The month of May will be a difficult one for Northwestern Medical Center. The hospital last week released a 10-point plan to substantially reduce its expenses, including an offer to employees of a voluntary leave program twined with a severance package. NMC has lost money for the last three years and the Covid-19 pandemic, which has eliminated the hospital’s elective surgery options, has compounded the challenge. The hospital intends to make the necessary payroll and program adjustments by the end of the month.
NMC’s sustainability plan is part of a pattern across the state. Hospitals have seen their revenues plunge and their costs soar. There is a pronounced fear that many hospitals, particularly in rural areas, may not survive.
That is not the case at NMC, which has roughly 150 days cash on hand. There are, however, hospitals in the state that are at risk, and it’s easy to see why: hospitals in Vermont are losing a total of roughly $100 million a month during the shutdown caused by the virus. The University of Vermont Medical Center expects to lose a total of $152 million for the year.
As the shutdown extends, the losses become staggering; 90-days and the total hits over $300 million. That loss seeps down into every nook and cranny of the state’s economy.
The good news is that the hospitals’ response to the virus has been outstanding, as has the public’s. The patient numbers have been below our best case projections. Far below, in fact. All our hospitals are operating below capacity; but are in a state of readiness should the virus flare up in unexpected numbers.
The strategy now, one would hope, is figuring out how to manage the logistics so that hospitals can separate the very few Covid-19 patients they have from the general population patients they so desperately need to stay in business, remembering that a lot of these non-Covid-19 patients are becoming sicker by not being able to receive the appropriate care.
It’s not a simple flip of the switch for hospitals to shift from pandemic-only care to business as usual. Hospitals are large organizations [NMC has 840 employees] and it takes time to coordinate supplies and schedules for both patients and employees.
And it’s time that is in short supply. Vermont can’t afford for its hospitals to be down much longer, particularly when the patient load is so light. We have 11 people hospitalized statewide and another eight who are hospitalized and under investigation. On Wednesday, for the first day since March 13, we had no new cases, which was highly encouraging.
From one end of the state to the other each community hospital is being put in the same position as NMC. They have no choice but to slash expenses, including personnel. But our hospitals, collectively, can’t cut enough to absorb $100 million a month losses. It’s important to remember that of the state’s 14 hospitals, six of them lost money last year and five of them lost money for the last three years prior to that. The hospital in Springfield is struggling through bankruptcy and Copley Hospital in Morrisville is reportedly close to exhausting its cash reserves. These are state-of-the-industry situations before the virus hit. Imagine the trouble they are in today.
The same brains responsible for organizing the hospitals’ response to the virus need to be employed to figure out how to reopen them and how to manage the lingering Covid-19 cases along with the hospitals’ regular business. It’s a delicate balance to manage, which is a given, but for the sake of our hospitals and Vermont, it’s crucial to push forward. If we don’t do this quickly, and well, we could have a post-virus health care system that is far weaker coming out of the virus than going in. That hurts us all.
by Emerson Lynn