COVID-19 and the Financial Health of US Hospitals | Health Care Economics, Insurance, Payment | JAMA | JAMA Network
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COVID-19: Beyond Tomorrow
May 4, 2020

COVID-19 and the Financial Health of US Hospitals

Author Affiliations
  • 1Division of Health Policy and Economics, Department of Population Health Sciences, Weill Cornell Medical College, New York, New York
  • 2Division of General Internal Medicine, Department of Medicine, Weill Cornell Medical College, New York, New York
JAMA. 2020;323(21):2127-2128. doi:10.1001/jama.2020.6269

The rapid growth in the number of patients with coronavirus disease 2019 (COVID-19) threatened to overwhelm hospital and intensive care unit capacity.1 The pandemic also raises questions about the ability of hospitals to remain financially solvent amid unprecedented changes in care delivery and billable services. To limit the spread of disease and create additional inpatient capacity and staffing, many hospitals are closing outpatient departments and postponing or canceling elective visits and procedures. These changes, while needed to respond to the COVID-19 pandemic, potentially threaten the financial viability of hospitals, especially those with preexisting financial challenges and those heavily reliant on revenue from outpatient and elective services.

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    2 Comments for this article
    Is it Time to Budget Hospitals?
    Johnathon Ross, MD, MPH | Toledo Lucas County Board of Health
    Covid-19 has shown us the complexity and instability of our health care financing system. Can you imagine if the Fire Department was financed the way we finance health care, with private insurers and co-pays and deductibles? We would regularly burn down cities and towns. Most cities have perfectly adequate firehouses and trucks in every part of the city in both rich neighborhoods and poor. Why should hospital services be any different?

    We have been seduced by the idea that private competition in health care is a good idea instead of public accountability and cooperation. We
    have allowed profit-seeking and business ethics to supplant public service and medical ethics. It is time for a publicly accountable health system without winners and losers.
    The current single payer Medicare for All bills in front of Congress assume that hospitals would be paid via publicly approved operating budgets and capital budgets for buildings, expensive programs, and equipment. This would put an end to the "edifice complex" we see afflicting our health care system. It would put an end to the ridiculous spending on 5 star hotel lobbies in hospitals and duplicative expensive technology and programs. It would put an end to narrow networks and surprise billing. Surprise!, there would be no billing needed at all. The simplicity and stability of hospitals funded by publicly accountable capital and operating budgets would have made it possible to easily support hospitals and assure their financial stability during this pandemic or any other emergency local or national. It is those who never look a sick person in the eyes who benefit from the current system. This pandemic should push all caregivers to demand change.
    Irrational Exuberance of Administrative Overhead - Limit CEO Salaries
    Hunasikatti Mahadevappa, MD ,FCCP | Global Health Care Consultant MD PC: FDA, CDRH, Silver Spring, MD
    IRRATIONAL EXUBERANCE OF CEO'S: The Authors state that 'many hospitals have limited liquid assets and may not be capable of absorbing large financial shocks while also mobilizing sufficient resources to respond to the pandemic'. However, many hospitals with healthy assets do spend money on irrational huge salary packages of CEO's. These CEO's have multimillion dollar packages with golden parachute retirements. There should be a salary limit of $400,000, equal to that of the President of USA. These administrative officers should not be getting any more retirement benefits than any nurse working in the hospital.

    VERSUS ADMINISTRATIVE OFFICERS: Most of these CEO's are non-medical, or medical professionals with an MBA, whose skills are only in counting money, budget not human lives. What a travesty of justice is it that society values these CEO's who do not see a single patient, are not subjected to the malpractice epidemic, are worth millions of dollars, vs the physician who takes care. of these patients and are not even worth 80 dollars when they see a patient as 20-30% of times they do not get reimbursed from Health Insurance companies. These are the same physicians/nurses/RT's who have lost their lives in this pandemic.

    National Health Service: It is high time we as a nation have a coherent policy covering all citizens,
    but hospitals that are smaller, independent, rural, and have critical access status are particularly at risk.

    The Views expressed are the personal opinion of the author and should not be construed as the policies of the agency.