State hospitals seek financial help from state after COVID

Published 7:30 am Wednesday, February 8, 2023

Healthcare officials around the state are now predicting nearly 15 Alabama hospitals are in danger of closing as a result of a loss in finances due to the COVID-19 pandemic. As a result, officials are hopeful the state will provide relief money to meet payroll as the cost of labor has increased.

“The situation is dire. It’s immediate. There’s an immediate need. We hope the State Legislature considers the fragile state of where we are soon,” Alabama Hospital Association and Bibb Medical Center CEO Joseph Marchant said.

Despite the difficulties, Andalusia Health continues to provide the highest levels of care to the local communities with successful hiring of staffing, according to Interim CEO Rob Marshall.

“We believe that with the focus on the patient experience as priority, other certain metrics and financial aspects will fall in line. We are challenged every day to perform and spend with our means. We continually strive to find new and better ways to serve our patients and physicians. Through all the recent challenges, we still have managed to be award several highly regarded accreditations including accreditation from The Joint Commission, Heart Failure, and Chest Pain,” he said.

Marshall added that Andalusia Health has recruited physicians from multiple specialties to this community.

“All of this has occurred while responding to the COVID pandemic, supply chain issues, and increased staffing expenses. We will strive to continue to provide the highest quality care to our community by hiring the best caregivers. We look forward to the challenges in an ever-changing environment. We want the community to continue to trust us with their care.”

According to a recent report, Alabama hospitals earned billions of dollars less in 2022 than they did prior to the beginning of the pandemic in early 2020. Healthcare leaders voiced their concerns last week about the need for additional COVID relief funds from the Legislature in order to make payroll and for some to avoid closure.

Alabama Hospital Association Head Dr. Donald Williamson said in a press conference that hospitals in the state face an existential crisis in terms of survival.

“There are 15 or so hospitals in the state that are in immediate risk of closure. Without help, several will likely close over the next year or two. Relief funds would only be a short-term solution. We need that bridge and need those funds, so we can keep our hospitals open.”

A report provided by Kaufman Hall stated that hospitals received federal funding during the pandemic to help offset losses but still saw income decline by $1.5 billion from 2019 to 2022. The report indicated the decline would have been approximately $2.4 billion, were it not for the federal funds.

Hospitals in both rural and urban areas have been affected. Last year was the worst for Alabama hospitals since the start of the pandemic. Many factors were attributed to the increase of expenses, but the largest was cost of labor, up nearly $1.4 billion. The report said that patients being seen are now often sicker and have a longer stay in the hospital, leading to additional expenses without a comparable increase in revenue.

Kaufman Hall did a similar study in September 2022 detailing the ongoing situation in hospitals nationwide. Alabama’s hospitals are seeing similar issues to those across the country but have a worse situation than the national average.