How COVID Is Impacting The Financial Health Of Greater Cincinnati Hospitals
Greater Cincinnati hospitals have lost millions during the pandemic and through a series of steps are trying to get back in the black.
St. Elizabeth Healthcare
Between mid-March and June, St. Elizabeth Healthcare says it was losing $10-$13 million a week. That's in addition to the high costs of treating COVID patients and personal protective equipment (PPE) that were costing 10-12 times what they normally do.
CFO Lori Richey-Baldwin says St. Elizabeth, which includes five hospitals, was able to weather the storm because managers had been good financial stewards pre-COVID, finding ways to reduce costs through automation and other technology.
"And I can't leave out the fact that both the state and federal government very quickly got into our hands CARES Act funds as well as the medicare advance loans." Richey-Baldwin says St. Elizabeth received $70 million in CARES funding and $100 million from Medicare. She says the hospital group has a year to pay back the Medicare advance loans.
Further helping the hospital's finances is that elective surgeries were allowed to resume sooner in Kentucky and the state didn't have the number of COVID cases that Ohio did.
St. E didn't have to layoff or furlough any employees, instead choosing to reassign workers like physical therapists or trainers to central supply.
After losing $100 million, TriHealth says it is implementing a number of cost-saving measures including laying off nearly 300 people. It will close more than 20 physician offices and those employees will move to larger medical centers. TriHealth anticipates telehealth visits will increase and it won't need as much real estate. During the pandemic it saw 100,000 patients virtually.
It may also reduce office space at its Walnut Hills headquarters and its Norwood campus. Also on the chopping block is the reducion of sports teams sponsorships and donations to nonprofit civic organizations. That would save millions.
The Christ Hospital Network
Experts say a good way to gauge financial health is to look at the number of days of cash on hand. As of March 31, Christ Hospital had 155 days. It had 169 as of June 30, 2019. In its quarterly report ending March 31, 2020, the hospital says, "the Network has taken steps to enhance its liquidity and to reduce the impact of the March 17 Order on its financial performance."
It has entered into a loan agreement with Fifth Third Bank, under which the bank has extended a revolving line of credit of $50 million dollars. It is also working with vendors to reduce cash outflows. Christ also furloughed workers and reduced benefits.
The hospital group has received nearly $20 million in CARES Act funding and $92 million in Medicare accelerated and advance payments.
All hospital groups, including UC Health, are deferring major capital expenses and non COVID-related projects.
"We also implemented pay reductions for senior leaders and asked departments to reduce overall labor expenses by at least 20 percent, including the use of paid and unpaid time off," says spokeswoman Amanda Nageleisen.
She says the bond and credit ratings remain strong and "have helped provide a measure of stability. The challenges that have emerged from the COVID-19 pandemic are unlike anything we have encountered in our lifetimes. The health care sector has been one of the hardest hit industries; the financial impact to health systems across Ohio is in excess of $3 billion. Like many others, UC health has faced significant financial challenges as a result."
Mercy Health and its parent company Bon Secours report it has furloughed 3,400 employees through June 30 and redeployed 14,000. This takes in 50 hospitals in seven states and Ireland. Layoffs have totaled 400. Spokeswoman Nanette Bentley says that's less than 0.5% of its workforce.
Bentley says furloughed employees have returned to work to meet the needs of patients. During the suspension of elective procedures and non-COVID-related services she says, "Our foundation provided a $60 million Associate Hardwhip Fund that assisted associates throughout the pandemic, helping with child and elder care expenses and providing restorative pay to furloughed associates and those on reduced hours."
Cincinnati Children's Hospital Medical Center avoided layoffs and furloughs according to spokesperson Libby Coulton. "Employees who are temporarily without work have been reassigned to other needs," she says. "Those who could not be reassigned, received eight weeks of full pay and are now being paid at 80% plus full benefits."
Coulton says the hospital is bringing those employees back to full-time status as it's able. "Our strong balance sheet, continuous focus on efficiency and expense management as well as funding received through the CARES Act have helped us weather the financial impact of COVID-19 pandemic so far and enabled us to continue to provide the care our patients need."
She stresses Cincinnati Children's "must maintain a degree of readiness and flexibility and this prolonged state of readiness and financial uncertainty will continue to place pressure on our system."