Category Archives: Financially Distressed

Minneapolis Fed president: ‘The worst is yet to come on the job front’

Posted on by • Posted in 2020 Election Issues, Bankruptcy, Cash, Cash Reserves, Clinical Testing, Contact Tracing, Economic Crisis, Economy Reopening, Employee Furlough, Employee Hiring Freeze, Employee Layoffs, Employee Pay Cuts, Employee Protections, Employer-Based Health Insurance, Financially Distressed, Health Insurance Coverage Adequacy, Health Policy, Infection Control, Infectious Virus, Job, Job Market, Job Search, Job Security, Leadership Decentralized, Mortality, Out of Pocket Expenses, Pandemic, Preexisting Conditions, Public Health, Public Safety, Quarantine, Social Distancing, Underinsured, Unemployment, Unemployment Insurance, Uninsured • Leave a comment

https://thehill.com/homenews/sunday-talk-shows/497006-minneapolis-fed-president-the-worst-is-yet-to-come-on-the-job?rnd=1589121753

Minneapolis Fed president: 'The worst is yet to come on the job ...

The president of the Federal Reserve Bank of Minneapolis said Sunday that the “worst is yet to come” after a record of 20 million people lost their jobs amid furloughs and layoffs sparked by the coronavirus pandemic in April. 

“I mean the worst is yet to come on the job front, unfortunately,” Neel Kashkari said on ABC’s “This Week.”

“We may be in an environment of gradual relaxing and then having to clamp back down again around the country as the virus continues to spread,” he added. “To solve the economy, we must solve the virus. Let’s never lose sight of that fact.”

Kashkari also contradicted White House economic adviser Larry Kudlow’s prediction for a financially strong half of 2020 and full 2021 when ABC’s George Stephanopoulos asked if that was realistic.

“You know, I wish it were,” he responded. “What I’ve learned in the last few months, unfortunately, this is more likely to be a slow, more gradual recovery.”

The Minneapolis Fed president said a “robust economy” would require a breakthrough in vaccines, testing and therapies. 

“I don’t know when we’re going to have that confidence,” he said, adding, “and ultimately, the American people are going to decide how long the shutdown is.”

The Department of Labor reported last week that the unemployment rate had reached 14.7 percent, which is the highest since the U.S. began tracking in 1948. More than 33 million people have applied for unemployment claims since mid-March. 

Speaking earlier Sunday on “This Week,” Kudlow acknowledged that “very difficult” unemployment numbers could likely be reported in May. But he added that there is a “glimmer of hope” within the unemployment data, with 80 percent of the claims involving those who were furloughed or going through temporary layoffs. 

 

 

 

 

Doctors Without Patients: ‘Our Waiting Rooms Are Like Ghost Towns’

Posted on by • Posted in 2020 Election Issues, Antitrust, Bankruptcy, Cash, Cash Reserves, Coronavirus, Crisis, Crisis Management, Economic Crisis, Financially Distressed, Market Consolidation, Market Power, Market Share, Medical Group, Medicare, Pandemic, Physician, Physician Practice Management, Primary Care, Private Equity, Public Health, Public Safety, Vaccination, Vaccine • Leave a comment

18 of the Spookiest Ghost Towns in America - Most Haunted Places

As visits plummet because of the coronavirus, small physician practices are struggling to survive.

Autumn Road in Little Rock, Ark., is the type of doctor’s practice that has been around long enough to be treating the grandchildren of its eldest patients.

For 50 years, the group has been seeing families like Kelli Rutledge’s. A technician for a nearby ophthalmology practice, she has been going to Autumn Road for two decades.

The group’s four doctors and two nurse practitioners quickly adapted to the coronavirus pandemic, sharply cutting back clinic hours and switching to virtual visits to keep patients and staff safe.

When Kelli, 54, and her husband, Travis, 56, developed symptoms of Covid-19, the couple drove to the group’s office and spoke to the nurse practitioner over the phone. “She documented all of our symptoms,” Ms. Rutledge said. They were swabbed from their car.

While the practice was never a big moneymaker, its revenues have plummeted. The number of patients seen daily by providers has dropped to half its average of 120. The practice’s payments from March and April are down about $150,000, or roughly 40 percent.

