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Hospitals need federal, state help to cover COVID-19 revenue loss

When the reality of the virus hit, we knew we were in a fight that could only be won by working together. We all have to do our part, Oregon’s hospitals especially. So they snapped into action.

Hospitals made sure staff and facilities were ready to receive COVID-19 patients. Surge plans were quickly made ready to activate, just in case. It became clear that a pause on elective procedures made sense. We need the beds for the critically ill, and we need to save precious personal protective equipment for our brave caregivers.   

Hospitals embraced these moves. We are all in this together.

“We pushed as much as we could to have the stay in place order,” said Charlie Tveit, CEO of Lake District Hospital. “It’s vital to slow the surge. We instituted all the recommended changes and activities to limit risk to patients and employees.”

Tveit and Oregon’s other hospital CEO’s knew that these moves would be “bad for business.” Today he has just a handful of patients and has yet to see his first COVID-19 case. That’s OK, he knows this is a public health crisis. But losing up to 60% of his revenue is not a recipe for long-term survival, especially for Lake District and Oregon’s 32 other rural hospitals. Estimates place the losses at $200 million for March alone, and in April hospitals are losing $13 million every day.

Some help is on the way, but it’s not enough. Money from the federal CARES Act is a lifeline, but more is needed. And the funding formula for this relief puts Oregon at a disadvantage compared to other states. Oregon hospitals need a mix of state and federal dollars to survive, so we have asked Governor Brown for $200 million in state funding to ensure that all our hospitals can continue to serve their communities. In the meantime, rural hospitals will try to hang on. Hospitals have provided some support, but the hole is too big. That has led to a painful reality: in the middle of a pandemic, some hospitals have been forced to cut labor costs through staff furloughs and reduced hours.

Oregon’s rural hospitals already operate on a tighter margin than their urban counterparts. For example, Lake District (located 100 miles west of Klamath Falls on the southern edge of the state) depends on local taxes to survive, even in the best of times. “Without that $1 million, we would have a negative margin,” said Tveit. He says the federal dollars will keep him going until June. After that, who knows? He and his fellow hospitals leaders are taking things day by day.

Still, keeping Oregonians healthy is the number one priority. A surge in cases could still come, overwhelming our health care system. That’s why it’s so important that we all keep doing all we can to flatten the curve.

We’re all in this together.