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May 6, 2020

YNHH details negative financial impact due to COVID-19

PHOTO | File image Yale New Haven Hospital.
By Michelle Tuccitto Sullo

The coronavirus pandemic has “significantly affected” the Yale New Haven Health system’s financial results for March, according to YNHH management.

YNHH officials cited two principal reasons for the impact. First, the system had to spend significant sums of money to prepare for the influx of COVID-19 patients and care for them once they were admitted. Second, the system has seen a reduced number of patients admitted for non-coronavirus-related care, including elective procedures that are significant revenue-generators for hospital systems nationwide.

Management has previously alluded to the negative financial impact of the crisis, with CEO Marna Borgstrom saying in April, “We kind of threw our budgets out the window a couple of months ago.”

This week, YNHH outlined detailed financial impacts of the coronavirus crisis in an Electronic Municipal Market Access (EMMA) report dated May 4.

“The combination of the COVID-19-related preparation and response efforts and the effects of the pandemic on inpatient and outpatient activities significantly affected the financial results of Yale New Haven Health for March 2020,” the report states.

YNHH suspended or reduced elective surgeries at all of its facilities on March 19. Health system officials have also reported that fewer patients have come in for treatment of conditions such as heart attack and stroke, possibly due to fears about contracting the virus.

The system took several steps to prepare for the influx of patients with coronavirus, including staff redeployment and training, facilities repositioning and cleaning, buying equipment and supplies, and establishing test sites and a command center. These efforts in March alone cost YNHH $14 million in expenses and $4 million in capital costs, for a total of $18 million, according to the report.

The YNHH system saw a “significant reduction” in the amount of non-COVID-19 medical cases and an influx in patients with the disease. In March, all YNHH facility outpatient encounters decreased about 25 percent, and inpatient cases decreased seven percent, when compared to March 2019. 

Revenues declined by approximately six percent in March 2020, compared to March 2019. YNHH reports an unaudited net loss from operations of approximately $71.8 million for the month, as compared to a net gain from operations of $13.3 million in March 2019, the report states.

For the fiscal year, YNHH reports an unaudited net loss from operations of $0.6 million through March 31, 2020. For the same period last year, YNHH had a net gain from operations of $97.9 million, the report shows.

Meanwhile, YNHH has received some $440 million in advanced payments from the Medicare program under the CARES Act, though a portion must be repaid in late 2020. YNHH also received grants under the Provider Relief Fund and related CARES Act of some $87 million, the report shows. These amounts were not included in the system’s operating results, as they hadn’t been received by the end of March.

Also, the federal Department of Health & Human Services has indicated that some $12 billion is going to the nation’s hospitals which have had a high number of coronavirus cases, with another $2 billion to help cover treatment for low-income and uninsured patients. YNHH expects approximately $328 million of this will be divided up among 12 Connecticut hospitals. YNHH expects to receive a “significant portion” of this money in the coming weeks, though the report doesn’t specify exactly how much will go to YNHH system facilities.

As of March 31, on an unaudited basis, YNHH reported total unrestricted cash and investments valued at $2.5 billion.

“The effects of the COVID-19 pandemic will continue to be felt by Yale New Haven Health providers for some time to come,” the report states.

While coronavirus cases seem to be leveling off, there may be waves of virus cases in the future, YNHH officials noted in the report.

As of Tuesday, Gov. Ned Lamont reported that 30,621 state residents had tested positive for COVID-19, and 2,633 have died. 

Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.

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