In response to the massive number of COVID-19 patients diagnosed and hospitalized over the past several months, on March 18, 2020, CMS recommended that hospitals across the nation postpone elective procedures in order to maximize available bed space (which can be challenging to predict) and better treat victims of the virus.
While this has been hugely beneficial in the ongoing fight against COVID-19, elective procedures represent a large portion of hospital revenue. Many care facilities might be left feeling the financial consequences of this decision for years to come.
Will the Coronavirus Rescue Package compensate for COVID-19 financial losses?
The Trump administration pulled together a total of $2.2 trillion to aid the individuals, families, businesses, and hospitals most struggling during the pandemic. This federal assistance strategy is known as the Coronavirus Rescue Package. While it may seem as though this $2.2 trillion is a significant enough sum to disburse among all those in need, there are concerns surrounding the formula the government is using to deliver these bailout funds.
The first round of coronavirus aid disbursement was tied to revenue records of each state’s Medicare program. This led to significant disparities in distribution. As an example, New Jersey hospitals received approximately $18,000 per COVID patient treated while Minnesota, Nebraska, and Montana each received over $300,000 per patient. Many care facilities were left with a negligible amount of funding by comparison.
The initial bailout strategy was primarily concerned with aiding hospitals actively treating COVID-19 patients and neglected to remedy financial burdens consequent of the nationwide delay in elective surgeries and procedures.
How much is the elective surgery shutdown costing hospitals?
Conservative estimates suggest that U.S. hospitals are losing over a billion dollars per day without the revenue provided by elective procedures. The American Hospital Association (AHA) estimates that hospitals could even be losing as much as $50 billion per month.
Definitive Healthcare’s VP of Professional Services, Todd Bellemare, sought to answer this question in more depth with a recent webinar, The Short Term Prognosis for Elective Surgeries. To do so, he first isolated some of the most commonly performed elective surgeries by category — digestive, ocular, nervous system, musculoskeletal, and urinary surgeries ranked as the most popular. Choosing urinary system surgeries as an area for exploration, Bellemare analyzed year-over-year claims data and approximated that 329,000 patients have likely gone unserved during this electives halt.
Year-over-year comparison of urinary elective surgery volume
Fig. 1 Data from Definitive Healthcare’s Ambulatory Surgery Center database. Medicare data is from the Centers for Medicare and Medicaid Services (CMS) Ambulatory Surgery Center Limited Data Set (LDS). Data from calendar year 2019 (most recent data available). Accessed May 2020.
By these estimates, it will take an estimated seven months for the country to make up for this delay — and this is just for elective urinary procedures. Collectively, it is safe to assume that it will take years for hospitals to catch up with elective backlogs and recover financial losses on their own.
Bellemare was also able to deduce which U.S. regions were suffering the most from this extreme decline in elective surgeries by analyzing similar year-over-year data sets for the remaining major procedure categories.
Elective surgery decline rates by U.S. region
Fig. 2 Data from Definitive Healthcare’s Ambulatory Surgery Center database. Medicare data is from the Centers for Medicare and Medicaid Services (CMS) Ambulatory Surgery Center Limited Data Set (LDS). Data from calendar year 2019 (most recent data available). Accessed May 2020.
He found that the U.S. regions feeling the elective surgery delay most significantly are the northeastern region with an 81.7 percent decline and the western region with a 79.1 percent decline when compared to elective surgery volumes in prior years. Other U.S. regions have still been hit heavily, but with more closely aligning rates of around 75 percent.
When can hospitals begin performing elective surgeries again?
Effects of the elective surgery delay will be felt long after this pandemic has ceased. As for when hospitals can go back to business-as-usual, however, the answer varies on a state-by-state basis.
Massachusetts and New Jersey are the only states with an elective surgery delay still active, as of this article’s original publish date. Maine, North Dakota, Kansas, and South Carolina are still recommended to uphold the delay. The rest of the states have either reached the expiration point of their delay or did not receive a delay at all.