Iowa hospitals to lose $433 million in 2020 because of pandemic, study says

Published: Dec. 16, 2020 at 9:35 PM CST
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DES MOINES, Iowa (KCRG) - The Iowa Hospital Association says the financial impact of COVID-19 on Iowa hospitals is projected to be $433 million loss.

According to a statement from the IHA, an updated report recently released also shows that half of Iowa hospitals were operating at a financial loss at the end of October.

The study, conducted by accounting and consulting firm CliftonLarsonAllen , is an updated analysis that was completed in May. The latest report includes information from the Iowa Hospital Association’s most-recent Databank survey of Iowa hospitals and an analysis of the pandemic’s costs to the state’s hospitals from March through October.

The estimated total cost of COVID-19 to Iowa hospitals from March through December is $1.25 billion. This is offset by provider relief funds, netting the estimated $433 million loss.

This projection does not include other federal funding sources, such as the Paycheck Protection Program and the Federal Emergency Management Agency, and state funding.

The report also highlighted other key Iowa hospital data trends from March to October:

  • 11% decline in outpatient visits.
  • 17% decline in inpatient discharges.
  • 22% decline in ambulatory surgeries.
  • 24% decline in inpatient surgeries.
  • 26% increase in expenses per discharge.
  • 29% decline in operating margin (with federal support, the average operating margin for Iowa hospitals is 2%).
  • 8.3% increase in the average length of stay for acute care patients.

“The report underscores the immense financial strain Iowa hospitals and health systems are facing because of COVID-19,” said Iowa Hospital Association President and CEO Kirk Norris in a statement. “We also must remember that many Iowa hospitals were experiencing severe financial issues before COVID-19. A new rural emergency hospital model is needed for hospitals to survive beyond the pandemic.”

The report also notes that uncertainty surrounding the amount of provider-relief funds at risk of being returned to the Centers for Medicare and Medicaid Services is also exasperating the situation.

”As challenging as this year has been, 2021 may prove to be devastating for many Iowa hospitals if a significant amount of relief funding must be repaid,” Norris said. “Action by Congress and Iowa’s State Legislature is needed urgently to support the immediate and long-term viability of Iowa’s hospitals and health systems.”

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