California Hospitals in Financial Trouble After Preparing for Coronavirus Surge that Never Came

This picture taken on March 16, 2020 during a press presentation of the hospitalisation service for future patients with coronavirus at Samson Assuta Ashdod University Hospital in the southern Israeli city of Ashdod, shows empty hospital beds in a ward. - As of March 16, Israel has 255 confirmed cases …
JACK GUEZ/AFP via Getty Images

California was one of a few states hit hard by the coronavirus as it spread throughout the U.S. in March. Hence, hospitals shut down routine procedures and called in thousands of health care workers from across the country to help patients.

The only problem is, the predicted coronavirus surge never came.

Reuters reported that many of the costs associated with setting up field hospitals, doubling intensive care units, and purchasing personal protective equipment hit the hospitals right in their purse strings, while the ban on elective procedures sliced their revenue in half.

The measures drove some hospitals in the state close to bankruptcy, costing them as much as $14 million and forcing them to lay off close to thousands of health care employees, according to the California Hospital Association.

Other hospitals, such as the Stanford Health Care (SHC) system, implemented a temporary reduction in hours across the whole organization to stay afloat, KGO reported.

“But we’re being asked to use our hard-earned Paid Time Off, or to go unpaid, and file for unemployment until July- or for another ten weeks- if not longer,” one nurse revealed.

California called for a Health Corps in March, which 95,000 people signed up for. But of those 95,000 people, fewer than 800 have been hired by the state, Reuters reported.

“The worst thing we could do was really to under-prepare,” said Dr. Sanjay Kurani, Medical Director at Santa Clara Valley Medical Center, a public hospital system serving California’s Silicon Valley. “From a patient health standpoint and from a public health standpoint, we had to prepare.”

The hospital industry is now asking the state for a $1 billion bailout to help hospitals pay off some of those costs, and another $3 billion once the new fiscal year starts July 1.

“Most hospitals’ balance sheets have been trashed,” said Carmela Coyle, president of the California Hospital Association. “It’s a one-two punch that many hospitals will find it difficult to survive.”


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