The Sunshine Economy: COVID-19 And The Hospital Business
When drive-through COVID-19 testing was first offered in Broward County, one of the first was at Cleveland Clinic Florida in Weston. That was five weeks ago.
On Saturday, Gov. Ron DeSantis used the hospital as the backdrop for his daily update on the state of the virus. His visit came as he awaits the task force he convened last week to make recommendations on how to reopen parts of Florida’s economy. His statewide stay-at-home order is due to expire on Thursday. His executive order ban on elective surgeries at hospitals is scheduled to be lifted on May 9. The ban has opened up hospital beds to handle any increase in demand from the virus. It also has led to a sharp drop in hospital revenues across the industry.
At Cleveland Clinic’s hospital in Weston, the governor said in-person sporting events weren’t going to happen in May, and bars and movie theaters would remain closed in any first phase of reopening Florida.
"I'm not in a rush to to do anything," he said. "I would rather do it right."
South Florida hospitals have lost tens of millions of dollars since the state ban on elective surgeries was put in place on March 20. And those hospitals want to reopen while balancing public health.
"It's going to be very important to both from the business and the clinical standpoint," said Jupiter Medical Center CEO Dr. Amit Rastongi. The center is losing $5 to $10 million a month as long as elective surgeries are stopped. "From a business sustainability standpoint, that revenue is going to be important for us to bring back our staff, which has a ripple effect on other parts of the economy."
Two weeks ago, the Jupiter Medical Center announced it was furloughing 50 administrative workers, cutting pay for senior leadership team members by 10 to 20 percent and Rastogi was cutting his salary by 30 percent.
Proposed layoffs in late March at Jackson Health System were put on hold after an outcry from health workers and politicians. Jackson CEO Carlos Migoya said the safety-net health system is losing $25 million a month thanks to higher costs to prepare for COVID-19 and the prohibition on elective surgeries. Jackson usually does about 2,500 surgeries a month. Migoya said future job cuts in the weeks ahead are not off the table.
"We've probably got another three to four weeks before I can make a decision," he said. He's waiting on more federal stimulus money and for the state to allow elective surgeries to restart. Already, Jackson has received $16 million from the first Congressional stimulus. Migoya said the system needs $25 to $40 million more in order for him "to not do any kind of furloughs or anything."
The mortatorium on elective procedures has been successful in keeping hospital beds empty for coronavirus patients. This weekend about 40 percent of the hospital beds throughout the state were vacant. In South Florida, supply runs from about a third of the beds at hospitals in Broward County to 43 percent empty beds in Palm Beach County. About a third of Incentive Care Unit beds are available in South Florida according to the Agency for Health Care Administration. While the empty beds represent a cushion to handle an increase in COVID-19 hospitalizations, they also represent a drop in the business of healthcare.
The ban on elective procedures may be among the first business restrictions lifted. Just how Florida hospitals could restart a return to normal business isn’t clear. It may not be as simple as lifting the ban, especially in South Florida which has a majority of the COVID-19 infections in the state.
"We're being very selective," said Broward Memorial Health CEO Aurelio Fernandez. "We're not proposing to do, for example, hernia repairs or bariatric surgeries. As you open up the services in the hospital, you don't want to utilize your patient beds in the event of a surge."
It could be a phased reopening, or limited reopening, or a restricted restart of some procedures at some locations.
We are now running at a rate of $25 million a month loss. - Jackson Health System CEO Carlos Migoya
I'm sure that there is a way that we can go back to doing appropriate work for people in a very, very safe way," said Bo Boulenger, chief operating officer at Baptist Health South Florida, the largest hospital system in the region. "We've got a number of freestanding outpatient diagnostic and ambulatory surgery centers and those would be the ideal places to begin to see how we might get back to taking care of patients."
No doubt there is demand after a six-week ban, but how fast patients may return when surgeries return is unknown. A Cleveland Clinic study in Ohio found a 38 percent drop in patients with heart attack and stroke symptons at its facilities. Cleveland Clinic Florida CEO Dr. Wael Barsoum experienced a similar drop in South Florida. "Our volumes for cardiac care has also dropped off. So I suspect that the same thing is happening here in southeast Florida. But I think that this is an unintended consequence of trying to do the right thing and ensure that we have enough hospital beds available to treat Corona virus patients."
At Jupiter Medical Center, Dr. Rastogi thinks patients will be cautious to return. "Initially, a lot of the medical community thought that once the executive order is lifted and things are safe to proceed, the volume is going to come back immediately," he said. "But if you look at across the industries, many of the polls are showing that even once the restaurants are open or once the airlines are flying all the time, the vast majority of the people are afraid to still visit any of those institutions. I think in health care, that's going to be similar."