AHA: Hospitals could lose $122 billion in 2021

Hospitals and health systems are facing billions in lost revenue in 2021, even under the most optimistic scenarios, according to a recent report released by the AHA.

Compared to pre-pandemic levels, total hospital revenue in 2021 is projected to be down between $53 billion and $122 billion, depending on the trajectory of the pandemic, vaccine distribution, and recovery of patient volumes.

In addition, hospitals and health systems may continue to face higher costs due to the pandemic. Compared to previous years, in 2020 hospitals and health systems saw drug expenses rise 17%, likely due to the increased severity of novel coronavirus (COVID-19) patients. Purchased service expenses, including environmental services and increased sterilization, rose 16%. Contract labor, hazard pay, and other workforce expenses drove labor expenses up 14%.

Organizations should prepare for a variety of financial outcomes and review contingency and emergency plans. Careful monitoring of finances and internal processes to ensure billing and reimbursement compliance will be essential to protecting revenue.