Henry Ford Health to furlough 2,800 workers

https://www.beckershospitalreview.com/finance/henry-ford-health-to-furlough-2-800-workers.html?utm_medium=email

Henry Ford furloughing 2,800 employees due to COVD-19 financial ...

Financial damage from the COVID-19 pandemic is forcing Detroit-based Henry Ford Health System to furlough 2,800 workers, the health system announced April 22. 

The six-hospital system decided to furlough employees who are not directly involved in patient care after recording a $43 million loss in operating income in March due to the cancellation of elective procedures, temporary site closures, and expenses related to personal protective equipment and other supplies needed to care for COVID-19 patients. The health system expects more significant losses in April and May.

“I know that news concerning furloughs is painful — especially for an organization like ours, whose greatest strength has always been our people,” Henry Ford President and CEO Wright Lassiter III wrote in an email to employees. “We value each team member’s unique contribution and this decision does not change that. But, we must face these realities head on.”

In addition to the furloughs, the health system’s executives and senior leaders will begin contributing 10 percent to 25 percent of their salaries to funds created to support employees.

Henry Ford Health reported a net operating loss of $36.2 million for the first three months of this year, compared to operating income of $39.4 million in the same period of 2019. 

 

 

 

 

Mayo Clinic furloughs, cuts hours of 30,000 employees to help offset $3B in pandemic losses

https://www.beckershospitalreview.com/finance/mayo-clinic-furloughs-cuts-hours-of-30-000-employees-to-help-offset-3b-in-pandemic-losses.html?utm_medium=email

Information for Orlando Residents - Orlando - Mayo Clinic

Rochester, Minn.-based Mayo Clinic said it will furlough or cut the hours of about 30,000 staff members to help offset about $3 billion in losses incurred by the COVID-19 pandemic, according to The Post Bulletin.

Mayo Clinic announced that it would need to take several cost cutting measures, including furloughs, earlier in April. However, the system didn’t disclose the number of employees that would be affected.

The temporary reduction in workforce is one of the ways the system is working to offset a $3 billion loss from the pandemic. Even with the cost-cutting measures, Mayo anticipates a $900 million shortfall this year.

The furloughs or reduced hours affect about 42 percent of Mayo Clinic’s 70,000 employees across its campuses in Arizona, Florida and Minnesota. 

Affected employees will still receive healthcare benefits.

The furloughs will begin in May and be spread throughout the rest of the year, Mayo Clinic spokesperson Ginger Plumbo told the publication. The duration of the furlough will vary depending on the hospital unit, she added.

The furloughs will not affect physicians at the system, but physicians will receive a 10 percent wage reduction. In addition, senior managers will receive pay cuts of 15 percent and top executives will take a 20 percent reduction.

The furloughs, cut hours and wage reductions are expected to save $1.4 billion.

Mayo Clinic also has been taking other cost-cutting measures, including a hiring freeze and halting major construction projects.

Mayo Clinic is also tapping into its reserves to bring $900 million in cash to the system.

 

 

 

 

The Health 202: States are ending their coronavirus lockdowns earlier than health roadmaps recommend

https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2020/04/23/the-health-202-states-are-ending-their-coronavirus-lockdowns-earlier-than-health-roadmaps-recommend/5ea09b5988e0fa34528d6eb8/?utm_campaign=wp_the_health_202&utm_medium=email&utm_source=newsletter&wpisrc=nl_health202

The Health 202: States are ending their coronavirus lockdowns ...

Over a nearly three-week span in March, most state governors across the nation locked down their states because of the novel coronavirus.

Gradually opening things up will take even longer — and probably will vary considerably from state to state.

Governors are feeling pressure from two sides. Many troubling questions about the coronavirus remain unanswered, such as how to get more Americans tested and whether the United States even has enough capacity to track and isolate virus cases. At the same time, they’re feeling immense pressure to restart economic activity, with tens of millions of Americans out of work and the country stuck in a deepening economic crater.

As governors weigh when and how to reopen public gathering spots, there are several road maps they could look to.

Yesterday the National Governors Association released a 10-point guide for states. The first point is to make coronavirus testing broadly available. It urges states to improve surveillance to detect outbreaks, ensure hospitals are equipped to respond to surges and create a plan to reopen in stages.

The plan also warns states against opening prematurely. 

“Opening without the tools in place to rapidly identify and stop the spread of the virus … could send states back into crisis mode, push health systems past capacity and force states back into strict social distancing measures,” it says.

Then there’s guidance from the Trump administration, which says states should first see a decrease in confirmed coronavirus cases over a 14-day period. That guidance is in line with what public health experts have recommended — although Trump has also frequently suggested he’d like to see states open sooner.

