Pandemic Taking Financial Toll on Indiana Hospitals
July 14, 2020
Pandemic Taking Financial Toll on Indiana Hospitals

​​Indiana hospitals continue to care for all Hoosier patients, including those with COVID-19, but new data show that the pandemic is causing significant financial challenges for hospitals across the state. With the impact of increased costs of supplies and other expenditures, suspension of elective procedures, and many patients' avoidance of care, hospitals are operating at a significant financial loss. Data reported to the Indiana Hospital Association (IHA) show that Indiana hospitals experienced a negative operating margin of -8.3% for the month of April, the most recent period for which data is available. Indiana's critical access hospitals, which serve rural areas, reported an average negative operating margin of -27.7%

Between March and April 2020, as the pandemic took hold, inpatient volume in Indiana fell 26%, according to the IHA's statistics. Emergency care declined 40%, outpatient surgery was down 52%, and outpatient services overall fell 46%. Meanwhile, Indiana hospitals incurred significant costs preparing for and addressing a surge in coronavirus patients, including doubling intensive care capacity and ventilator availability. Hospitals also struggled to acquire personal protective equipment, often paying highly inflated rates. As an example, some hospitals paid up to $7.00 per mask that had previously cost 37 cents each during peak scarcity. More typically, prices were inflated by 10 times their original price, or more.

Though hospitals have benefited from federal support through various stimulus and relief programs, the IHA estimates that all this assistance accounts for only about 4% of hospitals' typical annual net patient revenue. About $62 billion remains in the national emergency relief fund for hospitals, and other providers including physicians, clinics, nursing homes, and dentists. The American Hospital Association has projected that across the country, hospitals and health systems could lose more than $320 billion this year.

“We hope that the federal government will act quickly to distribute the remaining dollars," said Brian Tabor, IHA President. “We also hope that the State of Indiana will consider using some of its federal relief to establish a stabilization fund for rural and urban safety net hospitals, which remain especially vulnerable." 

 Tabor added that while the financial health of hospitals remains a worry, there is great concern about the ongoing impact on the well-being and long-term health of Hoosiers.

“Numerous studies have shown that people have avoided or postponed vital care since March," Tabor said. “We've heard many stories of people who wound up in the hospital, and in some cases, even the intensive care unit, because they did not get the preventative care they need. It is important for Hoosiers to know that it's safe to seek care—far safer than waiting until their health has deteriorated."​

Hospital; IHA