Hospitals’ forecast for the second half of 2021 is full of uncertainties, thanks to the unvaccinated and the fast spreading Delta variant.
The unvaccinated impact stretches across all areas of a hospitals’ balance sheets and will likely hurt margins in the near- and medium-term.
The expectation for the year was that vaccines were going to lead us into a normal financial period, but then, the unvaccinated sent us for another crisis!
With hospitalizations quickly rising and ICUs filling due to unvaccinated COVID cases, expenses are up as demand for staff is outpaces supply. Hospitals are paying lot’s of overtime, bonuses and bringing expensive travel nurses!
- The burn rate for supplies needed to treat COVID patients is also high, at a time when costs are surging
- At the same time, elective surgeries and other care — which help bring in revenue — are being postponed.
Hospitals are having a similar COVID impact without the expectation of any stimulus dollars coming that will make the years’ end very difficult. But many hospitals still have strong balance sheets due to market returns and federal bailout money that will give them some cushion to ride this out.
While hospitals aren’t yet expecting additional federal help, they are among the largest employer and economic drivers in many congressional districts. When hospitals ask for relief from lawmakers, they typically get it. Watch for:
- The trends over the next few weeks with the return to school.
- Whether the U.S. may follow a similar path with Delta to countries like the U.K. and India, where cases began to quickly drop after massive spikes.
