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Health care providers also feel economic pain of coronavirus

Bob Atlas, President and CEO of the Maryland Hospital Association. (The Daily Record / Jason Whong)

Bob Atlas, President and CEO of the Maryland Hospital Association. (The Daily Record / Jason Whong)

Even as they prepare to treat a surge of COVID-19 patients in emergency rooms and field hospitals, hospitals and private medical practices say they are not immune from the economic factors that have put much of the country into a recession.

The very tools that public health experts have recommended to combat the global pandemic have also been a drag on the bottom line: social distancing and the cancellation of elective procedures.

“Consequently, hospitals are losing revenue,” Bob Atlas, president and CEO of the Maryland Hospital Association said in a statement. “At the same time they’re spending much more than usual to get ready to care for COVID-19 patients. The availability of financial relief from federal stimulus packages is uncertain — in timing, amounts and allocation.”

Last month, as hospitals sought ways to free up space and staff and preserve equipment, they postponed elective procedures. That meant that doctors, nurses and beds typically assigned to procedures like hip and knee replacements were available to help treat an expected surge in COVID-19 patients.

But that also means that the revenue hospitals expected to generate from those procedures, revenue needed to pay the doctors and the nurses and other hospital staff, has disappeared.

The average cost of a hip replacement in Maryland is $30,067 according to the Maryland Health Care Commission. The average cost of a knee replacement is $29,059.

Hospitals have spent money preparing for that surge of patients. They are adding beds and hiring additional staff. The University of Maryland Capital Region Health’s expansion of Laurel Medical Center to add 135 beds means that the system is also hiring 400 new staff.

Health systems hope that the federal government will step in to help relieve some of the financial pressure. The stimulus bill already passed included billions in aid, though many say that will not be enough.

Medicare has created an accelerated payment program that Atlas described as a cash advance against future payments. 

But layoffs may have to come to Maryland hospitals as they have in other hospitals across the country where the bottom line is plummeting.

“Under these circumstances, hospitals are doing their utmost to redeploy staff to meet the demands of the crisis and to minimize the impact for those team members who can’t be reassigned,” Atlas said. “These are difficult decisions hospitals — and other businesses — face as the COVID-19 crisis continues.”

Health systems are not the only medical providers feeling economic uncertainty. Private practices have also been affected by the cancellation of elective procedures. They also have been affected by social distancing guidelines that keep patients at home instead of coming into the office.

Surgery practices, like plastic surgery, have seen their normal ambulatory surgery centers shut down and are essentially out of business at the moment. General practices can keep busy with telemedicine, especially as state and federal guidelines are changed to allow more reimbursement for telehealth.

But even then, they are seeing fewer patients than they were before and must consider other factors, like continuing to pay office staff.

“A lot of these docs that are in private practice are in real financial trouble,” said Gene Ransom, executive director of MedChi, Maryland’s medical society. “I’m really worried about the future of private medicine after this. I think that class of doctors are going to be really crushed by this.”

Ransom estimated that while half of doctors are busy with the response to the pandemic, the other half could be on the verge of bankruptcy.

These practices can and are applying for relief from the federal government. They could also be eligible for payment by helping with the COVID-19 response.

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