New Hampshire Hospitals Impact of COVID-19 New Hampshire Hospital - - PowerPoint PPT Presentation

SLIDE 1

New Hampshire Hospitals

Impact of COVID-19

as of June 30, 2020

New Hampshire Hospital Association

SLIDE 2

Source: IMPLAN * Output represents the total value of healthcare industry production as a portion of the state’s gross domestic product. For the service industries, IMPLAN defines Output as Revenues

Hospitals are a leading industry in New Hampshire

Largest Industry by Labor Income Largest Industry by Total Output* Largest Industry by Number of Employees

3rd 4th

4th

4th

• Behind Wholesale Trade and Government/Education
• Behind Owner-Occupied Dwellings, Wholesale

Trade, and Real Estate

• Behind Government/Education, Real Estate,

and Wholesale Trade

Hospitals are Economic Engines

SLIDE 3

Strengthening the State’s Economy

New Hampshire’s hospitals and health systems are a vital component of the state economy and play an integral role in local business and community development.

Source: New Hampshire Hospital Association: Hospital & Health Systems’ 2018 audited financial statements and IMPLAN

40,451

Total # of people employed by NH hospitals

$1.7 Billion

Additional salaries & benefits from secondary jobs

$3.7 Billion

Total annual salaries & benefits at NH hospitals

$5.4 Billion

TOTAL SALARIES & BENEFITS IMPACT OF NH HOSPITALS

71,381

TOTAL JOBS IMPACT OF NH HOSPITALS

30,930

Total # of secondary jobs generated in local economy

+ +

I -

SLIDE 4

Investing in Healthier Communities

Preventive Services Community Partnerships Education & Preparation of Future Healthcare Professionals Research & Clinical Trials Educational Programs Meeting the health needs of the uninsured, low-income and other vulnerable populations.

New Hampshire hospitals provide acute-care services in a traditional hospital setting, but they are also responsible for helping improve the overall health of neighborhoods and communities.

Source: as reported by hospitals in 2017 on their IRS, Schedule H 990’s

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IN COMMUNITY BENEFITS.

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SLIDE 5

Even without the financial impact of COVID-19, New Hampshire hospitals have historically

• perated on small margins. In 2018, the aggregate margin of 1.1% equates to only $61.5M.

Historically Low Operating Margins

Source: New Hampshire Hospital Association: Hospital & Health Systems’ 2018 audited financial statements

Acute Care Hospitals State-wide Operating Margins: 2008 - 2018

5.0% 4.5% 4.0% 3.5%

• ~3.0%

...

IQ

2 g' 2.5% 2.4%

:.;:;

IQ

...

QI

8°2.0% 1.5% 1.0% 0.5% 0.0%

Hospitals 2008 with 3 Negative Margins:

2.4%

2009 7

2.1%

2010 7

1.2%

2011 7

1 .9%

2012 6

2.3%

2013 6

1 .8%

2014 9 0 .4% 2015 11 24/26 acute ca re hospita Is represented

1.5%

2016 11

1.6%

2017 6 Represents $61.5 Million

1.1%

2018 8

SLIDE 6

Impact of COVID-19 on Hospitals

Suspended elective & non-urgent procedures to stand up capacity for a potential surge of COVID-19 while ensuring a safe environment for staff, patients and communities Stood up Alternative Care Sites (ACS) around the state to increase bed capacity at hospitals for those patients who need more acute care Engaged in employee furloughs, redeployment and layoffs as a result of suspending elective & non- urgent procedures Invested in Personal Protective Equipment (PPE) and other supplies required to safely treat all patients Set up additional sampling sites and expanded testing capacity across the state

Working with partners at the state, DHHS and DPHS, hospitals have taken the following critical steps to ensure an effective, targeted response to COVID-19:

By April 11th hospitals experienced a 51% reduction in utilization (charges) Since March 20th, hospitals have seen an average of 55% occupancy of inpatient beds (including surge capacity in-house) By May 31st, hospitals statewide will realize an estimated $445 million in lost revenue

These actions, while absolutely the right things to do for patient and staff safety, have created significant financial challenges:

These reductions cannot be absorbed by an industry with such small margins, and these losses are simply unsustainable.

