HAP News Releases and Statements

News Release: New Report: COVID-19’s Toll on PA Hospitals Could Exceed $10 Billion

HMA analysis predicts widespread financial strain, spikes in uninsured and Medicaid

April 20, 2020

A new report released today outlined the urgent consequences of COVID-19 on Pennsylvania’s health care system.

The report, commissioned by The Hospital and Healthsystem Association of Pennsylvania (HAP), was conducted by Health Management Associates (HMA), a leading independent national research and consulting firm. It features analysis based on interviews (conducted during April 15 and 16) and data from leaders of 12 Pennsylvania health systems.

“Pennsylvania’s hospital community is diverse and COVID-19’s spread has impacted each differently; but my conversations with hospital leaders across the commonwealth have yielded a common theme: Among hospitals large and small, and in every part of the state, preparing for and responding to COVID-19 has brought tremendous financial strain across the board,” said Andy Carter, HAP president and CEO.

“This report quantifies and projects out this strain with startling clarity.”

Key findings include:

  • Based on a range of factors, additional operating losses from July through December 2020, would be approximately $4.7 billion, for a total estimated loss of more than $10.2 billion for the calendar year
  • Assuming that Pennsylvania hospitals receive $3.13 billion in federal CARES Act funding, the net loss for Pennsylvania hospitals—based on projected and estimated losses during 2020, less available federal funding—is likely to exceed $7 billion this calendar year
  • As a result of the cancellation and delay of all non-emergent procedures and precipitous declines in patient volume resulting from forgoing care, March hospital operating margins dropped by an estimated $914 million compared to expectations
  • If patient activity restrictions and volume declines had been in place for the full month, March operating margins would have been down an estimated $2.03 billion statewide
  • Based on hospital modeling relating to the length and scale of the remaining pandemic period, the report concludes that operating shortfalls statewide will range from $4.4–$4.86 billion for the April-through-June quarter. These findings are consistent with HAP’s preliminary estimates of losses of $1.5 billion per month

Hospital net patient revenues for fiscal year 2019 totaled $47.7 billion.

“The COVID-19 crisis is unfolding in real time and this report offers only a preliminary glimpse into the short- and long-term implications of addressing a global pandemic,” Carter continued.

“We must use this analysis to inform our immediate response, as well as our plans to ensure that hospitals remain open and able to treat patients after COVID-19 is contained. This includes continuous state and federal government resources to address current and looming fiscal challenges.”

Importantly, the report found that, as the economy erodes and unemployment rises, millions across the country may lose their health insurance coverage or will become unable to pay their premiums. HMA predicts “a shift from private insurance to Medicaid and uninsured,” further complicating the long-term financial outlook in Pennsylvania. According to a 2019 Dobson|Davanzo report commissioned by HAP, Medicaid only covers 81 cents for every dollar of cost at Pennsylvania hospitals.

Media Contact

Rachel A. Moore
Director, Media Relations
Phone: (717) 561-5342

Additional resources can be found at HAP's Media page.

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