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KUNC is here to keep you up-to-date on the news about COVID-19, the disease caused by the novel coronavirus, and answer your questions about Colorado's response to its spread in our state.

COVID-19 Tests Hospitals' Financial Fragility – And New Ways Of Delivering Health Care

The William Bee Ririe Critical Access Hospital and Rural Health Clinic in Ely, Nev.
The William Bee Ririe Critical Access Hospital and Rural Health Clinic in Ely, Nev.

The United States is seeing its highest unemployment levels since the Great Depression. And nurses, doctors and other health care workers are not immune to pay cuts and furloughs.

Jody Domineck is a registered nurse at Sunrise Hospital in Las Vegas, Nevada. Lately, she's been outspoken about working conditions in hospitals.

"We come in, we fight the anxiety, and the fear. We know the risks, we've seen them firsthand – what happens when you get sick with this horrible virus. And, we show up," said Domineck.

Still, she watches as colleagues are forced to work less, and not by choice.

"There have been reduced hours and with the cut of the elective surgeries, there are a lot of people not working who would normally be working," Domineck explained.

It might seem strange at first that medical staff, front-line workers during this pandemic, would be vulnerable to job cuts or furloughs. But as Michelle Hood says, "Hospital finances are very complex."

Hood has been a hospital administrator for 40 years, and she's now the executive vice president of the American Hospital Association. 

"Typically, our hospitals in this country run on very thin margins," said Hood.

Financial gains from elective procedures, like hip replacements, offset the losses from things like emergency room visits, Hood explains. But during the pandemic, those hip replacements aren't happening. 

"And as a result, their revenue has dropped significantly," said Hood.

Her organization estimates that between March and June, American hospitals and health systems will lose more than $202 billion. To compensate, Hood said hospitals are now looking to cut expenses. And the biggest line item? People.

"In very efficient hospitals, they're approximately 50% of the total expenses. In some specialty hospitals, like psychiatry and so forth, they can be 75 to 80% of the total expenses," Hood explained.

Hence, furloughs and reduced hours for medical staff. 

Matthew Walker said rural hospitals are particularly fragile from a financial standpoint.

He runs the William Bee Ririe Critical Access Hospital and Rural Health Clinic in Ely, Nevada. He said COVID-19 hasn't hit their community hard – yet – but they're prepared.

"From a health standpoint, everything is really quite good," said Walker.

He can't say the same about the hospital's finances. Even with federal stimulus money, Walker said  his system could lose about $1 million this year. But furloughs aren't an option.

"We actually have to figure out what to do with our docs, because if we just tell them, 'Hey, we don't have work for you,' there's a possibility that they say, 'Well, then I'm just not going to come back to Ely,' and that would hurt us from a long-term standpoint," Walker explained.

Walker said there isn't another hospital within 200 miles, and that on average, it takes more than a year to recruit a new physician. The facility is also short on nurses.

"If we end up getting more cases here and then all of a sudden some of our nurses leave, or even if our nurses get sick, it's not like we can just pull someone in," said Walker.

Still, at least one hospital bond analyst is optimistic.

"When the dust settles, we're going to look and ultimately have a stronger health care system in the U.S.," said Fitch Ratings' Kevin Holloran, who heads up the firm's hospital and health care group.

Holloran believes the pandemic has essentially put all Americans on a pilot program that's testing new ways to deliver health care, and the emerging innovation will offer a path forward. Take the increased adoption of telemedicine right now.

"You can measure breath capacity for people that might have asthma [by hooking] up to your smartphone and these wearable devices. All of these things are going to expand. Don't go back to making people drive downtown to the big hospital to get those tests done," said Holloran.

While structural changes to the health care system don't come easily, Holloran expects the pandemic to change the way people think about health care delivery. That means more conversations around a single-payer system, or more mergers and acquisitions in the sector, or maybe even expanding Medicare and Medicaid.

"I'm one of those people that think this pandemic, this COVID crisis, will open up a lot of people's eyes to say, 'Not only did I not really appreciate how valuable it was to have a good, strong, well-performing hospital down the street, I realize that I' – I meaning society – 'need to figure out a way to make sure it stays that way, if I don't enhance it,' " said Holloran.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.

Do you have questions about COVID-19? How has this crisis affected you? Our reporters would love to hear from you. You can submit your question or share your story here.

Copyright 2020 KUNR Public Radio. To see more, visit KUNR Public Radio.

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