Since the coronavirus pandemic began, Americans have been presented with a series of harrowing portraits of a health care system thrown into chaos. First, there were the awful hypotheticals sketched by epidemiologists: hospitals overwhelmed, halls crammed with the desperately sick, doctors forced to decide whose lives were most worth saving. Then came the real-life chaos as the wave of infections began to crest in hot spots like New York City: nurses breaking down over trying to treat dozens of dying patients at once; corpses being forklifted into refrigerated trucks and buried in mass graves.
With evidence mounting that daily deaths are trending downward in some of the hardest-hit locations, there’s reason to hope that the worst is nearing its end. But we’re only just beginning to see the presence of a second, quieter crisis roiling our health care system, an economic disaster brought on by anti-COVID measures that has pushed untold numbers of doctors and practices to the brink of insolvency.
The hospitals bearing the brunt of America’s COVID-19 treatment have had to deal with several types of shortages over the last month: manpower, test kits, protective equipment. What’s been less of a struggle is money. The federal government has committed huge sums of money to ensure hospitals are adequately reimbursed for every COVID patient they treat. Meanwhile, the rest of the nation’s hospitals have felt the financial squeeze, as they sit mostly idle following a mad scramble to prepare for the possibility they were about to become COVID triage centers. According to first-quarter GDP numbers released yesterday, cratering spending in the health care industry accounted for nearly half of the economy’s 4.8 percent GDP shrinkage.
Take Michigan. In the early days of the coronavirus crisis, Gov. Gretchen Whitmer moved fast to shore up the state’s COVID readiness. Among the steps she took: a March 20 executive order temporarily postponing all non-essential medical procedures. As Detroit began to develop into a major coronavirus hotspot, Whitmer’s aggressiveness seemed prescient. As the weeks dragged on, however, some of the hospitals in more lightly affected areas began to sound the alarm that they were bleeding out financially.
Yesterday, the CEO of Hillsdale Hospital, a small-town hospital in southern Michigan, penned a letter to Whitmer laying out the dire situation: If elective surgeries were not allowed to resume, many of the state’s rural hospitals would likely be forced to shut down permanently within just a few months.
That CEO, JJ Hodshire, told The Dispatch that the loss of elective surgeries was starving his hospital of one of the few profitable services on an already tight balance sheet. As a small hospital, Hillsdale Hospital lacks substantial bargaining power and thus is largely at the mercy of the procedure rates stipulated by insurance providers even in good times. This means it relies on elective procedures like joint replacements to stay in the black.
“We operate on a shoestring budget,” he said. “We have struggled like the rest of rural American health care. We’ve had some losses year after year, but we understand the importance as a community need, as a not-for-profit hospital, that we need to engage in this, because we know that if there’s no local hospital, people die. When your hospitals close, access to care is now limited to a 30, 40, 50 minute drive. And when you’re talking about heart attacks, you’re talking about strokes, every minute counts.”
When Whitmer’s order first came out, Hodshire said, his hospital scrambled to make a plan to prepare for a possible COVID spike, and also to weather a lengthy loss of revenue—a plan that meant laying off 15 percent of the hospital’s workforce. That number has now grown to 20 percent, and will grow higher if elective surgeries do not resume. Even if they were to resume right away, the hospital would still be looking at about a $10 million hole in its budget, which federal aid has defrayed only partially.
“It’s going to have grave consequences for many hospitals around Michigan, because we cannot dip that far into our cash reserves to sustain the model without significant mass layoffs beyond the ones I’ve already done,” Hodshire said. “When you think of Hillsdale, it’s not shopping malls and great cuisine and those type of things. It’s very difficult to recruit physicians to this community. And so if I go shredding their contracts and laying off physicians, it’s counterproductive to our operations, because those physicians will leave. And then I won’t be able to have physicians here to engage in the activity.”
As the crisis has dragged on without COVID cases spiking in his area, Hodshire said he has had a hard time justifying the freeze to people clamoring for the banned surgeries who can’t afford to wait.
“We get calls all the time: ‘When are you starting them up? We need to do this—my insurance is ready to run out, because I lost my job and it’s only good to the end of the month. Can I get that surgery?’” he said. “Well, no, sorry. ‘Why?’ The governor said we can’t. ‘But I heard you have no COVID patients, you have one.’ Yep, that’s true.”
“It’s hard to explain that when someone needs care.”
If small hospitals have it bad, many private practices have it even worse. The coronavirus crisis has put a near-total freeze on America’s use of preventative medicine. Some states have closed dentist offices, and where they are open, people often opt to cancel appointments rather than venture into an office and risk virus infection. Same with well-care visits to family practitioners.
“Number one, nobody’s coming to the office,” Dr. Helen Barold, a private-practice cardiologist in Bethesda, Maryland, told The Dispatch. “We’re probably 20 percent of what we were at the most—probably less than that. … None of the private practice doctors are taking a salary that I know of. We’re all just not taking salary at all.”
Instead of her ordinary work, Dr. Barold has found herself transformed into a remote aide to help her regular patients navigate the coronavirus crisis—work that now occupies the bulk of her time but is largely unpaid. Making matters worse is the fact that the CARES Act set aside no special dispensation for private practices like hers—to qualify for government assistance, she has been forced to dive into the same depleted PPP loan program serving millions of other small businesses in America. She applied for a loan last week, but has yet to hear anything back.
“You know, I’m a doctor. I don’t know anything about that kind of stuff. Nobody said to us, ‘You should be applying for this immediately,’” she said. “I called my congressperson yesterday… They’re like, ‘Yeah, we can’t help you.’ But they did listen to me cry for 20 minutes about the fact that, of all the people, Shake Shack, Harvard, Mercedes, they do not need this. I feel like we need a TBA: Tiny Business Administration.”
If Congress replenishes the PPP fund and Dr. Barold’s loan goes through, it will buy her a couple months’ grace: the loan rules permit her to put the money intended to pay her own salary toward her practice’s lease instead. If it doesn’t, she’ll be faced with an impossible choice: spending down her own life savings just to get her staff through a couple more uncertain months or closing up shop on the practice that has been the pride of her career.
“You know, I talked to my lawyer yesterday: Hey, what if I go bankrupt?” she said. “Is my house going to go? If I decide I’m going to go bankrupt, and I can’t pay my lease anymore, and I’ve got to give my practice up—how much can they take from me?”
“This is a practice I built myself. I started from scratch, I started from zero patients. I walked in, I opened the door one day and said, ‘I am here.’ … And, you know, I saved so many lives! And it’s just gone to shit.”
Photograph by Shawn Patrick Ouellette/Portland Portland Press Herald/Getty Images.
Please note that we at The Dispatch hold ourselves, our work, and our commenters to a higher standard than other places on the internet. We welcome comments that foster genuine debate or discussion—including comments critical of us or our work—but responses that include ad hominem attacks on fellow Dispatch members or are intended to stoke fear and anger may be moderated.
With your membership, you only have the ability to comment on The Morning Dispatch articles. Consider upgrading to join the conversation everywhere.