COVID-19: Hospital Revenue Losses Might Pile Up to $122B in 2021

HBI Blog / COVID-19: Hospital Revenue Losses Might Pile Up to $122B in 2021

The hospital revenue losses throughout the country might be down to anywhere between $53B to $122B, as compared to pre-pandemic levels because of COVID-19. Moreover, it might also affect vaccination efforts.

According to a new analysis that was released by the American Hospital Association (AHA), the health systems and hospitals, under the most optimistic scenario, could collectively lose revenue worth $53B in 2021. However, if they continue to experience slow, partial recovery of volumes, cyclical COVID-19 surges, and slow vaccine rollout, the revenue loss might reach $122B.

Hospital Revenue

The scenarios indicate losses anywhere between 4 percent to 10 percent of the total hospital revenue, which, even in the best case, is “bad news” for the hospitals and health systems.

Whether recovery from COVID-19 in 2021 is rapid or slow, America’s hospitals are bound to face another struggling year to regain their financial health while they continue providing necessary care and services to the country, which is continuing to experience the effects of an unprecedented pandemic.

The analysis indicated that COVID-19 might be responsible for the increase in certain expenses, with the largest increase being at 17 percent for prescription drugs, followed by purchase services at 16 percent, labor at 14 percent, and supply at 13 percent. All the figures are from the previous year, and the pressure is likely to be persistent in 2021.

Hospitals, along with other provider organizations, have already received the better part of $178B that was put aside in emergency funding for healthcare providers from the previous stimulus packages for COVID-19. With just $4.4B left in the fund, hospital leaders are pushing for more financial aid.

According to the analysis, hospital outpatient revenue might contribute most to overall revenue losses that could be anything between $27B to $64B. Besides, inpatient revenue might decline by $17B to $41B, and emergency department revenue in between $9B and $17B.

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