Financial Health of Hospitals 'Dire' Due to COVID-19

American Hospital Association is calling for additional government support to help struggling hospitals


THURSDAY, July 23, 2020 (HealthDay News) -- COVID-19 continues to cause financial peril for U.S. hospitals, according to a report released by the American Hospital Association (AHA).

Kaufman Hall conducted the analysis and considered demand, expenses, the CARES Act impact, and COVID-19 margin impact.

The analysis revealed that without further government support, margins could drop to −7 percent in the second half of 2020 and half of hospitals will be operating in the red. Hospital margins would have been −15 percent in the second quarter had it not been for CARES Act funding. But even with these funds, hospital margins are expected to decline to −3 percent in the second quarter of 2020. Median hospital margins pre-COVID-19 were 3.5 percent. Assuming a slow and steady decrease in COVID-19 cases, median margins could be −1 percent by the fourth quarter of 2020. However, with periodic COVID-19 surges similar to the current case increases, margins could sink to −11 percent.

"This pandemic is the greatest financial threat in history for hospitals and health systems and is a serious obstacle to keeping the doors open for many," Rick Pollack, AHA CEO and president, said in a statement. "While we appreciate the support from the administration and Congress, we need further help to stay afloat to continue our mission of caring for patients and communities."

Press Release

Physician’s Briefing Staff

Physician’s Briefing Staff

Published on July 23, 2020

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