Maine Hospitals and physicians are the latest to warn that they will need financial help because of losses tied to the coronavirus pandemic. Hospitals are asking the state for $100 million in assistance, while independent physicians are seeking $20 million.
As Maine Hospital Association Vice President Jeffrey Austin told Maine Public's Irwin Gratz, the pandemic has hit hospital revenues on an number of fronts:
Ed. note: this interview has been edited for length and clarity
Austin: In March, when everyone realized that this was a big pandemic and something that's going to affect life, both the President and the Governor directed hospitals to cease elective procedures. And elective procedures kind of get a bad name, it sort of implies it's not necessary, but it's really the scheduling that's elective. That led to a drop in hospital activity and, accordingly, hospital revenue of about 50%. So literally overnight, the workload and the revenue coming in dropped by 50%, the idea being that no one knew how many people were going to get COVID and, more importantly, how many were going to get hospitalized. So one of the goals was to sort of clear capacity.
The second thing was some of the equipment necessary that we've all heard about, the PPE, masks and so forth, needed to be preserved. So not using them for elective surgeries, and instead preserving them for COVID. Thankfully, we didn't have the feared surge like New York City or Italy. But the work was still done, or the work was still delayed and not done, as the case may be, and revenues plummeted at hospitals and private medical practices across the state.
Gratz: All right, as you know, not all hospitals are the same. Was there a particular kind, big or small, urban or rural, which has had a greater need?
Oddly, no, it's been one of the stories of this pandemic that, not only within Maine — there has been a range of hospitals large and small, urban and rural, as you said — but across the country, as we talk to our colleagues, the revenue picture was the same. It was about half everywhere. And where COVID was active was not consistent across the country or across the state. So Maine Medical Center in Portland has absorbed a lot of the cases in Maine and hospitals in New York and so on and so forth. But, in terms of the drop in electives or the drop the non-emergent surgeries and workload, that was really consistent across the state and across the country at around 50%.
Where do you think the state might get the money that you're seeking?
One, the Medicaid program has seen a lighter caseload and lighter expenditures. So they've actually saved some money from people not going to the hospital. It's not just Medicaid, obviously, private payers and all the like, but to the extent that the workload was not coming in, and we weren't receiving revenues, payers were not paying revenues. So we think there is some excess Medicaid capacity in the budget. The federal government increased its share of what it pays for Medicaid. That's one of the ways they provided relief. So in a few different ways, the Medicaid program should have some money to provide some relief.
But then the other issue will be the $1.25 billion that the feds have provided to the state. Would that be available for some of these hospitals? We think it will. And if it's not clear now, we're hopeful that in the next federal package, though, they'll make that clear that it can be used in this way.
So the hospitals are seeking — I just want to also be straight — the hospitals are asking for about $100 million?
Correct. And then the independent physicians who are not employed with hospitals — many are right now but some are not — they're also seeking about $20 million, because they've had a similar experience.
What could happen if the hospitals can't get access to this extra money?
I appreciate you asking that. In any given year, out of Maine's 36 hospitals, a little over half are losing money. They're in the red. And several hospitals, I think eight, have been in the red for at least five consecutive years. Two are already trying to restructure in bankruptcy. So we need this relief to make sure that that does not grow.
Originally published at 5:00 p.m. June 25, 2020.