So far, governors vary widely in how they’re approaching the issue.

Some, like Trump, are chomping at the bit. Georgia Gov. Brian Kemp (R) is allowing businesses including gyms and barber shops to reopen on Friday. Colorado Gov. Jared Polis (D) has said some businesses may reopen on Monday, and retailers can have a limited number of in-store shoppers starting May 1.

Other governors are much more cautious. Virginia Gov. Ralph Northam (D), for example, has issued a stay-at-home order in effect until June 10. California Gov. Gavin Newsom (D) declined yesterday to name a date for easing restrictions, saying the state hasn’t reached its six goals before reopening the economy.

Newsom, however, did indicate progress has been made with his detailed playbook for reopening the state. After a phone conversation with Trump, the governor said the two had agreed to significantly ramp up testing across California, with hundreds of thousands of new swabs on the way and 86 new testing sites opening.

But virtually every governor is working on plans, some in coordination with other governors, on how to shape the post-quarantine world.

Here are the states opening things up first:

Georgia: Certain businesses may open on Friday; theaters and restaurants can reopen on Monday. Bars, nightclubs and music venues will remain closed; schools have been closed through the end of the school year.

Kemp explained his decision to reopen tanning salons, barber shops, massage parlors and bowling alleys, saying on Monday: “I see the terrible impact of covid-19 on public health as well as the pocketbook.” Kemp said he will urge businesses to take precautions, such as screening for fevers, spacing workstations apart and having workers wear gloves and masks “if appropriate,” my Washington Post colleagues William Wan, Carolyn Y. Johnson and Joel Achenbach report.

“Georgia, according to some models, is one of the last states that should be reopening,” they write. “The state has had more than 830 covid-19 deaths. It has tested fewer than 1 percent of its residents — low compared with other states and the national rate. And the limited amount of testing so far shows a high rate of positives, at 23 percent.”

Trump blasted Kemp’s decision during his briefing last night, saying it violates his administration’s phase 1 guidelines for when to reopen.

 

Colorado: Polis is allowing the state’s stay-at-home order to expire Sunday, after which the state will gradually reopen businesses. Starting May 4, nonessential offices may have 50 percent of their workforce at the site, although large workplaces will be advised to conduct symptom and temperature checks.

Polis has warned the restrictions won’t all be lifted at the same time.

“The virus will be with us,” he said earlier this month. “We have to find a sustainable way that will be adapted in real time to how we live with it.”

 

South Carolina: Gov. Henry McMaster (R) said Monday he was allowing nonessential businesses such as department stores and retailers to open, followed by beaches on Tuesday.

But businesses must follow three rules for operating: They must limit the number of customers in the store; require patrons to be six feet apart; and follow sanitation guidelines from the Centers for Disease Control and Prevention.

“I urge everyone to remember we are still in a very serious situation,” McMaster said at a news conference. “We know that this disease, this virus, spreads easily, and we know it is deadly. So we must be sure that we continue to be strict and disciplined with our social discipline and taking care not to infect others.”

 

Tennessee: Gov. Bill Lee (R) said he plans to allow some businesses to reopen once his “safer-at-home” order expires in one week. But the state’s biggest cities will make their own reopening determinations. Lee has appointed a 30-member economic recovery group to create a plan.

Lee, along with Kemp and McMaster, have met with the governors of Mississippi, Alabama and Florida to consider how to reopen their economies in a coordinated way in the country’s southeast region. The number of new cases and deaths in Florida has leveled off somewhat — something the state’s governor, Ron DeSantis (R), has been pointing to as he urges a speedy reopening in his state.

Ahh, oof and ouch

AHH: CDC Director Robert Redfield confirmed comments he made to our colleague Lena H. Sun after Trump claimed he’d been “misquoted.”
Trump claims his CDC director was ‘misquoted’ on second wave of covid-19
Director of the Centers for Disease Control and Prevention Robert Redfield said April 22 that his statement on covid-19 in the fall is “accurately quoted.” (The Washington Post)

The president took issue with the portrayal of comments from Redfield following an interview with our Post colleague Lena H. Sun. In that interview, Redfield warned that a second wave of the coronavirus could be worse than the current one.

“There’s a possibility that the assault of the virus on our nation next winter will actually be even more difficult than the one we just went through,” Redfield told Lena. He added: “We’re going to have the flu epidemic and the coronavirus epidemic at the same time.”

The president again repeated the claim at his daily White House coronavirus task force briefing – this time, with Redfield standing awkwardly next to him.

Redfield then said this: “I’m accurately quoted in The Washington Post.”