“That won’t pay the light bill or the rent,” said Tabitha Childers, the administrator of the practice, which recently laid off 12 people.

While there are no hard numbers, there are signs that many small groups are barely hanging on. Across the country, only half of primary care doctor practices say they have enough cash to stay open for the next four weeks, according to one study, and many are already laying off or furloughing workers.

“The situation facing front-line physicians is dire,” three physician associations representing more than 260,000 doctors, wrote to the secretary of health and human services, Alex M. Azar II, at the end of April. “Obstetrician-gynecologists, pediatricians, and family physicians are facing dramatic financial challenges leading to substantial layoffs and even practice closures.”

By another estimate, as many as 60,000 physicians in family medicine may no longer be working in their practices by June because of the pandemic.

The faltering doctors’ groups reflect part of a broader decline in health care alongside the nation’s economic downturn. As people put off medical appointments and everything from hip replacements to routine mammograms, health spending dropped an annualized rate of 18 percent in the first three months of the year, according to recent federal data.

While Congress has rushed to send tens of billions of dollars to the hospitals reporting large losses and passed legislation to send even more, small physician practices in medicine’s least profitable fields like primary care and pediatrics are struggling to stay afloat. “They don’t have any wiggle room,” said Dr. Lisa Bielamowicz, a co-founder of Gist Healthcare, a consulting firm.

None of the money allocated by lawmakers has been specifically targeted to the nation’s doctors, although the latest bill set aside funds for community health centers. Some funds were also set aside for small businesses, which would include many doctors’ practices, but many have faced the same frustration as other owners in finding themselves shut out of much of the funding available.

Federal officials have taken some steps to help small practices, including advancing Medicare payments and reimbursing doctors for virtual visits. But most of the relief has gone to the big hospital and physician groups. “We have to pay special attention to these independent primary care practices, and we’re not paying special attention to them,” said Dr. Farzad Mostashari, a former health official in the Obama administration, whose company, Aledade, works with practices like Autumn Road.

“The hospitals are getting massive bailouts,” said Dr. Christopher Crow, the president of Catalyst Health Network in Texas. “They’ve really left out primary care, really all the independent physicians,” he said.

“Here’s the scary thing — as these practices start to break down and go bankrupt, we could have more consolidation among the health care systems,” Dr. Crow said. That concerns health economists, who say the steady rise in costs is linked to the clout these big hospital networks wield with private insurers to charge high prices.

While the pandemic has wreaked widespread havoc across the economy, shuttering restaurants and department stores and throwing tens of millions of Americans out of work, doctors play an essential role in the health of the public. In addition to treating coronavirus patients who would otherwise show up at the hospital, they are caring for people with chronic diseases like diabetes and asthma.

Keeping these practices open is not about protecting the doctors’ livelihoods, said Michael Chernew, a health policy professor at Harvard Medical School. “I worry about how well these practices will be able to shoulder the financial burden to be able to meet the health care needs people have,” he said.

“If practices close down, you lose access to a point of care,” said Dr. Chernew, who was one of the authors of a new analysis published by the Commonwealth Fund that found doctor’s visits dropped by about 60 percent from mid-March to mid-April. The researchers used visit data from clients of a technology firm, Phreesia.

Nearly 30 percent of the visits were virtual as doctors rushed to offer telemedicine as the safest alternative for their staff and patients. “It’s remarkable how quickly it was embraced,” said Dr. Ateev Mehrotra, a hospitalist and associate professor of health policy at Harvard Medical School, who was also involved in the study. But even with virtual visits, patient interaction was significantly lower.

Almost half of primary care practices have laid off or furloughed employees, said Rebecca Etz, an associate professor of family medicine at Virginia Commonwealth University and co-director of the Larry A. Green Center, which is surveying doctors with the Primary Care Collaborative, a nonprofit group. Many practices said they did not know if they had enough cash to stay open for the next month.

Pediatricians, which are among the lowest paid of the medical specialties, could be among the hardest hit. Federal officials used last year’s payments under the Medicare program to determine which groups should get the initial $30 billion in funds. Because pediatricians don’t generally treat Medicare patients, they were not compensated for the decline in visits as parents chose not to take their children to the doctor and skipped their regular checkups.

