COVID-19’s Strain On Hospitals May Necessitate More Relief

Law360

As they continue to prepare for influxes of COVID-19 patients in numbers that remain uncertain, US hospitals face unprecedented financial strain. In an article in Law360, Managing Principal Bruce Deal, Principal Mark Gustafson, and Manager Phil Hall-Partyka report that the costs of purchasing vast stores of personal protective equipment (PPE) and converting hospital wards into intensive care units, combined with widespread cancellation of major revenue-generating activities such as elective procedures and routine care, have resulted in significant financial shortfalls.

In their Law360 article “COVID-19’s Strain On Hospitals May Necessitate More Relief,” the authors analyze likely payments for COVID-19 cases from commercial insurers and Medicare, and determine that such payments are lower than payments hospitals receive for other medical procedures. They note that additional resources directed to hospitals as a result of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) are likely to be insufficient to make up the massive shortfall.

The article compares payments made to hospitals for COVID-19 cases with those received per bed before the pandemic; assesses the accuracy of initial projections of the coronavirus’s financial impact on hospitals and insurance companies; addresses the question of whether savings from furloughing non-essential health care workers and closing outpatient facilities can help mitigate financial losses; and considers benefits from government policies promoting telemedicine.

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Authors

Deal B, Gustafson M, Hall-Partyka P