But Redfield also sought to “soften his words as the president glowered next to him,” Lena, Ashley Parker, Josh Dawsey and Yasmeen Abutaleb write.

“The remarkable spectacle provided another illustration of the president’s tenuous relationship with his own administration’s scientific and public health experts, where the unofficial message from the Oval Office is an unmistakable warning: Those who challenge the president’s erratic and often inaccurate coronavirus views will be punished — or made to atone,” they write.

Ahh, oof and ouch

AHH: CDC Director Robert Redfield confirmed comments he made to our colleague Lena H. Sun after Trump claimed he’d been “misquoted.”
Trump claims his CDC director was ‘misquoted’ on second wave of covid-19

It’s apparent “Trump is again bristling at a health official offering too dire a scenario,” our colleague Aaron Blake writes. He points out that Trump was set off a previous time when another top CDC official warned in February that the spread of the coronavirus was inevitable.

OOF: The former head of the U.S. agency pursuing a coronavirus vaccine says he was ousted for opposing efforts to promote hydroxychloroquine, a drug Trump has insistently touted as a weapon against the virus despite a lack of scientific proof.

Rick Bright, previously the director of the Biomedical Advanced Research and Development Authority, said he was dismissed and pushed into a narrower role after he called for strictly vetting supposed treatments like anti-malarials repeatedly embraced publicly by the president. 

“I believe this transfer was in response to my insistence that the government invest the billions of dollars allocated by Congress to address the Covid-19 pandemic into safe and scientifically vetted solutions, and not in drugs, vaccines and other technologies that lack scientific merit,” Bright said in a statement, according to the New York Times’s Michael D. Shear and Maggie Haberman.

He added: “I am speaking out because to combat this deadly virus, science — not politics or cronyism — has to lead the way.” 

The president was asked about Bright during last night’s briefing and whether the official was pushed out.

“Maybe he was and maybe he wasn’t. I don’t know who he is,” Trump responded.

OUCH: There were early missteps by Health and Human Services Secretary Alex Azar that bogged down the government’s response to the virus.

In late January, days after the first coronavirus case was confirmed in the United States, Azar told Trump in a meeting the coronavirus spread was “under control,” the Wall Street Journal’s Rebecca Ballhaus and Stephanie Armour report. Azar also told the president more than a million diagnostic tests would be available in weeks and that it was the “fastest we’ve ever created a test.”

These promises didn’t pan out.

“Six weeks after that Jan. 29 meeting, the federal government declared a national emergency and issued guidelines that effectively closed down the country,” Rebecca and Stephanie write. “Mr. Azar, who had been at the center of the decision-making from the outset, was eventually sidelined.”

There were numerous factors that slowed the administration’s initial coronavirus response, but “interviews with more than two dozen administration officials and others involved in the government’s coronavirus effort show that Mr. Azar waited for weeks to brief the president on the threat, oversold his agency’s progress in the early days and didn’t coordinate effectively across the health-care divisions under his purview,” they report.

Earlier this year, Azar tapped an aide to lead HHS’s day-to-day coronavirus response who had joined the agency after running a dog-breeding business for six years. 

The aide, Brian Harrison, was derisively called “the dog breeder” by some within the White House, Reuters’s Aram Roston and Marisa Taylor report.

“Azar’s optimistic public pronouncement and choice of an inexperienced manager are emblematic of his agency’s oft-troubled response to the crisis,” they add. “… Harrison, 37, was an unusual choice, with no formal education in public health, management, or medicine and with only limited experience in the fields. In 2006, he joined HHS in a one-year stint as a ‘Confidential Assistant’ to Azar, who was then deputy secretary. He also had posts working for Vice President Dick Cheney, the Department of Defense and a Washington public relations company.”

There’s much we don’t know about the coronavirus

Scientists say a mysterious blood-clotting complication may be causing a number of the coronavirus-related deaths.

Doctors are learning that covid-19, once believed to be a straightforward respiratory virus, is much more frightening. Since the earlier waves of coronavirus cases, doctors have learned that the disease attacks not just lungs but kidneys, the heart, intestines, liver and the brain. Autopsies also have shown that some coronavirus patients lungs were filled with hundreds of microclots, our Post colleague Ariana Eunjung Cha reports.

“The problem we are having is that while we understand that there is a clot, we don’t yet understand why there is a clot,” said Lewis Kaplan, a University of Pennsylvania physician and head of the Society of Critical Care Medicine. “We don’t know. And therefore, we are scared.”

“In hindsight, there were hints blood problems had been an issue in China and Italy as well, but it was more of a footnote in studies and on information-sharing calls that had focused on the disease’s destruction of the lungs,” Ariana writes.

