Most U.S. Hospitals Are Empty Soon They Might Be Closed For Good

Tens of thousands of health care workers across the United States are going without pay today, even as providers in the nation’s hot spots struggle to contain the coronavirus pandemic

This “tale of two hospitals” is a function of clumsy, if well-intentioned, federal and state directives to halt all non-emergency procedures, which appeared at first blush to be a reasonable precaution to limit unnecessary exposure and safeguard staff, beds and equipment.

But instead of merely preserving hospital beds and other resources, this heavy-handed injunction has created a burden of its own design: a historic number of empty beds in systems left untouched by the pandemic.

Those hospitals have resorted to unprecedented levels of furloughs to stave off temporary budget shortfalls, but industry and economic trends point to more lasting outcomes unless immediate action is taken.

At 18 percent of the U.S. economy, health care is a $3.6 trillion industry annually. By barring all elective surgeries, which covers a huge array of operations, like knee reconstructions or even cancer biopsies, hospitals have been denied billions in revenue in just the last month alone.

Outpatient services account for half of all hospital revenue, which means hospitals are now making, and spending, half what they were this time last year.

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It’s not surprising, then, that the industry shed a record 43,000 health care workers in the first month of this crisis. Experts expect equal or greater layoffs this month, when the sustained forbearance has made revenue even more urgent.

Even before this crisis, one in four rural hospitals were vulnerable to closure. Now, many of these rural systems have more empty beds than ever before.

It doesn’t take an economist to understand the underlying economics here. And it won’t just be rural health care that will suffer—hospitals in every corner of the country might close for good.

The coronavirus will continue to spread throughout the United States, but our ability to treat and prevent its transmission will be severely constrained if as-yet-unaffected hospitals resort to mass layoffs. We need to sustain robust staffing in every corner of this country—and prohibiting elective surgeries outright is wildly counterproductive.

Understand: The availability of clinicians in hot spots like New York City, New Orleans and Detroit is no more an urgent public health crisis than health care staffing everywhere else because when this is over these patients will still require dialysis, chemotherapy and other life-saving treatments.

Health care has historically weathered economic downturns in stride because people get sick even in depressions, but this is unlike previous slumps. In the past 30 years, there have been only four months where the industry destroyed jobs. What used to be the worst case, in 2003, was just one-quarter of the losses experienced in March.

Hospitals are in the business of treating patients, but few are any more—which means more furloughs are ahead unless and until hospitals are allowed to perform their basic function: provide health care.