“This virus has the potential to essentially put pediatricians out of business across the country,” said Dr. Susan Sirota, a pediatrician in Chicago who leads a network of a dozen pediatric practices in the area. “Our waiting rooms are like ghost towns,” she said.

Pediatricians have also ordered tens of thousands of dollars on vaccines for their patients at a time when vaccine rates have plunged because of the pandemic, and they are now working with the manufacturers to delay payments for at least a time. “We don’t have the cash flow to pay them,” said Dr. Susan Kressly, a pediatrician in Warrington, Pa.

Even those practices that quickly ramped up their use of telemedicine are troubled. In Albany, Ga., a community that was an unexpected hot spot for the virus, Dr. Charles Gebhardt, a doctor who is treating some infected patients, rapidly converted his practice to doing nearly everything virtually. Dr. Gebhardt also works with Aledade to care for Medicare patients.

But the telemedicine visits are about twice as long as a typical office visit, Dr. Gebhardt said. Instead of seeing 25 patients a day, he may see eight. “We will quickly go broke at this rate,” he said.

Although he said the small-business loans and advance Medicare payments are “a Godsend, and they will help us survive the next few months,” he also said practices like his need to go back to seeing patients in person if they are to remain viable. Medicare will no longer be advancing payments to providers, and many of the small-business funding represents a short-term fix.

While Medicare and some private insurers are covering virtual visits, which would include telephone calls, doctors say the payments do not make up for the lost revenue from tests and procedures that help them stay in business. “Telehealth is not the panacea and does not make up for all the financial losses,” said Dr. Patrice Harris, the president of the American Medical Association.

To keep the practices open, Dr. Mostashari and others propose doctors who treat Medicare and Medicaid patients receive a flat fee per person.

Even more worrisome, doctors’ groups may not be delivering care to those who need it, said Dr. Mehrotra, the Harvard researcher, because the practices are relying on patients to get in touch rather than reaching out.

Some doctors are already voicing concerns about patients who do not have access to a cellphone or computer or may not be adept at working with telemedicine apps. “Not every family has access to the technology to connect with us the right way,” said Dr. Kressly, who said the transition to virtual care “is making disparities worse.”

Some patients may also still prefer traditional office visits. While the Rutledges appreciated the need for virtual visits, Kelli said there was less time to “talk about other things.”

“Telehealth is more inclined to be about strictly what you are there for,” she said.

Private equity firms and large hospital systems are already eying many of these practices in hopes of buying them, said Paul D. Vanchiere, a consultant who advises pediatric practices.

“The vultures are circling here,” he said. “They know these practices are going to have financial hardship.”

 

 

 

 

Bankrupt hospitals sue feds

Posted on by • Posted in 2020 Election Issues, Bankruptcy, Cash, Cash Reserves, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economy, Financially Distressed, Health Policy, Health System, Hospital, Hospital Industry, Lawsuit, Liquidity, Pandemic, Paycheck Protection Program, Rural Health, Rural Hospital • Leave a comment

https://www.axios.com/newsletters/axios-vitals-e6483366-26b3-4f34-99c1-f2b356e47b4a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Stifel CEO: Hospitals Will Go Bankrupt in Overlooked Threat

Small hospitals going through bankruptcy are suing the Small Business Administration, arguing it is unlawful for the federal government to deny them loans under the Paycheck Protection Program, Axios’ Bob Herman reports.

Why it matters: Allowing bankrupt hospitals access to PPP loans could keep their doors open, and could force the federal government to reverse its stance and allow other bankrupt firms to get PPP loans.

Driving the news: Faith Community Health System, a small rural hospital in Texas that filed for bankruptcy in February, sued the SBA Thursday.

  • The hospital wants to apply for a $2.4 million PPP loan to pay staff and remain open while it goes through bankruptcy and handles the coronavirus pandemic.
  • However, the SBA says bankrupt companies will not be approved for the bailout money because of their “high risk.”
  • Faith Community argues the government agency doesn’t have the authority to exclude bankrupt firms from PPP funding because the law doesn’t spell out those eligibility requirements.

The big picture: Courts are starting to take hospitals’ side.

