The state’s Center for Health Information and Analysis (CHIA) last week released
the latest report on hospital finances for the first quarter of the calendar year (Jan. through March 31), and the document paints an extraordinarily bleak picture that will almost certainly become darker when reporting for the second quarter is tabulated.
Hospitals were only two weeks into dealing with the pandemic in the period covered by the report, yet CHIA’s data shows that overall acute hospital profitability, as measured by the median total margin was – (negative) 2.7%, a decrease of 6.9 percentage points in comparison to the same period of the prior year. The median operating margin was negative 1.3%. Seventeen of 21 reporting systems had negative total margins; 43 out of 45 hospital/health system-affiliated physician organizations reported a net loss for the period ending March 31, 2020.
The COVID-19 surge hit Massachusetts hard in April and May with a massive amount of non-COVID-19 care evaporating at hospitals, and with it a loss of revenue. Hospitals also spent greatly on expanding capacity to meet the surge and to purchase PPE at inflated costs.
“The latest CHIA report shows the early, yet swift impact the COVID-19 emergency had on hospital finances,” said MHA President & CEO Steve Walsh. “The analysis covers the first two weeks of canceled elective procedures at Massachusetts hospitals, which was only the beginning of a financial free-fall that has grown increasingly dire in the months since. Even as care services are restored, severe revenue challenges persist. These early findings underscore the need for substantial and ongoing financial support so our hospitals can weather this storm and continue to treat every patient in need of care.”