Why hospitals are losing money during a pandemic

Fears of swamped hospitals overrun with COVID-19 patients are not playing out across the suburbs or in many places across the nation, hospital officials and industry reports say.

Numbers of COVID-19 patients are fewer than expected at the two hospitals in the Edward-Elmhurst Health system and at Northwest Community Hospital in Arlington Heights.

“The good news is that ... we are poised to be in a position to more-than-adequately take care of our community during this COVID-19 crisis,” Northwest Community Hospital CEO Stephen Scogna said in a video message to employees.

The bad news is revenue is down 50% over the past two months, so the hospital on Thursday announced it is imposing pay cuts starting at 6% for employees and rising to 14% for executive vice presidents and 20% for the CEO. The cuts are slated to last through September, but, for now, no layoffs are planned.

“The implications to NCH's revenue streams are going to require us all to make some sacrifices,” Scogna said.

At the same time, Northwest Community is giving modest pay increases to the 15% of its workforce that has had direct contact with COVID-19 patients.

The Arlington Heights hospital is not alone in experiencing declining revenue amid a pandemic that has doctors worried many people are avoiding hospital care they need because of fears about the new coronavirus.

Overall patient volumes are lower than usual among 707 hospitals in 45 states examined in a report released Friday by consulting firm Crowe LLP. The report found outpatient surgical volumes down 71%, other outpatient services down 62%, emergency department visits down 40%, and inpatient populations down 30%. It estimated the average 350-bed hospital in Illinois lost $23.6 million in revenue from the start of the pandemic to April 25.

Northwest Community Hospital, which has 509 beds, has seen a broad impact to elective procedures and outpatient visits as a result of Gov. J.B. Pritzker's first stay-at-home order. Many appointments have been postponed and some have been transformed into telehealth visits, according to hospital spokeswoman Amy Jo Steinbruecker.

Hospitals emptied many beds by following the governor's order and postponing elective surgeries last month, preparing for what Edward-Elmhurst Health CEO Mary Lou Mastro described as a “significant surge in COVID patients.”

The surge, however, is “leveling out,” Mastro said, and the hospital system as a whole has “the capacity to do more.”

Edward and Elmhurst hospitals on Friday were treating 111 patients with confirmed cases of COVID-19 and 21 patients whose tests for the virus were pending. The system has treated 424 others with the virus — 361 who were discharged and 63 who died.

But a decrease in overall patient volume because of the pandemic has the nearly 600 beds across the two hospitals running at an average of 70% occupancy, Mastro said.

“The misnomer that people have is that the hospital is only COVID-19 patients,” she said. “Of the patients we have in the hospital, 24% are COVID-positive patients.”

Edward-Elmhurst also is experiencing revenue decreases but has not announced pay cuts.

Mastro said the system is continuing to pay roughly 500 employees who have not been working the past seven weeks because their typical jobs have shut down amid the pandemic. She said the system has created a labor pool of at least 400 employees who have been reassigned to help with tasks related to pandemic response and has retrained at least 100 nurses to help out in COVID-19 units.

Caring for those patients is “stressful” but well within hospital capabilities, Mastro said. The hospital is used to safely containing infections and has put in place new protocols and increased use of personal protective equipment to hinder the spread.

That's why the hospital is working to remind patients it is safe to visit an emergency department if a medical need arises.

Dr. Peter Schubel, an emergency medicine physician at Edward Hospital, said he has seen patients who have waited longer than they should to come in for ailments including chest pain or symptoms of a stroke. Doctors can do more to help if patients arrive as soon as these symptoms begin.

“They think they're not supposed to and think they're doing us a favor” by staying away from the emergency department, Schubel said.

But that's not the case.

“We want to get back to what we do,” he said, “which is take care of all kinds of illness.”