Hospitals estimate $250M financial hit in April - Albuquerque Journal

Hospitals estimate $250M financial hit in April

Copyright © 2020 Albuquerque Journal

SANTA FE – New Mexico hospitals say they face catastrophic financial challenges – a hit of $250 million in April alone – as they care for patients and face business restrictions amid the coronavirus pandemic.

In a report delivered to state officials Friday, they asked for a share of the $1.3 billion in federal aid provided to New Mexico to help address COVID-19, the respiratory illness caused by the virus.

Jeff Dye, president and CEO of the New Mexico Hospital Association, said Friday that hospitals have been squeezed on all sides – increased costs, patients delaying routine care and public health orders restricting elective surgeries.

Gov. Michelle Lujan Grisham’s administration lifted some of the restrictions Friday, allowing medical offices and surgical centers, for example, to gradually resume operations.

Hospitals appreciate the increased flexibility, Dye said, but that it will take some time before medical providers see the financial benefits.

“It’s going to be a slow process of reopening and gearing up again,” Dye said, “The expectation is not to be going full throttle” right away.

In the meantime, hospitals – especially in rural areas – face incredible financial strain, according to the report by the New Mexico Hospital Association. They absorbed a “catastrophic financial impact” of $250 million in April alone, the report said, on top of $81 million from a week in late March.

Rep. Patricia Lundstrom, a Gallup Democrat and chairwoman of the House Appropriations and Finance Committee, said she is willing to consider earmarking some of the federal aid for hospitals. But the federal funding comes with restrictions, she said, and it may not be available for that purpose.

“We don’t want to see our hospitals suffering any more than we have to,” Lundstrom said.

Elective surgery limits

The Hospital Association report – submitted to state and federal officials – outlines the financial status of medical providers amid the public health emergency.

Hospitals, the group said, face increasing costs to treat COVID-19 patients and to secure medical equipment.

At the same time, they have endured a 40% to 60% hit to revenue because of limits on what surgeries they can perform, among other factors. The surgery restrictions were intended to help conserve personal protective equipment needed to combat the coronavirus.

Other financial challenges are also hammering hospitals, the association said. New Mexicans are postponing primary care visits as they shelter in place, and unprecedented job losses have boosted the number of uninsured patients.

As people postpone routine health care, Dye said, it adds to the stress on emergency departments.

“We are starting to see more cases come into the emergency room – and more severe cases come into the emergency room – related to people who delayed care for chronic conditions,” he said.

The federal and state aid sent to hospitals so far is nowhere near enough to relieve the financial strain they face, the association said.

Gradual reopening

A new public health order issued Thursday allows medical offices, hospitals and surgical centers to gradually resume operations under guidelines issued by the state.

It doesn’t outline a specific rule for, say, what kinds of surgeries will be allowed and prohibited. Instead, physicians and patients have some discretion in deciding how to proceed.

For surgeries, the guidelines say patients in severe pain or facing trouble with daily living activities should be a priority. The state also recommends clinics start with surgeries that don’t require an overnight stay.

Outpatient surgery usually covers procedures such as hernia repairs, gallbladder removals and cataract surgeries.

The guidelines suggest postponing procedures that would require transfusions, medicine that’s in short supply or admission to an intensive care unit.

Furthermore, the state recommends surgical centers operate at less than 50% capacity for the next two weeks, then review whether to ramp up further.

As part of the gradual reopening, medical facilities will have to send daily reports to the state on supplies of personal protective equipment.

Dye said hospitals appreciate the somewhat permissive language allowing for discretion.

Staff cuts, unpaid leave

Hospitals and health systems throughout the state have announced staff cuts and unpaid leave for employees amid the public health emergency. Hundreds of workers had been placed on leave through mid-April.

Just on Friday, Presbyterian Healthcare Services said it was laying off 35 employees.

Lujan Grisham last month had harsh words for hospital and health systems that have cut workers, slashed employee hours and made other reductions. They face financial challenges, she said, but “I’m really disappointed the hospitals in New Mexico behaved this way.”

Earlier this week, she said more funding has been made available to health systems and that she hoped the relaxed restrictions would help.

The goal, Lujan Grisham said, has been to protect health care providers and ensure New Mexicans have a safe place to seek treatment.

“We need folks to keep helping us,” she said in a public briefing Thursday.

Human Services Secretary David Scrase said New Mexico has made progress building up its supply of protective equipment. He said he hoped doctors will continue to see patients over video or by phone but that some in-person visits and procedures are necessary.

“Something that is elective in February,” he said, “can be a big emergency in May.”

Republican legislators in the state House have urged the state to develop an action plan to help hospitals.

“I am concerned that our hospital employees are being overlooked, despite being on the front lines of the crisis,” Rep. Rebecca Dow, R-Truth or Consequences, said in a written statement in April.

Lundstrom – whose Gallup district covers a virus hot spot – said Friday that she hopes the state can help hospitals.

“My understanding is that they’ve all jumped in as much as they can to help get this virus curbed,” she said.

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