VA hospitals struggle with revenue loss from suspended surgeries

Virginia News

RICHMOND, Va. (WRIC)- Virginia’s hospitals are struggling to balance their budgets as coronavirus causes a critical revenue stream to evaporate.

Gov. Ralph Northam’s executive order suspended all non-essential surgeries to free up space for COVID19 patients and preserve personal protective equipment.

Julian Walker, Vice President of Communications for the Virginia Hospital and Healthcare Association, said the order was necessary but it’s causing financial strain at a time where providers are increasing investment to combat coronavirus. Walker said those losses could range in the hundreds of millions in the next thirty days.

On Monday, one of the largest healthcare systems in the country announced they would furlough employees ‘not directly’ working with COVID19 response for up to 90 days, citing an “unprecedented decline in services.” Bon Secours Mercy Health employs more than 11 thousand people at its seven Virginia hospitals, according to its own site.

MORE: Bon Secours to furlough associates ‘not directly working’ on COVID-19 response

About 30 percent of the state’s hospitals and more than half of its rural hospitals were operating in the red prior to the pandemic, based on the VHHA’s 2018 figures.

“So these financial pressures exist outside of this current pandemic but they are certainly inflamed by this pandemic,” Walker said.

In some parts of the country, that additional pressure is putting rural hospitals in particular at imminent risk of closure. Virginia has had two rural hospital closures since 2013, part of a growing nationwide trend.

When asked if that’s a realistic outcome in Virginia, Walker said, “There’s always a risk. Rural hospitals face a real challenge.”

The federal stimulus package signed by President Donald Trump on Friday includes more than $100 billion in emergency funds for healthcare providers. Walker said that money isn’t flowing to providers yet.

“It’s a necessary step. It might not be the only necessary step,” Walker said. “We don’t know how those funds will be divided up. We don’t know how much may be coming to Virginia.”

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