New data provide troubling statistics about coronavirus patients on ventilators.

A study found 88 percent of 320 coronavirus patients on ventilators in New York state’s largest health system died.

It’s an uptick from pre-pandemic figures. “That compares with the roughly 80 percent of patients who died on ventilators before the pandemic, according to previous studies — and with the roughly 50 percent death rate some critical care doctors had optimistically hoped when the first cases were diagnosed,” Ariana reports.

The research, published in the journal JAMA, also notes many of the hospitalized had other conditions.

“The paper also found that of those who died, 57 percent had hypertension, 41 percent were obese and 34 percent had diabetes, which is consistent with risk factors listed by the Centers for Disease for Control and Prevention,” she adds. “Noticeably absent from the top of the list was asthma. As doctors and researchers have learned more about covid-19, the less it seems that asthma plays a dominant role in outcomes.”

The economic fallout

If there’s a recovery from the current economic downswing this year, it could be temporary, economists warn.

There’s a growing chance of a second economic downturn if there’s another surge of the coronavirus or if there’s an increase in bankruptcies and defaults, our Post colleague Heather Long reports.

Instead of a V-shaped recovery, economists say, it is increasingly likely that the recovery will be W-shaped, in which there are improvements before another downturn later this year or in the following year. That possibility is “in part because creating a vaccine is likely to take at least a year and millions of Americans and businesses are piling up debt without an easy ability to repay it,” Heather writes.

“It could be triggered by reopening the economy too quickly and seeing a second spike in deaths from covid-19, the disease the coronavirus causes,” she adds. “… This could cause many businesses, which were barely hanging on, to close again. Many Americans could become even more afraid to venture out until a vaccine is found.”

“Pretending the world will return to normal in three months or six months is just wrong,” said Diane Swonk, chief economist at Grant Thornton, told The Post. “The economy went into an ice age overnight. We’re in a deep freeze. As the economy thaws, we’ll see the damage done as well. Flooding will occur.”

https://www.nga.org/wp-content/uploads/2020/04/NGA-Report.pdf?utm_campaign=wp_the_health_202&utm_medium=email&utm_source=newsletter&wpisrc=nl_health202

 

 

 

 

Here are the innovations we need to reopen the economy

https://www.washingtonpost.com/opinions/2020/04/23/bill-gates-here-are-innovations-we-need-reopen-economy/?arc404=true

Bill Gates: Here are the innovations we need to reopen the economy ...

Bill Gates is a co-chair of the Bill & Melinda Gates Foundation. This article is adapted from his blog post “Pandemic I: the First Modern Pandemic,” available at gatesnotes.com.

It’s entirely understandable that the national conversation has turned to a single question: “When can we get back to normal?” The shutdown has caused immeasurable pain in jobs lost, people isolated and worsening inequity. People are ready to get going again.

Unfortunately, although we have the will, we don’t have the way — not yet. Before the United States and other countries can return to business and life as usual, we will need some innovative new tools that help us detect, treat and prevent covid-19.

It begins with testing. We can’t defeat an enemy if we don’t know where it is. To reopen the economy, we need to be testing enough people that we can quickly detect emerging hotspots and intervene early. We don’t want to wait until the hospitals start to fill up and more people die.

Innovation can help us get the numbers up. The current coronavirus tests require that health-care workers perform nasal swabs, which means they have to change their protective gear before every test. But our foundation supported research showing that having patients do the swab themselves produces results that are just as accurate. This self-swab approach is faster and safer, since regulators should be able to approve swabbing at home or in other locations rather than having people risk additional contact.

Another diagnostic test under development would work much like an at-home pregnancy test. You would swab your nose, but instead of sending it into a processing center, you’d put it in a liquid and then pour that liquid onto a strip of paper, which would change color if the virus was present. This test may be available in a few months.

We need one other advance in testing, but it’s social, not technical: consistent standards about who can get tested. If the country doesn’t test the right people — essential workers, people who are symptomatic and those who have been in contact with someone who tested positive — then we’re wasting a precious resource and potentially missing big reserves of the virus. Asymptomatic people who aren’t in one of those three groups should not be tested until there are enough for everyone else.

The second area where we need innovation is contact tracing. Once someone tests positive, public-health officials need to know who else that person might have infected.

For now, the United States can follow Germany’s example: interview everyone who tests positive and use a database to make sure someone follows up with all their contacts. This approach is far from perfect, because it relies on the infected person to report their contacts accurately and requires a lot of staff to follow up with everyone in person. But it would be an improvement over the sporadic way that contact tracing is being done across the United States now.

