Part of Saint Mary’s Medical Center was converted into a COVID-19 unit, which hasn’t been pressed into use yet but is on standby in case there is a surge in cases. (Kevin N. Hume/S.F. Examiner) (Kevin N. Hume/S.F. Examiner)

Hospitals call for state, federal funding as revenues plummet

Medical centers furlough workers due to lost revenue from canceled elective procedures

Bay Area hospital leaders are asking for $1 billion dollars in state funding to keep hospitals afloat during and beyond the COVID-19 pandemic.

In April, California hospitals were asked by Gov. Gavin Newsom to step up and prepare for a 50% surge in ICU patients. To prepare for tens of thousands of COVID-19 patients, hospitals have shifted their operations dramatically, cancelling elective surgeries and many outpatient services which are a significant source of revenue.

“We have really stepped up, changed our operations, changed our service lines to meet this demand,” said Dr. David Klein, CEO of San Francisco’s Saint Mary’s Medical Center and Saint Francis Memorial Hospital, at a teleconference on Tuesday.

Saint Francis partnered with UCSF Health, Zuckerberg San Francisco General Hospital and the San Francisco Department of Public Health to open The City’s first and only dedicated COVID-19 unit in early April by repurposing an existing unit at Saint Francis. Part of Saint Mary’s was also converted into a COVID-19 unit, which fortunately hasn’t been pressed into use yet but is on standby in case there is a surge in cases.

“Although the pandemic is really not over, this collaboration has really helped us to stay ahead of any surge and to help our community and other hospitals in the area,” Dr. Klein said, but “Obviously this has come with a significant impact on our finances.”

Statewide, hospitals are estimated to have lost $10-14 billion, according to Carmen Coyle, president and CEO of the California Hospital Association .

“Like hospitals across the state, in our community, and even the country, we did suspend elective procedures,” Dr. Klein added. “We closed elective procedures, elective surgeries, we closed many of our outpatient clinics and I think everybody knows that those are the areas with which hospitals make up most of our revenue.”

Patient volume is down 50% at Saint Mary’s and Saint Francis, resulting in a steep drop in income for the hospitals, prompting the hospitals to furlough and reduce the schedules of employees.

To prevent long-term damage to hospitals across the state, the California Hospital Association is asking for $1 billion dollars in funding at the state level by June, and for that figure to be matched by the federal government later this year.

If hospitals want to return to pre-COVID-19 capacity when this pandemic comes to a close, and be prepared for future public health crises should they arise, the current level of aid received won’t be enough, according to Coyle and Dr. Klein.

“Without adequate funding it’s going to be really difficult for hospitals to recover financially from this pandemic, and we will again be in a very weak position, a much weaker position if, and most likely when we face something like this again,” Dr. Klein said.

It will likely take months to safely get volumes of elective procedures and emergency room visits back up to previous levels, as people are reluctant to leave their homes for the hospital unless absolutely necessary. Hospitals also must remain prepared for another spike in infections as shelter-in-place restrictions are gradually eased and businesses start reopening.

Saint Mary’s and Saint Francis are home to the only adolescent psychiatric unit in The City, the largest burn unit in Northern California and one of few acute in-patient mental health units, which focuses on treating substance abuse and other mental illnesses in unhoused people. Significant state and federal aid will be necessary to keep units like these open and keep hospital workers employed.

“Although we’re really grateful for the funding we’ve received so far, unfortunately it doesn’t come close at all to bridging the gap that we’re experiencing,” said Dr. Klein.

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