves and their families,” he continued. “But as the health care safety net for the region, we must do all we can to continue fulfilling that critical role in the weeks ahead and for the long-term.”

 

 

 

$100B federal hospital aid won’t fully compensate lost revenue, Moody’s says

Posted on by • Posted in Cash, Cash Reserves, Coronavirus, Credit Quality, Credit Ratings, Crisis, Crisis Management, Economic Stimulus, Elective Procedures, Elective Surgery, Health System, Hospital, Hospital Industry, Market Outlook, Market Uncertainty, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment

https://www.beckershospitalreview.com/finance/100b-federal-hospital-aid-won-t-fully-compensate-lost-revenue-moody-s-says.html?utm_medium=email

Moodys | HENRY KOTULA

The $2 trillion federal coronavirus aid package signed into law that includes $100 billion for nonprofit hospitals won’t completely cover the revenue hospitals will lose as a result of the pandemic, Moody’s Investors Service wrote in an April 3 note.

While the aid package includes several provisions like compensation for lost revenue, increased Medicare reimbursement and advances on future Medicare reimbursement, cash flow at nonprofit hospitals will still likely be materially lower for the next several months. Postponed services alone are likely to reduce hospital revenue by 25 percent to 40 percent a month on average, Moody’s said, a reduction that is affecting even hospitals that aren’t treating large COVID-19 case loads.

“The $100 billion aid package provides some relief to hospitals by supporting their operations and providing access to critical supplies,” Dan Steingart, vice president at Moody’s, said. “However, it is unlikely to fully compensate the sector for the two main financial challenges facing providers as a result of the coronavirus outbreak. The first is a material decline in revenue and cash flow as profitable elective surgeries, procedures and other services are postponed to preserve resources and avoid spreading the virus. The second is difficulty curbing expenses as surge preparation costs offset any expense reductions from postponed or canceled services.”

Moody’s maintained its negative outlook on nonprofit hospitals. 

 

 

 

Nonprofit hospitals vulnerable to coronavirus-related market fallout, Fitch says

Posted on by • Posted in Asset Allocations, Cash, Cash Reserves, Credit Quality, Credit Ratings, Economy, Health System, Hospital, Hospital Industry, Investment, Investments, Liquidity, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Pandemic, Unemployment • Leave a comment

https://www.beckershospitalreview.com/finance/nonprofit-hospitals-vulnerable-to-coronavirus-related-market-fallout-fitch-says.html

I Like Boats Dump- Especially Boats Crashing Into Waves - Album on ...

Continued market losses prompted by the COVID-19 pandemic will likely weaken key liquidity metrics and pressure the ratings of some nonprofit hospitals, according to a new Fitch Ratings report. 

About half of Fitch’s rated nonprofit hospitals have 10 percent to 40 percent of their portfolios invested in equities, but other nonprofit hospitals exceed this range by a wide margin, Fitch noted.

Throughout the last month, the stock market suffered historic losses, which caused hospitals with more aggressive asset allocation to underperform their more conservative counterparts by 10 percent to 25 percent, Fitch said. 

Fitch said that hospitals in the last few weeks have seen a median loss of about 30 days of cash on hand. It noted this metric is not “an immediate concern yet, given the ample liquidity these hospitals have.”

But Fitch said most hospitals have cash on hand to fund about 200 days of operations.

The ratings agency said the market likely will remain volatile, and “time will tell if and how the stock market declines eat into a hospital’s reserves.”