U.S. hospitals halt lucrative procedures amid coronavirus crisis, job cuts follow

An empty operating room is seen in a Maryland hospital as hospitals have limited visitors and cancelled elective surgery to make space for coronavirus disease (COVID-19) cases, March 18, 2020. Picture taken March 18, 2020. REUTERS/Rosem Morton

SAN FRANCISCO/NEW YORK (Reuters) – U.S. hospitals and physician groups are beginning to feel severe financial strain as they shift operations from profitable procedures to focus on the rapidly spreading coronavirus pandemic.

The hospital industry nationwide is under growing pressure to halt lucrative elective surgeries, relocate patients not infected with coronavirus from frontline facilities, and greatly expand capacity for expensive intensive care to address the healthcare crisis.

In roughly a dozen states, including hard-hit New York, New Jersey and Washington, government officials have ordered these changes. Nationally, the Centers for Disease Control and prevention recommended facilities reschedule elective surgeries as necessary.

Hospitals administrators say high-margin services, such as orthopedic and heart procedures, can account for up to 80% of revenue, while infectious disease and intensive respiratory treatments are less profitable.

“The red ink is going to be pretty deep,” Kevin Ward, chief financial officer of New York-Presbyterian’s Queens hospital in New York City, told analysts.

The hospital, like many in the epicenter of the U.S. outbreak, has been inundated with patients with COVID-19, the highly contagious, sometimes deadly respiratory illness caused by the virus.

Unlike with typical elective or urgent surgeries, COVID-19 patients “are not high-paying cases, and they require a lot of care, isolations and (personal protective equipment),” Ward said.

Healthcare networks in Atlanta, Kentucky and Maine have begun furloughing hundreds of employees, as offices and surgical centers shutter and hospital wings convert into coronavirus wards.

The $2 trillion coronavirus stimulus package approved by Congress includes a $100 billion relief fund to reimburse medical providers. The fund should cover hospital losses for about two months if revenue declines 50%, a JPMorgan analysis found. That excludes costs for more bed capacity and extra supplies to fight the outbreak.

Some hospital networks have continued performing non-emergency surgeries before the anticipated surge of COVID-19 patients arrives.

“At the moment, we’re making individual decisions,” said UC Davis Health Chief of Surgery Diana Farmer, whose Sacramento hospital late last week had just nine COVID-19 cases. It was still treating hernias, cataracts and performing orthopedic surgeries if it was determined the procedure should not wait to reduce pain or avoid potential complications later.

“There are patients begging to get their cases done early. They are afraid that they might have to wait for six months,” Farmer said.

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