By Julie Havlak
Carolina Journal News Service
RALEIGH — Even health care workers aren’t immune to the economic devastation brought by the coronavirus.
Health care providers lost billions during the shutdown that delayed or canceled elective surgeries across North Carolina. The fallout could drive up prices for patients, fuel consolidation, and worsen shortages in rural health care, said Jordan Roberts, John Locke Foundation health care policy analyst.
Multiple hospitals have furloughed and laid off workers and cut salaries or benefits. Hospitals lost an estimated $1.2 billion to $1.68 billion per month from mid-March through April, based on estimates by the N.C. Healthcare Association.
Cape Fear Valley Health plans to furlough about 300 employees, and the hospital system isn’t alone. Rural hospitals lost $150 million in the first month of the pandemic.
With elective surgeries canceled and emergency room visits down, hospitals were operating at half capacity for weeks. But they still had to pay fixed costs, said Dr. Roxie Wells, president of Cape Fear Valley Hoke Hospital.
“Surgery is what keeps your hospital afloat,” Wells said. “In a rural hospital, the profit margins are breaking even — and that’s a good thing in a small, rural community. Going into this, several of our hospitals across the state were actually in the red.”
Wake Forest Baptist Health will cut the hours or pay for almost 20,000 employees. Vidant Health has announced furloughs and cuts to salaries and benefits. Atrium Health has reduced nurses’ hours. UNC Health saw significant reductions in revenue and higher costs during the pandemic.
“The coronavirus has completely strained our economy, as it has health care systems like ours,” said Dr. Julie Freischlag, chief operating officer of Wake Forest Baptist Health in a statement. “As we move forward with these necessary steps, a primary goal is to protect our employees to the greatest extent possible.”
Losing elective surgeries decimated hospitals’ most lucrative revenue stream, Roberts said.
“The hospital financing model relies on elective surgeries to make up for what they lose on Medicare, Medicaid,” Roberts said. “When private insurance goes away, they lose a good bulk of their income.”
Wells worries some jobs will never return if hospitals close. Rural hospitals never saw a surge of patients, but they still must maintain preparations.
“It’s difficult because it’s almost like you’re driving with your foot on the gas and the brake at the same time,” Wells said.
The orders temporarily shuttered many ambulatory surgery centers, cutting surgery volumes to 30% of their pre-virus level and forcing many to furlough staff. They have restarted elective surgeries, but financial pressures will remain if shortages and precautions restrict operations.
Primary care and independent practices are among the hardest hit.
“People are not going to see their primary care providers,” said Dennis Taylor, president of the N.C. Nurses Association. “It has led to them either furlough or lay off staff to keep their practices open and financially viable.”
Patients will eventually pay for independent providers’ financial pain, said Roberts.
“When hospitals start to struggle, they will look for mergers and partners,” Roberts said. “If hospitals or physicians struggle to make it through this, we’re going to see a lot more consolidation. Hospitals will buy up smaller practices or smaller practices, and patients will end up paying more.”