  • A bankruptcy judge in Maine said the funding was a “grant of aid necessitated by a public health crisis,” and that two hospitals that sued the federal government are entitled to PPP loans.
  • A separate bankrupt hospital in Vermont also should be eligible for PPP funds, a judge ruled this week.

The bottom line: Rural hospitals have been in dire straits for years, and for those that are on the precipice of or are going through bankruptcy, they may be eligible for this bailout funding despite SBA exclusions.

 

 

 

 

US hospitals losing $1.4B in revenue per day

Posted on by • Posted in Coronavirus, Crisis, Crisis Management, Elective Procedures, Elective Surgery, Financial Reporting, Financially Distressed, Health System, Hospital, Hospital Industry, Net Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Outpatient Care, Outpatient Surgery • Leave a comment

https://www.beckershospitalreview.com/finance/us-hospitals-losing-1-4b-in-revenue-per-day.html?utm_medium=email

Facing a financial squeeze, hospitals nationwide are cutting jobs

Hospitals across the U.S. are losing more than $1 billion in daily revenue as they experience significant declines in patient volume during the COVID-19 pandemic, according to a report from Crowe, a public accounting, consulting and technology company. 

With the exception of those in San Francisco and New York City, health systems across the country saw patient volume decline an average of 56 percent between March 1 and April 15. As a result, net revenue at hospitals with more than 100 beds dropped roughly $1.44 billion per day, according to the report.

The report, released May 1, said inpatient admissions are down more than 30 percent, emergency room visits dropped 40 percent and outpatient surgery volume plummeted 71 percent, compared to January.

“Hospitals and governments prepared for a surge in patient volume to treat those infected with the novel coronavirus,” Brian Sanderson, managing principal of healthcare services at Crowe, said. “However, any possible surges that might have been expected due to COVID-19 patient volume appear to be dramatically offset by a significant decline in volume in all other areas.”

 

 

COVID-19 cases are rising in rural America, and its hospitals may be unprepared

Posted on by • Posted in Coronavirus, Crisis, Crisis Management, Financially Distressed, Hospital, Medicaid, Medicaid Childrens Health Insurance Program (CHIP), Mortality, Pandemic, Public Health, Public Safety, Rural Health, Rural Hospital, Social Distancing • Leave a comment

https://www.healthcaredive.com/news/covid-19-cases-are-rising-in-rural-america-and-its-hospitals-may-be-unprep/577161/

CMS announces Rural Health Strategy | SDAHO

Dive Brief:

  • Though metro and rural areas have had different infection rates since the outbreak began, the mortality rate from the virus is mostly the same in the U.S. But in recent weeks, the infection rate in rural counties has been outpacing urban counties, according to a new analysis of COVID-19 data by the Kaiser Family Foundation.
  • According to KFF, counties with large metro areas have had nearly three times as many coronavirus cases and deaths as rural counties (327.5 cases per 100,000 versus 114.9 per 100,000, even adjusting for population size). Metro counties have also experienced nearly four times as many deaths as of last Monday (17 per 100,000 versus 4.4 per 100,000).
  • Nevertheless, the COVID-19 mortality rate is 4.2% for metro populations, versus 3.8% for rural populations. And the county with the most deaths per capita is in a non-metro area. 

Dive Insight:

The divide between rural and urban America was highlighted during the first several weeks of the COVID-19 pandemic in the U.S., as major metropolitan areas were hit much harder than their rural counterparts, suggesting lower population density could spare rural America the brunt of the outbreak.

However, this week’s KFF analysis suggests COVID-19 is now spreading in rural America, whose older population and smaller, often sparsely equipped hospitals may be ill-prepared to bear up against the coronavirus. That rural hospitals have been in dire financial straits for years suggests that they may not be able to marshal the resources to properly respond if they become inundated with coronavirus patients.

A recent letter from the Medicaid and CHIP Payment and Access Commission to Health and Human Services Secretary Alex Azar also suggests that hospitals with a high proportion of Medicaid and low-income patients are not getting enough emergency federal funding in response to COVID-19, a trend that could also hurt some rural hospitals.