An even better solution would be the broad, voluntary adoption of digital tools. For example, there are apps that will help you remember where you have been; if you ever test positive, you can review the history or choose to share it with whoever comes to interview you about your contacts. And some people have proposed allowing phones to detect other phones that are near them by using Bluetooth and emitting sounds that humans can’t hear. If someone tested positive, their phone would send a message to the other phones, and their owners could get tested. If most people chose to install this kind of application, it would probably help some.

Naturally, anyone who tests positive will immediately want to know about treatment options. Yet, right now, there is no treatment for covid-19. Hydroxychloroquine, which works by changing the way the human body reacts to a virus, has received a lot of attention. Our foundation is funding a clinical trial that will give an indication whether it works on covid-19 by the end of May, and it appears the benefits will be modest at best.

But several more-promising candidates are on the horizon. One involves drawing blood from patients who have recovered from covid-19, making sure it is free of the coronavirus and other infections, and giving the plasma (and the antibodies it contains) to sick people. Several major companies are working together to see whether this succeeds.

Another type of drug candidate involves identifying the antibodies that are most effective against the novel coronavirus, and then manufacturing them in a lab. If this works, it is not yet clear how many doses could be produced; it depends on how much antibody material is needed per dose. In 2021, manufacturers may be able to make as few as 100,000 treatments or many millions.

If, a year from now, people are going to big public events — such as games or concerts in a stadium — it will be because researchers have discovered an extremely effective treatment that makes everyone feel safe to go out again. Unfortunately, based on the evidence I’ve seen, they’ll likely find a good treatment, but not one that virtually guarantees you’ll recover.

That’s why we need to invest in a fourth area of innovation: making a vaccine. Every additional month that it takes to produce a vaccine is a month in which the economy cannot completely return to normal.

The new approach I’m most excited about is known as an RNA vaccine. (The first covid-19 vaccine to start human trials is an RNA vaccine.) Unlike a flu shot, which contains fragments of the influenza virus so your immune system can learn to attack them, an RNA vaccine gives your body the genetic code needed to produce viral fragments on its own. When the immune system sees these fragments, it learns how to attack them. An RNA vaccine essentially turns your body into its own vaccine manufacturing unit.

There are at least five other efforts that look promising. But because no one knows which approach will work, a number of them need to be funded so they can all advance at full speed simultaneously.

Even before there’s a safe, effective vaccine, governments need to work out how to distribute it. The countries that provide the funding, the countries where the trials are run, and the ones that are hardest-hit will all have a good case that they should receive priority. Ideally, there would be global agreement about who should get the vaccine first, but given how many competing interests there are, this is unlikely to happen. Whoever solves this problem equitably will have made a major breakthrough.

World War II was the defining moment of my parents’ generation. Similarly, the coronavirus pandemic — the first in a century — will define this era. But there is one big difference between a world war and a pandemic: All of humanity can work together to learn about the disease and develop the capacity to fight it. With the right tools in hand, and smart implementation, we will eventually be able to declare an end to this pandemic — and turn our attention to how to prevent and contain the next one.

 

 

 

Beaumont-Summa merger on pause as COVID-19 batters hospitals

https://www.healthcaredive.com/news/beaumont-summa-merger-on-pause-as-covid-19-batters-hospitals/576535/

Dive Brief:

  • Michigan’s largest health system, Beaumont Health, is delaying its merger with Ohio-based Summa Health as the two continue to battle the coronavirus pandemic. “We didn’t plan this, but we are deferring that [the merger] until we have a little more clarity about the impact of this crisis,” Beaumont Health CEO John Fox said Wednesday.
  • Beaumont said it is temporarily laying off more than 2,400 employees, or nearly 7% of its workforce, as the pandemic has forced the system to halt inpatient and outpatient surgeries, cutting off an entire revenue stream. Among the job cuts, 450 positions have been permanently eliminated, while most of the other 2,400-plus positions involved administrative staff and others who are not directly caring for patients. Administrators have also said they’re taking pay cuts and Fox’s pay has been reduced by 70%.
  • The deal was recently approved by state and federal regulatory agencies, Summa Health told Healthcare Dive.

Dive Insight:

The deal is still on the table and the two are working on finalizing a path forward, Summa Health told Healthcare Dive.

“That said, the immediate priority is for both Summa and Beaumont to focus first and foremost on caring for our patients, employees, physicians and communities as we are impacted by the COVID-19 pandemic,” a spokesperson said.

