Dr. Mark Wakefield is used to a full surgery schedule.
In normal circumstances, University of Missouri Hospital performs 100 surgeries a day, sometimes more. That’s not including sedated, outpatient procedures like colonoscopies.
"When we’re doing more than 100 cases a day, we’re effectively at our operating real estate capacity," Wakefield, MU Health Care’s associate chief medical officer, said.
And then, in mid-March, the OR schedules slowed to a crawl as MU Health Care canceled elective and non-emergency procedures. For about a month and a half if a surgery wasn’t deemed to significantly impact the outcome of a patient, it was put off. Emergency surgeries, operations on cancer, resolving an aggressive infection – those types of procedures continued. All others, like knee replacements, stopped.
"As a result, we were doing about 25 surgeries a day," Wakefield said. "75 patients a day were needing surgeries and not getting it."
That adds up to 2,000 procedures over the time COVID-19 precautions interrupted hospitals’ normal operations. MU Health Care, as well as other area hospitals, began to slowly restart some normal operations in early May.
MU Health Care has achieved 80 to 90% of its pre-COVID capacity.
At Boone Hospital Center, 1,000 tests and procedures were rescheduled. The facility began addressing that backlog May 4 and operated at 50% capacity for two weeks. That increased to 75% last Monday.
But all those rescheduled procedures meant deferred or lost revenues for hospitals that still had to keep running 24/7 operations while increasing stores of personal protective equipment and paying staff.
The question now is: will treating the backlog of deferred cases be enough to jump-start hospitals’ waning bottom lines?
THE PRICE OF THE PAUSE
No one in hospital leadership disputes the precautions taken on the onset of COVID-19. But the full stop to elective procedures, a primary source of revenue, came at a cost.
"Everyone was assuming that hospitals are open, they’re taking care of people they are going to be fine in this crisis, but that’s just not the case," Dr. Robin Blount, vice president and chief medical officer at Boone Hospital Center, said.
According to a report from the Missouri Hospital Association, the decrease in care led to "an aggregate loss in revenue of $32 million a day, or nearly $1 billion per month" for Missouri hospitals.
A report delivered Tuesday to the UM Board of Curators stated that MU Health Care lost $3 million in March after recording an operating margin of $7 million for the March 2019.
Faculty in the School of Medicine are taking a 10 percent pay cut, MU Health has laid off workers and sent others home on furlough.
Hospitals don’t receive reimbursement for their services immediately. If the patient is insured, the facility might receive a copay up front. But full payment usually takes anywhere between a couple weeks and a couple months.
So, some reimbursements continued to come in during the pause of normal hospital operations.
"But considering that’s been two and half months there are probably very few accounts receivable still out," MHA Vice President of Public and Media Relations Dave Dillon said. "Then of course there was a dramatic drop of accounts receivable during the lockdown."
Which means many hospitals are two months behind their normal operating levels. For MU Health Care, the decrease in care was a compounding issue. The system was coming off a five-year high in profits, but was approaching its ceiling in terms of capacity increases.
"We made some strategic decisions to improve our volumes … but that’s only sustainable growth to a point," Wakefield said. "Mid-Missouri is a fixed population. We serve about 750,000 and it’s not a part of the country that’s growing, so then you have to be more efficient in giving that care."
But efficiency alone won’t help a hospital that’s only seeing a quarter of its regular patients. Boone Hospital Center and MU Health Care both experienced either furloughs or layoffs in light of decreased revenues.
BJC, which operates Boone Hospital under a management lease that will end in December, furloughed almost 3,000 employees across its entire system, the St. Louis Post-Dispatch reported.
"Even if you can furlough and lay off (workers), there is a critical minimum staffing that you have to maintain for the safety of emergency care," Wakefield said. "I am optimistic that if we can safely increase our volume of elective surgeries, this will help us restore our system to a balance that we can still attain those missions of clinical care."
Dillon, however, has reservations. Hospitals have a fixed capacity, so there is only a certain amount of care they can offer. That, combined with the fact that many people are no longer coming in for check ups and other standard procedures, puts hospitals at a disadvantage for making up the losses.
Performing deferred procedures will help, he said. So will the federal and state-level relief programs many hospitals, including MU Health Care, have taken advantage of.
"All that being said … you can’t truly make up for what was lost, and the programs that are out there only help reduce the gap," Dillon said.
There’s also the looming uncertainty of another lockdown if COVID-19 cases increase in the coming months, which is a reality at least one Missouri hospital is accounting for heavily in its calculations.
HEDGING THEIR BETS
Steven Edwards is the CEO of CoxHealth in Springfield. CoxHealth didn’t layoff or furlough any workers despite significant decreases in revenue – a move he admits to be a gamble.
His reasoning is simple. There are 6,000 backlogged cases across the CoxHealth system. Cases he’ll need staff to address and address quickly. Although COVID-19 cases are low right now in Greene county – 113 or 39 cases per 100,000 residents – that could change.
"We fear it will grow and likely will grow this fall," Edwards said. "We look at it as a window to address patient needs quickly."
Edwards said the system made the decision to rely in part on cash reserves. The system, he said, can sustain that loss, and then, hopefully start breaking even or turning profits in about two and half months.
His operating rooms are already back to 100% of pre-COVID capacity. Edwards said some parts of the hospitals are even running at 125% capacity.
"So, it was our thinking that if we need to take care of our community, we are going to have to work well beyond our normal volumes," he said. "We have five months until the fall, we have one month to work up the volume and those four months we have to make up volume. It’s a gamble, and our judgment is it’s a right gamble to take."
Hospitals are still assessing the safest path forward, not only from a financial stand point, but from a patient care perspective. Just because a procedure is elective, doesn’t mean it’s unnecessary.
"We need to be able to get folks in for their mammograms and their other procedures," Blount said. "They are not unnecessary procedures. We don’t like to say something is just elective. They are needed health care that we put off."
Despite Dillon’s reservations on the probability hospitals will regain losses, he is optimistic that Missouri hospitals will stabilize operations by the end of the year.
"That’s kind of the path forward as we’re seeing it now with a giant caveat," he said. "We’re just reopening and it’s been made abundantly clear that if we are to see a massive spike in transmissions that collectively as a state, we’ll have to figure out how to manage it."
To that end, hospital leaders are confident of their ability to decrease volumes quickly and efficiently if necessary. They did it once before with no preparation at all. Hopefully, that won’t be necessary.
If that be the case, Dillon said, legislators, advocates and health care leaders might be able to pause and reassess how to make the business of health care more stable in a post-COVID climate.
"That is a question that hopefully we will address once we understand what we just went through," he said.