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SLIDE 7

COVID-19 Grants Provided to NH Hospitals

Out of 24 hospitals reporting

CARES Act Funding Amount Distributed to Hospitals in NH Number of Hospitals Impacted (Out of 24 Reporting) Notes

General Distribution 30B Round 1 - Part 1 $100.1 Million 24 Based on 2% of 2018 Net Patient Revenue $20B Round 1 - Part 2 $9.5 Million 13 "True-up" Payments $2.4 Million 9 Targeted Allocations $10B for COVID-19 Hotspots $0 New Hampshire hospitals did not qualify $10B for Rural Hospitals and Clinics $112.6 Million 17 Distributed to roughly 4,000 rural healthcare providers nationwide Rural Distribution "True-up" Payments $207 Thousand 2 Paycheck Protection Program $225M for Rural Health Clinics COVID-19 Testing $641 Thousand 8 Funds to support COVID-19 testing efforts and expand access to testing in rural communities Health Resources and Services Administration $50M - ASPR (Assistant Secretary for Preparedness and Response) $408 Thousand 24 Funds to be spend on PPE NH Emergency Funding - Coronavirus Relief Fund $100M - Healthcare System Relief Fund $35.5 Million 14 Several hospitals applied and waiting for allocation CARES Act Total Received $261.3 Million 24

SLIDE 8

COVID-19 Grants in Context of Hospital Losses

Hospital Losses and Grants Received: March – June 2020

Note: 24 hospitals represented (23/26 acute care and 1 specialty)

• Total Expenses and Net Operating Revenue are actual for March/April, mix of actual and projected for May, and projected

for June

• Grant dollars are actual to date

Hospitals statewide have experienced $538.3M in lost revenue from March to June, and these losses will only continue into the future as we respond and recover from the COVID-19 pandemic.

Total Expenses Net Operating Revenue Gross Variance from Operations Total Grants Net Variance (Gross Variance from Operations Plus Grants) $2,044,948,947 $1,510,088,446 ($534,860,501) $261,325,739 ($273,534,762)

$261.3M

COVID-19 Related Grants to offset

$534.9M

In Hospital Revenue Losses results in

$273.5 MILLION

in continued deficit for hospitals statewide for March - June

Source: New Hampshire Hospital Association, special survey results March – June 2020

SLIDE 9

Projected Hospital Losses through December 2020

Source: New Hampshire Hospital Association Analysis of the Financial Impact of COVID-19 on New Hampshire Hospitals

$759.4 Million

To prepare and respond to COVID-19, hospitals statewide suspended elective & non-urgent procedures, limiting patient services and creating a 51% decrease in utilization. Resuming these services has begun, however it will be months before hospitals experience pre-COVID operation levels.

Measure Names

Impact of COVID-19: Projection of Cumulative Losses in NH Hospitals

March 2020 - December 2020

■

To ta I Expenses

■

Net Operating R evenue

■

Cumulative Net Op. Rev - Total Exp.

$550.0 $543.9

• ;;-

$500.0

C

.!! $489 7 $500.0

:E

$450.0

5

>

" "'

"'

$400.0

C " .jj

l!

"

"-

$350.0

• =:

z

$300.0 $307 3 $250.0 $0.0 ($100.0)

£' ($200.0)

iii

~

($300.0) >

"

"'

.3' ($400.0)

...,

"

z !: ($500.0)

'.P

..

:i ($600.0)

E

::, V

($700.0) ($800.0) Mar Apr May Jun $550.6 $528 3 $530.9 $541.7 $524 0 $486.5 May - Decem ber Contain Est ima ted Values Jul

Source: Hospit al fi nancials submitted to New Hampsh ire Hospital Assocat ion 23/26 Acute Care and 1 Specialty Hospital reporting

Aug Sep Oct Nov Dec

$550.0 $500.0

• ;;;-

C

$450.0 ~

~

C

• =-

"'

$400.0 :::

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)(

w

iii $350.0

~ ...

$300.0 $250.0

SLIDE 10

COVID-19: Partnership to Recovery

Without an infusion of financial resources, hospitals—both large and small—face the risk of running

• ut of operating cash in the next several months.

The financial consequences for hospitals, our patients, communities and New Hampshire’s health care system are potentially devastating. We will need significant financial relief to get through this crisis so that we can be there for our patients and communities. Relief from the Federal CARES Act has been helpful, but certainly has not been distributed evenly across the State and will not be enough to address the hundreds of millions of dollars in lost revenue that hospitals in New Hampshire will experience through the end of the calendar year and beyond. Hospitals have long partnered with the state, from Medicaid expansion and the Doorways, to community benefits and funding for the Governor’s Commission, just as we did to prepare for and respond to the COVID-19 pandemic. We will continue to do so to be there for our patients, communities and citizens of New Hampshire. We can get through this together, but we will need help to ensure our community hospitals are able to emerge from this crisis and be there when our patients and communities need us.

Partnership to Recovery: We are in this together.

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