The marriage between the two health systems is supposed to give Beaumont Health a foothold in Northeast Ohio, putting it in closer competition with Cleveland Clinic. In addition to its four hospitals, Summa also operates its own health plan, SummaCare, which provides coverage to 46,000 people.

Beaumont operates eight hospitals with 145 outpatient sites and has 38,000 employees.

Earlier this year, the two signed a definitive agreement and, together, Beaumont and Summa, are expected to create a $6.1 billion system in terms of total annual revenue with $4.7 billion from Beaumont and $1.4 billion from Summa.

However, the fallout from COVID-19 is likely to hamper those figures.

Beaumont reported a net loss of about $278 million during the first quarter of 2020, compared to about $408 million during the prior-year period. The system reported the virus only started affecting it in the last two weeks of March.

 

 

 

 

Operating margins plummet at US hospitals, Kaufman Hall says

https://www.healthcaredive.com/news/Kaufman-hospitals-operating-margin-decline/576491/

Third Quarter Investment Report: Moving Into Choppy Waters « CPEA ...

Dive Brief:

  • Operating margins at the nation’s hospitals have plummeted due to large-scale volume and revenue declines coupled with flat to rising expenses, according to a new report from Kaufman Hall.
  • Based on March data from more than 800 U.S. hospitals, average operating margins dropped 150% year over year, plunging non-profit hospitals, which historically operate on already thin margins, into troublesome territory.
  • The data paint a dire picture for U.S. hospitals. “These initial numbers only reflect the first two weeks of the COVID-19 response and likely indicate more negative results in the future,” Jim Blake, managing director at Kaufman Hall, said in a statement.

Dive Insight:

Hospitals depend heavily on elective surgeries for revenue, but had to cancel or postpone many of them starting last month in order to preserve coveted COVID-19 resources such as personal protective equipment, beds and staff.

Those measures have upended the financial health of the entire industry in a matter of just weeks, according to new data and analysis from Kaufman Hall.

“We anticipate April will be significantly worse, and at this point, no one knows how long hospitals will continue on their current path,” Blake said.

Despite the ongoing pandemic, patient volumes overall have plunged. During March, the median hospital occupancy rate was 53%, with operating room minutes down 20% year-over-year and emergency room visits down 15% year over year, according to the report.

At the same time, hospitals’ labor expenses were up 3% year over year, and non-labor expenses were up 1%. In order to rein in operating costs, some health systems have begun to furlough or lay off workers.

While non-profit systems are especially vulnerable given their razor-thin margins, major for-profit systems are also struggling financially.

HCA Healthcare, Community Health Systems and Tenet Healthcare have all pulled their 2020 guidance in response to the pandemic. In its first quarter report Tuesday, HCA attributed a steep decrease in volumes and 45% drop in profit to the pandemic.

And Jefferies analyst wrote in a note Tuesday they are reducing their volume and earnings expectations for those companies for this year and 2021 based on the pandemic. “Our belief is that high unemployment translates to reduced commercial insurance coverage and disposable income to fund co-pays/deductibles, which results in fewer physician visits and procedures,” they wrote.

Under these circumstances, the federal government has attempted to financially support struggling hospitals through ongoing coronavirus relief legislation.

First came accelerated Medicare payments based on reimbursement data, in the form of loans that providers will have to pay back.

Separately, the Coronavirus Aid, Relief, and Economic Security Act passed by Congress in March benchmarked $100 billion in funding to provide financial support to struggling hospitals.

$30 billion first round was announced April 8 and given to providers based on historic Medicare payments. A second round of CARES act funding for systems in hot spots is next, although the timing is unclear.

On Tuesday the Senate approved a separate $484 billion aid package, the Paycheck Protection Program and Health Care Enhancement Act, that would send an additional $75 billion in emergency funds to hospitals. It also allocates $25 billion to expand testing for the virus across the country.

The White House expressed support for the package. It still needs House approval, which could happen as soon as this week.

The latest package comes in response to depleted funding for the Small Business Administration’s Paycheck Protection Program. Upon replenishing those funds, smaller health systems may be eligible for forgivable PPP loans used to meet payroll and other operating costs, but only if they have 500 or fewer employees.

 

 

 

 

Hospitals to get $75B in latest round of COVID-19 funding passed by Senate

https://www.healthcaredive.com/news/hospitals-to-get-75b-in-latest-round-of-covid-19-funding-passed-by-senate/576466/

Jobs: A Historic Topic When Presidents Address Congress ...

