California’s hospitals are experiencing unprecedented financial stress due to the COVID-19 pandemic, with net losses projected to hit $14.6 billion by the end of 2020. The losses are “way above anything anyone could have anticipated… the costs have been nothing like we have ever seen before,” said Jan Emerson-Shea, a spokeswoman, for the California Hospital Association, which represents about 400 hospitals, large and small.
“The dramatic slowdown of non-emergency services due to the COVID-19 pandemic, and the resulting dramatically reduced margins that damage hospitals’ financial strength, are expected to present unprecedented challenges to hospitals’ abilities to serve their communities and remain financially viable,”reports a new study commissioned by the hospital association.
Before the pandemic, about 40%of California hospitals operated in the red, while about 11% broke even. That 40% has jumped to nearly two thirds, according to Emerson-Shea. Virus preparation, fewer nonessential surgeries, and the economic downturn contribute to their ballooning expenses.