Financial ills spread across state’s healthcare providers from COVID-19

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CONCORD, NH — The COVID-19 epidemic has taken a large bite out of the revenues of healthcare organizations – from large to small hospitals, visiting nurse associations, regional providers and nursing homes, an advisory committee was told Tuesday.

The Stakeholders Advisory Committee of the Governor’s Office for Emergency Relief and Recovery heard health-care providers from around the state tell of major financial losses due to the epidemic, some made worse by the state’s low Medicaid reimbursement rates.

While all health-care sectors suffered revenue losses and reduced enrollments, hospital officials said their losses are staggering and are likely to be $700 million or more.

Steve Ahnen, president of the New Hampshire Hospital Association. Courtesy Photo

Steve Ahnen, president of the New Hampshire Hospital Association, said hospitals had an immediate 50 percent reduction in revenues in March when they stopped voluntary procedures.

While allowing hospitals to offer time-sensitive procedures again will help, he said, additional revenues have been slow to materialize after hospitals shut down all voluntary procedures to prepare for COVID-19 patients and prevent its spread.

Ahnen told the committee federal help to date has covered about one-third of the losses.

“Without a major infusion of resources,” Ahnen said, “many hospitals will find themselves out of operating cash within the next two to three months, if not sooner.”

Thomas Mee, CEO of North Country Healthcare, which includes three Coos County hospitals and a hospice/visiting nurse organization, said while his hospitals shut down all voluntary procedures, there have only been two COVID-19 confirmed cases in the county, which means his hospitals have been “ghost towns.”

Coupled with the expense of preparing for coronavirus patients, hospital revenue has been down 50 to 60 percent, he said.

“As a result of all of the aforementioned COVID activities, North Country Healthcare has experienced a greater than 50 percent reduction in (revenue),” Mee said. “In a healthcare landscape in which only a one-to-two percent negative variance can result in an operating loss, losses associated with greater than 50 percent of revenue are simply not sustainable in any healthcare environment in any community.”

Steve Norton of Solution Health, which includes the Elliot Hospital in Manchester and Southern New Hampshire Medical Center in Nashua, said hospitals in the two cities have cared for most of the state’s COVID-19 patients.

For the six-week period between March 16 and the end of April the organization’s losses were $42 million and they estimate they will be $75 million by the end of June.

Activity at the hospitals has picked up some at about 63 percent, he said, but has not returned to levels before the epidemic.

“We are planning to live with COVID and the changed business cycle,” Norton said, “through the end of the year.”

Nursing Homes

Tom Blonski, president of New Hampshire Catholic Charities, which operates six nursing homes in the state, said the organization’s losses with be $5.5 million within a year, due to fewer patients, and unbudgeted personal protection equipment costs.

The problem is compounded by the low Medicaid reimbursement rates the state pays, which are the lowest in New England and 45th lowest in the country, he said

“The shortfall is close to $50 a day,” Blonski said, noting the organization receives between 65 to 80 percent of its revenue from Medicaid, depending on where the facility is located.

He said the number of patients is down 11 percent below what was anticipated with fewer hospitals referring patients.

“I’m very concerned about the future stabilization. We really serve the most vulnerable population in the state,” Blonski said. “I’m concerned what the future holds for us, if we can afford this new normal what that looks like in the future.”

He said other states have provided significant aid to their nursing homes like Massachusetts and Alabama.

“We need a large (public relations) campaign to get people to trust nursing homes again,” Blonski said. “They think if you go (to a nursing home) now, you are going to die or catch an awful virus.”

Northern Human Services

The largest area agency covering about 40 percent of the state, said it needs help because it could not qualify for the payroll protection program financial help the other nine areas agencies received. The agency has too many employees to qualify.

Eric Johnson, the CEO of Northern Human Services, which provides services to the developmentally disabled and acquired brain injured, is the designated mental health center for the North Country and also offers substance abuse treatment programs, said the organization needs about $3.75 million. That is what it would have received under the PPP to build services back to their level before the epidemic and rehire 200 staff.

“Over the years we have risen up to face many challenges and succeeded,” Johnson told the committee. “This is a rare time and we feel the need to reach out.”

He said his organization has been serving the North Country for over 45 years offering a wide array of services.

“As our cash reserves diminish, the need to maintain our capacity to pay bills that support our very large infrastructure,” Johnson told the committee, “and the need to meet payroll will become challenging as the COVID crisis continues.”

Visiting Nurses

Beth Slepian, CEO of the Concord Regional Visiting Nurse Association, said COVID-19 has “impacted our entire operation — staff, patients and the communities we serve — and we have had to alter how we deliver care.”
Her organization has experienced a 20 percent reduction in service volume as some fear exposure and do not want their staff in their homes, and fewer referrals by physicians and hospitals.

Slepian said her organization has increased its use of telehealth, but Medicare does not reimburse for the service and Medicare recipients are 75 to 80 of the population they serve.

Slepian also noted the state’s low Medicaid reimbursement rates, saying they “limit our ability to pay competitive wages and workforce stability.”

She said she has been humbled by the community support shown her organization during this time.

“We are a critical link in the health care system,” Slepian said.

“We serve the most vulnerable in the place they want to be, which is in their home.”

Priorities

The committee also began establishing its priorities to recommend to the governor.

The committee members are expected to continue working on the priorities for funding and distribution timing for the $1.25 billion in federal CARES Act money.

The committee has targeted agencies and organizations as the most appropriate and efficient avenue to deliver help to the healthcare organizations, businesses, nonprofits and agencies needing aid because of the coronavirus pandemic.

The committee meets again Thursday at 2 p.m. when it will hear a presentation on the virus’s effect on the state’s agricultural industry.


Garry Rayno may be reached at garry.rayno@yahoo.com.