Between June and July 2019, nearly 4,200 procedures from a list of "high-volume procedures" were performed, while only 3,200 procedures from that same list were performed between June and July 2020.
Nearly 60% of New Jersey hospitals are in the red and the average statewide operating margin for providers is negative 4%, according to a report released by the Center for Health Analytics, Research and Transformation (CHART) at the New Jersey Hospital Association (NJHA) late last week.
The report, which analyzed the impact of the COVID-19 pandemic on New Jersey hospitals, attributed the weakened financial performance among providers to "a dual blow of declining revenues and rising expenses."
Compared to the first half of 2019, mid-year statistics for New Jersey hospitals include total patient revenues down 6.6%, emergency department cases down 23%, hospital admissions down 8%, and outpatient visits down 22%.
In late March, Governor Phil Murphy issued an executive order to suspend most elective procedures at hospitals in New Jersey in order to handle the influx of patients infected with COVID-19.
Related: N.J. Consortium to Develop Mobile Medical Units to Address Health Shortages
Elective surgeries typically serve as a reliable revenue generator for hospitals and CHART found that providers have experienced a slow rebound in patient volumes in the months since that suspension was lifted.
Between June and July 2019, nearly 4,200 procedures from a list of "high-volume procedures" were performed, according to CHART, while only 3,200 procedures from that same list were performed between June and July 2020.
In addition to revenue concerns, total operating expenses rose 12% year-over-year as hospitals encountered costs for additional staffing and medical supplies.
"COVID-19’s fiscal impact on our hospitals reaches historic levels,” Sean Hopkins, senior vice president of CHART, said in a statement. "The last time we saw margins dip this deep into the red was in the late 1990s when hospitals sustained deep federal payment cuts under the Balanced Budget Act of 1997. At that time, we saw margins fall to negative 1.7 percent and negative 2.3 percent in 1998 and 1999, which pales in comparison to the numbers we’re seeing today."
The report is the latest analysis of the impact COVID-19 has had on the financial standing of hospitals and health systems in the Garden State.
New Jersey hospital revenues have dropped $650 million per month due to the COVID-19 outbreak, according to a NJHA report released in mid-May.
The analysis estimated that the pandemic caused the average hospital operating margin to drop from 4.3% at the start of the pandemic to negative 30%.
Additionally, while revenues fell by 32% per month, expenses at New Jersey hospitals rose more than 10%, totaling $214 million per month.
The report noted that these expenses do not include those "associated with hospitals’ expansion of bed capacity."
Related: New Jersey Hospital Revenues Fell $650M Monthly Due to COVID-19
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
The Link LonkOctober 05, 2020 at 09:24PM
https://www.healthleadersmedia.com/finance/mid-year-analysis-almost-60-new-jersey-hospitals-red
Mid-year Analysis: Almost 60% of New Jersey Hospitals in the Red - HealthLeaders Media
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