KY legislators should not add to hospitals’ financial burdens as they fight COVID-19

The COVID-19 pandemic continues to inflict suffering and create difficulties across Kentucky and the nation.

The virus is present in all 120 Kentucky counties, and has sickened or claimed the lives of our fellow Kentuckians. In addition to the health crisis, individuals, families and businesses, including hospitals, are bearing the economic brunt of the shutdown the disease has caused.

A recent report from the Kentucky Hospital Association reveals what a profound effect COVID-19 is having on the state’s hospitals and the thousands of health care professionals and caregivers who are on the front lines of the battle against the virus.

The financial impact is staggering: COVID-19 will cost Kentucky hospitals an estimated $2.6 billion in 2020. Hospitals face reduced revenue resulting from the mandatory cancellation of elective procedures, which are medically necessary procedures that can be safely delayed. The cancellation also resulted in furloughs for thousands of hospital employees. There are mandated limitations on how many patients hospitals may admit and lower patient volume resulting from patients avoiding the hospital because of fear of the virus.

While revenue is declining, hospitals’ costs have grown to treat COVID-19 patients. Hospitals have purchased more personal protective equipment, instituted environmental controls and faced the added cost of testing and treating COVID-19 patients who are hospitalized twice as long at a higher cost than average patients.

Although the federal government provided crucial financial assistance, it covered less than half of the total amount of the losses and increased costs our hospitals are experiencing.

Kentucky hospitals’ contributions to their communities’ economic health is well documented. With more than 78,000 employees statewide, hospitals pay $4.9 billion in wages annually and, along with their employees, spend $3.3 billion a year on purchases in their communities. Hospitals’ and their employees’ support for government comes through $700 million in annual state and local taxes, including $183 million in provider taxes paid by hospitals to support the Medicaid program. We cannot afford for them to fail.

As Kentucky works to address the reality of the pandemic’s effect on state revenue, it is important that policymakers support our hospitals and the people who work for them. This request for support is not for more funding or special treatment. Instead, Kentucky’s hospitals ask that efforts by the Governor and General Assembly to address the reduced revenue caused by the pandemic do not compound hospitals’ financial crises by imposing additional provider taxes, cutting Medicaid reimbursement or similar actions.

State, national and international health experts continue to tell us that the pandemic is far from over, and a resurgence of the virus is to be expected. Continuing the battle against COVID-19 and providing quality care for patients make it essential that Kentucky’s hospitals are financially strong.

Addressing the Commonwealth’s budget problems should not come at the expense of Kentucky’s hospitals and the people who care for our citizens.

Nancy Galvagni is president of the Kentucky Hospital Association, a group that represents hospitals, related health care organizations and integrated health care systems.