Virus Outbreak California

The author says that, before the coronavirus pandemic, we already knew that our health care system was broken. Now, the hospital system might be the wake-up call that is needed to finally overhaul the health care system in the U.S.

COVID-19 effectively put a halt to most elective surgeries. As the nation gets vaccinated, however, medical authorities have given the all-clear to resume those surgeries. But, will patients come back?

The answer to that question is important to the nation’s hospitals, whose bottom line has suffered as much as, or even more than, most of their patients.

Last year, hospitals were forced to shut down surgery in order to create capacity for skyrocketing cases of the coronavirus. But, even after beds opened up again (as a result of the reduction in new, serious COVID-19 cases), most patients are still putting off surgery, concerned that they might catch the coronavirus during a hospital stay.

In 2020, revenues at the nation’s hospitals declined by $320 billion. At the same time, drug expenses increased by 17 percent, labor by 14 percent and hospital supplies by 13 percent. This year, hospitals are expected to lose another $53 billion to $122 billion, which amounts to 4 to 10 percent of their total sales. In the meantime, costs continue to rise.

A recent health care market research survey by Becker’s Hospital Review found that fully 68 percent of respondents, who are considered health care leaders, believed patient fear will delay or limit demand for surgery for at least the next six months. In response, hospitals are working overtime to turn the way they do business on its head.

Since making patients feel safe must be their top concern, hospitals have implemented a number of changes in the way in which they operate. For instance, 68 percent of hospitals surveyed have reserved operating rooms and/or intensive care units just for COVID-19 patients. About 23 percent of these organizations have allotted an entire building, including parking lots, to ensure coronavirus patients are isolated from other patients.

That increases the feeling of safety but cuts down on the number of non-COVID patients that can be served at any one time. As a result, more than 70 percent of hospitals are running at less than 75 percent capacity.

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That level of separation also incurs costs that would otherwise be saved. Additional cleaning, maintaining personal protective equipment and conducting testing, as well as the need for higher numbers of employees to accomplish all of the above, hurt the bottom line. As readers might imagine, the demand for additional cost savings is of paramount importance. That is where virtual care solutions come in.

Virtual health care reduces cancellations, streamlines surgical operations, provides less time in the physical hospital setting and reduces costs dramatically. Many hospitals had already been employing some level of virtual care, but it was mostly confined to information gathering and storage. The bad news is that few hospitals have the appropriate tools necessary to effectively deliver virtual care at the scale required.

There are no easy answers to the dilemma hospitals face, outside of more aid from the federal government. The Provider Relief Fund, which was included in the Coronavirus Aid, Relief, and Economic Security Act, is currently helping hospitals to stay afloat.

But, the $100 billion fund is not nearly enough, according to the American Hospital Association. Given the present trend, I have to agree that it won’t be enough to keep the doors open in many emergency rooms, let alone surgical centers.

What’s worse, most medical experts believe that we should expect additional coronavirus-type threats in our future.

Before the pandemic, we already knew that our health care system was broken. It is clear to me that we can no longer deny the obvious. The hospital system may be the wake-up call that we all needed to finally overhaul the health care system in the U.S.; at least, I hope so.

Bill Schmick is registered as an investment adviser representative of Onota Partners Inc. in the Berkshires. He can be reached at 413-347-2401, or email him at