Overhead Costs Loom Over Wyoming Hospitals That Sit Empty

May 22, 2020

Hospital finances around the nation have been hit hard during the COVID-19 pandemic. This includes Wyoming hospitals as they had to stop providing the non-essential services that make up a huge percentage of their revenue for a period of time. Wyoming Public Radio's Kamila Kudelska spoke with the president of the Wyoming Hospital Association Eric Boley on the situation in our state.

Eric Boley: They tried to and they needed to keep staff in key roles. But when you see a decrease in your revenue of up to 60 percent, even 70 percent in some cases, you've got physicians that are used to seeing patients, but the patients aren't coming to the clinics. They aren't utilized in the emergency room. So you've got a lot of people that are relying on that revenue for their income. And then on top of that we saw an increase in the cost for supplies, personal protective equipment supplies, significantly increased because there was a shortage and then we were having to go to different markets to find that and we were paying five to 10 times higher for masks and other equipment. But I think most importantly, we realize how important our hospital staff members are to us and, and their livelihood and the ability for us to recruit and retain staff just put a tremendous burden on them. And then hospitals have huge fixed overhead costs, expensive equipment and other things that have to be used to be paid for. And when you're not doing elective procedures, you're not doing surgeries. You're not doing diagnostic testing with your medical imaging equipment. And you're not seeing the volume of patients. It couldn't have been a tougher situation.

Kamila Kudelska: Right. So how were Wyoming hospitals particularly hit by this that was different from hospitals in New York that actually had COVID-19 surges?

EB: In New York their hospitals were full to overflowing with coronavirus patients. And while it was difficult for them, and they were facing different challenges, at least they knew they had patients that were in their hospitals and that they were going to be paid for the treatment of those patients because the federal government told us that they'd pay for all those. In Wyoming, we've had very few hospitalizations and I would venture to guess that maybe only seven of our hospitals have even had a COVID patient in them. But then you've got your other hospitals, your small critical access hospitals that really rely on the outpatient surgeries and the diagnostic testing and sustainable volume of patients. And they were already in a very difficult financial situation, some of them already had to cut their revenue by 40, 50, 60 percent.... It was a totally different situation than what they're facing in New York and I don't know which one's worse or which one's better. New York is facing a huge death toll with their patients and their overflowing whereas we've got hospitals that are basically sitting empty, with huge overhead costs and no patients. So just almost the exact opposite of what we saw in some of the areas that were really hit heavily with coronavirus.

KK: Are you able to say which Wyoming hospitals were most affected by this?

EB: They've been affected in different ways. We've had large outbreaks in Fremont County. Wyoming Medical Center and Natrona County right now and WBI [Wyoming Behavioral Institute] are facing what looks like a surge right now so they're treating coronavirus patients. Teton County was another area that was really heavily hit and that hospital had to take care of quite a few COVID patients. And then here in Cheyenne, Cheyenne regional, again, we had hospitalizations. So from treating the patients those are probably the four most heavily hit areas. But on the flip side, when you got I would say some of our smaller critical access hospitals have really been impacted more negatively as far as the financial side of things because they had very thin margins, if any existing margins going into this and then when you factor in that they don't have any revenue coming in, I think that they faced other really difficult challenges that maybe some of the others don't. The nice thing is we've received some of the CARES funding from the federal government. And up until that arrived, I was concerned that some of our hospitals were going to fail. And we're going to have to close some of them. We were really considering some really drastic cuts, closing their emergency room and other services because they just couldn't afford to keep them open.

KK: So it sounds like the CARES Act is actually helping hospitals.

EB: In the last distribution of CARES funding that came out to the states, there was a pot of money that went to rural areas specifically, and that was probably the most significant. It impacted all but two of our hospitals in the state and brought in relief that without it, I'm sure they would have failed.

KK: So at least for now, all hospitals will be able to stay open?

EB: I think a lot of it has to do with what happens going forward, depending on what happens in our state with COVID. If we continue to see an escalation, if we continue to see more cases, if it takes longer for the economy to open up, or if we see a resurgence of it in the fall. There are a lot of considerations out there that not just our state, but all the hospitals and in every state are trying to figure out what the future looks like.

KK: Right. So what do you think the future looks like?

EB: Everyone, I think was kind of hopeful that if we flatten the curve, and if we did everything that we needed to keep the hospitals from being overrun with coronavirus patients, that everything would be okay. And I do think that what we've done within the state has worked. But now that we're reopening, we've seen a couple of nursing homes in the state with COVID cases this week, we didn't have any confirmed cases of coronavirus in any of our nursing homes. A lot of people were predicting that there will be another round of COVID in the fall. A lot of it's going to have to do with how people adhere to directives. If they wear their face masks, if they do their social distancing, but the stockpiles [of supplies] are growing and we're going to have better access to supplies. But if we have to continue to curtail all the business, the business side of things, I have some fears about how long hospitals can maintain, doing business the way that everyone expects them to and is used to them doing in all the different communities in our state.

Have a question about this story? Contact the reporter, Kamila Kudelska, at kkudelsk@uwyo.edu.