Dive Brief:

  • Hospitals are set to get $75 billion in the next round of emergency funding for the country’s COVID-19 response as the Senate approved legislation Tuesday and the White House expressed support. The House of Representatives could return for a vote as soon as this week.
  • The amount is three-quarters of what various hospital groups had requested as their facilities face a major financial hit from the pandemic. Most have stopped lucrative elective procedures at the same time expenses rise due to increased need for staff and specialty supplies to treat the virus. Still, hospitals commended the legislation, saying it would “help ensure that critical care can continue to be provided by frontline providers throughout the country.”
  • The Paycheck Protection Program and Health Care Enhancement Act allocates another $25 billion for expanding and administering COVID-19 testing for active infection and prior exposure as well as conducting surveillance and contact tracing.

Dive Insight:

Major hospital operators HCA Healthcare, Community Health Systems and Tenet Healthcare have all pulled their 2020 guidance as they adjust for the influx of COVID-19 patients across the country.

In its first quarter report Tuesday, HCA attributed a steep decrease in volumes and 45% drop in profit to the pandemic. “We do believe the impact to the company will be most pronounced during this current response phase, as volume continues to decline throughout April,” HCA CFO Bill Rutherford told investors Tuesday.

Hospitals received $100 billion in the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act passed last month and the first tranche of that funding has already been deposited in facilities’ bank accounts, based on historic Medicare payments.

The second round will be targeted to reach providers in hot spots and those not included previously, CMS has said. The agency has declined to give further details or an update on timing, however.

The American Hospital Association said in a statement the CARES funds “are already being used by hospitals and health systems to increase capacity and provide care, and in some cases to keep access to care available by keeping the doors open.”

And while the agency touted the funding as “no strings attached,” terms and conditions subsequently put out have given some providers pause.

CMS has made other attempts to help hospitals financially. The CARES Act includes a 20% bump to payments for treating COVID-19 and the agency has sent billions in expedited Medicare payments as hospitals request them.

Hospitals warned Tuesday that HHS should distribute funds quickly. “While we appreciate Congress taking swift action — more still needs to be done to defeat COVID,” the Federation of American Hospitals said in a statement. “It is important that HHS distributes the funding in a timely, well-targeted fashion. And it remains mission-critical to reform the Medicare Accelerated Payment Program so that it does not impede hospitals’ ability to meet patient needs.”

 

 

 

 

Envision hires restructuring advisers, considers bankruptcy filing

https://www.beckershospitalreview.com/finance/envision-hires-restructuring-advisers-considers-bankruptcy-filing.html?utm_medium=email

Envision Healthcare Said to Be Considering Bankruptcy, 2 Years ...

Envision Healthcare, a Nashville, Tenn.-based physician staffing company owned by private equity firm KKR, is struggling to manage its $7 billion debt load and recently hired lawyers and an investment bank to advise on its restructuring options, sources told Bloomberg.

The company is looking at restructuring options, including a potential Chapter 11 bankruptcy filing, as it faces financial pressure from the COVID-19 pandemic, according to Bloomberg. Envision has seen a significant decline in patient volume across its practices and specialties during the pandemic.  

No decision has been made on a course of action for Envision, and the company is still seeking to ease its debt burden by swapping $1.2 billion of unsecured notes for a new term loan. Creditors have until the end of the month to decide whether to participate in the deal.

The company is exploring its restructuring options after taking several steps to improve its financial position, including holding back pay for physicians, reducing salaries of senior leadership and furloughing nonclinical staff. The company said clinical pay will be reduced in services with low patient volumes, and performance-based bonuses and clinician profit-sharing will be delayed until the fall. Additionally, Envision temporarily suspended retirement contributions, merit increases and promotions for all employees.

About a week after Envision implemented many of the changes, U.S. Sen. Elizabeth Warren of Massachusetts and U.S. Rep. Katie Porter of California sent a letter to Envision and other healthcare staffing companies backed by private equity regarding pay and benefits.

The letter, which Ms. Porter posted on Twitter, said Envision is cutting its physicians’ pay and benefits, “all while our doctors face new financial strains of their own” amid the COVID-19 pandemic.

In response, Envision cited challenges healthcare organizations are facing.

“The nation’s healthcare system has experienced a drastic drop in patient volume since the beginning of the COVID-19 crisis,” wrote Envision, which has more than 40,000 team members, 27,000 of whom are physicians and clinicians. “Even as COVID-19 fills emergency departments in hot spots around the country, Envision’s overall emergency volume is actually down 45 percent.”

Hospital and physician groups are trying to secure funds from the Coronavirus Aid, Relief and Economic Security Act and get additional aid. Though the private equity industry is lobbying Washington to gain access to the funds, it remains unclear whether private equity-backed companies like Envision will receive the emergency government funds. 

