For Daviess Community Hospital and a lot of rural hospitals in Indiana, the changes and problems created with fighting and preparing for the coronavirus has led to an economic whammy that may well be difficult to recover from.
Hospitals have been hit with a combination of increased costs while at the same time, less income because they were following state directives to slow down money-making procedures and free up hospital space.
“Daviess Community Hospital is trying to cope with the financial hardships of increasing costs and decreasing revenues associated with postponed/canceled visits and procedures due to the COVID-19 pandemic,” said Daviess Community Hospital Chief Financial Officer Randy Russell. “Not only is DCH dealing with the lost revenue associated with the decline in volumes, DCH is also experiencing an increase of many of the hospital’s operating expenses as we prepare to deal with this pandemic. Our supply costs continue to increase as we look to purchase, while at many times at inflated rates, the difficult to find but necessary PPE to protect our staff.
“In addition, we are spending unplanned capital dollars to equip our facility with the necessary ventilators and monitors while at the same time converting rooms to negative air-flow to handle those infected. Our staffing costs have not decreased even in the light of declining volumes. DCH is working to reassign staff in different capacities like call centers and screening sites and are working to cross-train staff so we are prepared to handle the surge of patients that ultimately might come to the hospital.”
For many rural hospitals in Indiana this virus might not only kill some patients, it may provide the death knell for their operations.
“Some of them were not very strong to begin with,” said Don Kelso, executive director for the Indiana Rural Health Association. “Even without the coronavirus there were four or five hospitals that might not have been able to continue in the same fashion. With the increased costs to get ready for the surge and their lost revenue they are facing a perfect storm for financial ruin.”
Most rural hospitals rely heavily on outpatient and elective procedures to pay the bills. With those cut off and the push to ramp up facilities for coronavirus patients, the position may put some hospitals in a spot in which they may need help to recover from.
DCH specifically may not be sitting fat, but officials say the finances are considerably stronger than in the past.
“It’s much, much better than it was five years ago,” said Daviess County Commissioner Nathan Gabhart who sits on the DCH Board of Governors. “There’s no question this has hit the service lines of health care providers in general. We are not going to know the exact impact until it is all behind us. Fortunately, we have some cash on hand. We have some money put back to cover our debt payment.”
For now, though, the financial well-being of the hospital is taking a back seat to more pressing matters.
“For the board of governors, our financial condition is not at the forefront of our concerns right now,” said Gabhart. “Saving lives is at the forefront — people first, money second.”
That is not to say that a day of reckoning will be coming and the books will have to be balanced. Just right now the focus has to be on the health and safety of the community.
“We have to control those things we can control,” said Gabhart. “I am certain when the dust settles the numbers will not be pretty, but we’ll still be standing and that’s when the tough decisions will have to be made.”
There is a possibility though that hospitals might not wind up having to eat all of the losses because of the fight with the coronavirus.
“We have had some talks with state and federal officials about ways that these rural hospitals can survive,” said Kelso. “There is some relief aimed at hospitals in one of the stimulus bills the Congress passed earlier this year.”
“I believe there will be some sort of government assistance too, because the hospitals will need a helping hand getting out of this financial mess,” said Gabhart.
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