New research shows impact of coronavirus on hospitals, health systems. FAIR Health's second coronavirus study highlights revenue and utilization.
According to their findings, average per-facility revenues in large hospitals in the Northeast dropped by 26% as the coronavirus pandemic further spread. The figure is based on estimated in-network amounts with comparison to the same period in 2019.
Meanwhile, the decline in revenue for large hospitals was 16 percent.
The study entitled "Illuminating the Impact of COVID-19 on Hospitals and Health Systems: A Comparative Study of Revenue and Utilization" sheds light on the financial impact of coronavirus pandemic on hospitals.
Researchers compared revenues according to estimated in-network amounts on private insurance claims given by facilities in the first quarter of 2020 with the first quarter of 2019.
The third week of March 2020 saw thousands of new coronavirus infections became commonplace in some areas in the US, particularly in the Northeast.
Hospitals and health systems suffered from financial strain as many elective procedures were pulled off.
IBNR
The team evaluated claims data processed by April 30, 2020. With this, some claims for services during the period monitored were "incurred but not reported" (IBNR). These are valid claims for covered services that were done but not yet submitted to the insurer.
Moreover, the study's observations on the impact of COVID-19 on hospitals was deemed substantial and carry public health relevance.
The results magnified an association between larger hospital size and greater impact from COVID-19.
In large facilities or those with over 250 beds, average per-facility revenues based on estimated in-network amounts dropped from $4.5 million in the first quarter of 2019 to $4.2 million in the first quarter of 2020.
The difference was less apparent in midsize facilities or those with 101 to 250 beds and not noticeable in small facilities with 100 beds or less.
COVID-19 had its greatest impact on hospitals in March throughout he first quarter of 2020. This is when midsize facilities reported that the decline in average per-facility revenues based on estimated in-network amounts in 2020 from 2019 was four percent. On the other hand, large facilities reported five percent.
Moreover, facilities in the Northeast felt the impact of COVID-19 more than those across the country in general.
The decline in average per-facility revenues based on estimated in-network amounts in March 2020 from March 2019 in the Northeast was five percent for midsize facilities and nine percent for large ones.
Decline in facility discharge
Results revealed that the decline in facility discharge volume from March 2019 to March 2020 was bigger on a percentage basis than the decline in revenues based on estimated in-network amounts.
Across the US, the decrease in facility discharge volume in the third week of March 2020 from the corresponding week in 2019 soared higher compared to the first two weeks.
However, in the Northeast, in midsize facilities, the fourth week of March showed a bigger decline (34 percent) than the third week (30 percent).
From March 2019 to March 2020, the outpatient share of the distribution of estimated in-network amounts by settings decreased relative to the inpatient share. The effect was more pronounced in the Northeast than nationally.
"With this second study, we again use our data repository to shed light on the impact of COVID-19. As the pandemic continues to test the entire healthcare system, FAIR Health seeks to provide data and analysis to support all the system's participants," said FAIR Health President Robin Gelburd.