 

 

 

 

39 hospitals get negative rating outlook from S&P amid pandemic

https://www.beckershospitalreview.com/finance/39-hospitals-get-negative-rating-outlook-from-s-p-amid-pandemic.html?utm_medium=email

Standard & Poor's lowers credit rating outlook to negative

S&P Global Ratings has revised the rating outlook for 39 hospitals to negative from stable due to the financial hit caused by the COVID-19 pandemic.

The affected hospitals have speculative-grade ratings or have about 100 days’ cash on hand or less, S&P said.

A negative outlook reflects S&P’s view that there is a 33 percent chance that operating and economic conditions will worsen to a degree that will cause a rating downgrade.

Below are the 39 hospitals or obligated groups, and their current rating:

1. Atrius Health (Auburndale, Mass.) — “BBB”
2. Bibb County Healthcare Authority (Centreville, Ala.) — “BB”
3. Dawson County Hospital District (Lamessa, Texas) — “CCC”
4. Delta (Colorado) County Memorial Hospital District — “BB”
5. Ector County Hospital District (Odessa, Texas) — “BBB”
6. Genesis HealthCare System (Zanesville, Ohio) — “BB+”
7. Grand River Hospital District (Rifle, Colo.) — “BB+”
8. Griffin Health Services (Derby, Conn.) — “BB+”
9. Guadalupe Regional Medical Center (Seguin, Texas) — “BB”
10. Hardin Memorial Hospital (Elizabethtown, Ky.) — “A-”
11. Holy Name Medical Center (Teaneck, N.J.) — “BBB”
12. Jackson Hospital and Clinic (Montgomery, Ala.) — “BBB-”
13. Jefferson County Public Hospital District No. 2 (Port Townsend, Wash.) — “BB+”
14. Jennie Stuart Medical Center (Hopkinsville, Ky.) — “BB+”
15. Lifespan (Providence, R.I.) — “BBB+”
16. Loma Linda (Calif.) University Medical Center — “BB-”
17. Madison Memorial Hospital (Rexburg, Idaho) — “BB+”
18. Milford (Mass.) Regional Medical Center — “BB+”
19. Mohawk Valley Health System (Utica, N.Y.) — “BB+”
20. National Jewish Health (Denver) — “BB+”
21. Nicholas H. Noyes Memorial Hospital (Dansville, N.Y.) — “BB”
22. North Oaks Health System (Hammond, La.) — “BB+”
23. Oak Valley Hospital District (Oakdale, Calif.) — “BB”
24. Opelousas (La.) General Hospital Authority — “BB+”
25. Oroville (Calif.) Hospital — “BB+”
26. OU Medicine (Oklahoma City) — “BB+”
27. Palomar Health (Poway, Calif.) — “BBB”
28. Pomona (Calif.) Valley Hospital Medical Center — “BBB”
29. Pullman (Wash.) Regional Hospital — “BBB-”
30. Rochester (N.Y.) General Hospital — “A-”
31. Ryder Memorial Hospital (Humacao, Puerto Rico) — “CCC”
32. Samaritan Medical Center (Watertown, N.Y.) — “BBB-”
33. Southeastern Regional Medical Center (Lumberton, N.C.) — “BBB+”
34. SoutheastHealth (Cape Girardeau, Mo.) — “BBB-”
35. Southwest Louisiana Hospital Association (Lake Charles) — “BB+”
36. Temple University Health System (Philadelphia) — “BBB-”
37. Westchester County Health Care Corporation (Valhalla, N.Y.) — “BBB-”
38. White River Health System (Batesville, Ark.) — “BBB-”
39. Winkler County Hospital District (Kermit, Texas) — “BB+”

 

 

 

Tower Health furloughs 1,000 workers amid dramatic revenue drop

https://www.beckershospitalreview.com/finance/tower-health-furloughs-1-000-workers-amid-dramatic-revenue-drop.html?utm_medium=email

Under financial pressure from the COVID-19 pandemic, Philadelphia-based Tower Health has furloughed at least 1,000 employees, according to The Philadelphia Inquirer

Tower Health implemented the furloughs, which affect roughly 7 percent of the system’s 14,000-person workforce, after suspending elective procedures and shutting down many of its outpatient clinics. The seven-hospital system said it has lost as much as half its revenue, according to the report. 

Tower Health received more than $23 million in grants made available under the Coronavirus Aid, Relief and Economic Security Act, but it’s still facing financial pressure.

“These funds, while helpful, do not come close to making up for the decline in revenue Tower Health has experienced in March and into April,” a spokesperson told The Philadelphia Inquirer.

Tower Health joins more than 150 other hospitals and health systems across the U.S. that have furloughed workers in recent months.