The financial impact of the coronavirus pandemic on New Jersey’s hospital systems is severe, according to a financial impact report from the New Jersey Hospital Association.
NJHA’s Center for Health Analytics, Research and Transformation polled the state’s acute care hospitals for fiscal impacts from COVID-19 between March and April. The hospitals said revenue fell 32%, or $650 million per month, due to Gov. Murphy’s executive order suspending all elective surgeries. On Friday, Murphy announced that those types of procedures can resume May 26.
“With Executive Order 109’s suspension of most elective surgeries and procedures, hospitals focused on COVID care, decompressing their surgery and procedure schedules to trauma and emergency care, labor and delivery, and life-saving surgeries. Consequently, N.J. hospitals are reporting significant declines in several key areas. Hospital volume is down for non-COVID inpatient admissions, emergency room visits, outpatient procedures and laboratory, radiology and other diagnostic tests,” Sean Hopkins, senior vice president of CHART, said.
Since the virus first hit New Jersey on March 4, hospital expenses have increased 10.6% or $214 million per month, the report said. Increases are due to demand for more supplies, such as PPE, and staff, such as overtime and per-diem members. The NJHA said these figures do not include hospitals’ expansion of bed capacity.
“COVID-19 is an unprecedented event for our healthcare system, and our hospitals have directed all of their resources at it, including extraordinary efforts to expand capacity that kept our state ahead of the curve,” Cathy Bennett, CEO and president, NJHA, said. “Unfortunately, that doesn’t come without risk to hospitals’ own fiscal health.”
Hopkins said the statewide hospital average margin has fallen from 4.3% at the start of the pandemic to negative 30% now.
“COVID-19 demonstrates that even health care — long assumed to be immune to economic downturns — is vulnerable in an event of this magnitude that requires hospitals to target virtually all of their resources at the public health crisis,” Bennett said.