According to the KFF analysis, there was a 45% uptick in COVID-19 cases in non-metro counties over the past week, versus 26% in metro counties. Over two weeks, cases increased 125% in non-metro counties versus 68% among their urban counterparts. And deaths are up 169% over the past two weeks in non-metro counties, versus a 113% increase in metro counties.

Meanwhile, the easing of lockdowns in states with large rural areas foretells more problems in the near-term. “Georgia has started to reopen certain businesses and allow limited dine-in at restaurants, despite some of its counties rising toward the top of this list of U.S. metro and non-metro counties with the highest numbers of COVID-19 deaths per capita,” the KFF analysis observed.

The county with the most deaths per capita in the U.S. is Randolph County, with 278 deaths per 100,000 people. Randolph is a rural county in Georgia.

 

 

 

Pennsylvania hospital to cease inpatient care

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https://www.beckershospitalreview.com/patient-flow/pennsylvania-hospital-to-cease-inpatient-care.html?utm_medium=email

Front Page: April 25, 2020

Crozer-Keystone Health System is shutting down inpatient care and non-emergency services at its hospital in Springfield, Pa., until June, according to the Delaware County Daily Times. 

Springfield Hospital is temporarily shutting down services after seeing a significant decline in patient volume due to the COVID-19 pandemic and suspending elective surgeries.

Crozer-Keystone, a four-hospital system, is trying to find alternative assignments for staff affected by the changes, a spokesperson told the Delaware County Daily Times. If there’s a surge in COVID-19 patients, some employees may be called back to the 25-bed hospital to assist.

Springfield Hospital is experiencing many of the same issues as other hospitals in the state. A recent analysis by Health Management Associates revealed that even with an expected $3.1 billion in federal aid provided under the Coronavirus Aid, Relief and Economic Security Act, Pennsylvania hospitals could still lose about $7 billion this year, according to the report. 

 

 

Cartoon – Times are Tough

Posted on by • Posted in Cartoon, Consultant, Consulting, Crisis, Crisis Management, Economic Crisis, Financially Distressed, Health System, Hospital, Hospital Industry, Net Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Restructure, Times, Tough • Leave a comment

Times Are Tough - Small Business Trends

Envision Healthcare considering bankruptcy filing

Posted on by • Posted in Bankruptcy, Cash, Cash Reserves, Cash-Flow Improvements, Coronavirus, Credit Quality, Credit Ratings, Creditors, Crisis, Crisis Management, Emergency Care, Emergency Room Staffing, Financial Pressure, Financially Distressed, Pandemic, Physician, Physician Practice Management, Physician Staffing, Private Equity, Restructure, Turnaround, Turnaround Plan, Venture Capital • Leave a comment

https://mailchi.mp/0d4b1a52108c/the-weekly-gist-april-24-2020?e=d1e747d2d8

KKR-backed Envision Healthcare hires restructuring advisers ...

 

National physician staffing firm Envision Healthcare is considering filing for bankruptcy, according a report from Bloomberg. Sources say the company, backed by private equity (PE) firm KKR, which acquired Envision for $9.9B in June 2018, has hired restructuring advisors and is working with an investment bank. The abrupt halt to elective surgeries and reduction in emergency room volumes due to COVID-19 has caused Envision’s business to shrink by 65 to 75 percent in just two weeks at its 168 open ambulatory surgery centers (ASCs), compared to the same time period last year.

The Nashville-based company, which employs over 25,000 physicians and advanced practitioners, has already been reducing pay for providers and executives, in addition to implementing temporary furloughs. Envision is also struggling with a debt load of more than $7B, resulting from its 2018 leveraged buyout, and has been unable to convince its bondholders to approve a debt swap.

It remains to be seen whether Envision will be a bellwether for how other PE-backed physician groups will weather the ongoing COVID crisis. While Envision’s composition of mainly hospital- and ASC-based providers, coupled with its huge debt load, leave it on especially shaky financial footing, many PE-backed physician groups will struggle this year to achieve anything close to the 20 percent annual rate of return often promised to investors.

If high-profile PE-backed groups like Envision end up declaring bankruptcy, it will likely impact the calculus of the many independent practices which may have previously looked to PE firms for acquisition, and temper the enthusiasm of investors, who might see physician staffing and practice roll-ups as less attractive as volumes continue to fluctuate.