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September 18, 2020

YNHH system anticipates up to $100M net loss due to COVID

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

The Yale New Haven Health system could end its fiscal year with a net loss of up to $100 million because of the impact of the pandemic.

YNHH CEO Marna P. Borgstrom outlined her latest financial estimates during a press briefing Thursday.

“For as long as we have been a system, we have not run a deficit and have been very conservative fiscal managers,” Borgstrom said. “We all took a hit this year, and it was an unprecedented year, but we are tough and will come back stronger.” 

The health system’s fiscal year runs through the end of the month, and Borgstrom said the numbers are “still a work in progress.”

Borgstrom expects the health system will lose $450 million from operations for the fiscal year. However, much of this is being offset from $320 million in federal funding the system received through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Borgstrom cautioned that some of this money will need to be paid back.

Borgstrom said she still doesn’t know what the net loss for the fiscal year will be, but she expects it to be in the range of $70 million to $100 million.

“We had budgeted for an operating gain,” Borgstrom said. “We will end the operating year with a loss, I”m not sure yet how much it will be.” 

To help balance the budget, the system is focused on finding ways to lower costs while still delivering quality care, she added. 

When asked if the health system is considering layoffs to help its financial situation, Borgstrom said, “Right now, layoffs are not part of our plan.”

She said the health system has regular “town hall” style meetings with employees, who would rather “sacrifice a little bit and have their colleagues.”

The health system suffered financially for multiple reasons, such as the cost of personal protective equipment, the delay of procedures, and because patients stayed away due to virus fears. 

This past spring, the health system delayed construction on its planned new $838 million, 505,000-square-foot neuroscience center and expansion project at its St. Raphael campus, due to the pandemic’s financial impact. 

Borgstrom on Thursday said the health system remains committed to the project, but she didn’t have any firm revised timeline for its completion. It may need to be done in phases, she said.

In spite of the financial figures, Borgstrom remained optimistic about the next fiscal year.

Today, inpatient volumes have come back, and the emergency rooms are back to being overwhelmed, according to Borgstrom. She said outpatient volume is still “softer,” which she attributed to some people still being uncomfortable with getting care they don’t think is absolutely necessary.

As of Thursday, there were 18 COVID in-patients being treated in the Yale New Haven Health system. This included 13 at Yale New Haven Hospital, three at Bridgeport Hospital and two at Greenwich Hospital, according to Borgstrom. 

“We are fully aware there could be a second wave, and peaks and valleys of the virus,” Borgstrom said. “I’m not going to say this is over, but the press of (COVID) patient demand has been abated.”

Thomas Balcezak, MD, executive vice president and chief clinical officer for the health system, provided reassurances about the safety of seeking care.

“We are taking many steps to keep patients safe, so go ahead and get the care you need.”

Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.

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