By Lyle Muller | IowaWatch
Some rural Iowa hospitals will not survive the COVID-19 outbreak, industry leaders said Wednesday.
That dire warning came as the Iowa Hospital Association revealed projections that show the state’s 118 hospitals, collectively, could lose as much as $2.17 billion in revenue by the end of this year.
That’s the bleakest picture state hospital industry leaders released on Wednesday. The loss could be as low as $365 million under a best-case scenario, in which non-emergency procedures pick up at a good pace and expenses are curbed, Kirk Norris, the association’s president and CEO, said.
But it won’t help hospitals already operating on a thin or negative margin even before the novel coronavirus changed health care’s business model the past three months.
The projected figures were produced in simulations by nationwide consulting firm CliftonLarsonAllen, which has offices in Des Moines and Cedar Rapids. Consultants ran simulations of how hospital businesses will fare during the COVID-19 pandemic with potential revenue losses, direct revenues and related COVID-19 costs.
The consultants analyzed Institute for Health Metrics and Evaluation data from May 10, an Iowa Hospital Association revenue survey of 89 hospitals from Feb. 3 to April 21, and Medicare and other public data. While the extremes of better- and worst-case were analyzed, the consultants also projected a mid-case situation in which hospitals would be down $1.41 billion in revenue Sept. 30 but recover some of it for a cumulative $1.19 billion loss by the end of 2020.
An IowaWatch review last month of certified financial data for each Iowa hospital showed that 44 of the 118 hospitals ended the last fiscal year for which they reported with a negative balance. Most are in small, rural regions but a few are in urban areas.
Overall, 9 of every 10 Iowa hospitals lost money in March and April, Norris said. Collectively, the state’s hospitals operated cumulatively at 10.9% below breaking even, losing an estimated $12 million a day from mid-March to late April, Norris said.
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