IOWA CITY — Coronavirus-related losses across the University of Iowa Health Care system could top $100 million by the end of its budget year next month — and next year could be worse.
Leaders of Iowa’s largest academic medical center announced the bleak financial picture this week as UIHC continues to make its response to the COVID-19 pandemic a priority.
Administrators said they are considering “everything” to blunt the blow on the top-ranked 811-bed hospital that employs more than 924 physicians and dentists, more than 2,445 nurses, and more than 10,224 support staffers.
Measures on the table include forgoing raises, temporarily cutting pay, eliminating open positions, delaying recruitment, strategizing vacation-time use, postponing maintenance, reassessing pharmaceutical supply chains and scanning purchasing practices for potential savings, UIHC Chief Executive Officer Suresh Gunasekaran said Wednesday.
There are no plans now for layoffs. But, he conceded, “Every reasonable business has to look at their staffing.”
“We feel very, very strongly that layoffs should be the last option,” he said, noting that only a few months ago the hospital campus was at 90 percent occupancy with revenue and operating income above budget.
UIHC administrators in
February reported an operating margin of 6.2 percent, nearly double the 3.3 percent budgeted.
“We know that Iowans depend on us, and we know that there will be a return to the community and patients depending on us,” Gunasekaran said. “So the last thing we want to do is look at layoffs. But, unfortunately, if this crisis continues for months and years, then that would have to be on the table.”
Of course, UIHC is not alone — with hospitals and health care providers nationally facing unprecedented challenges and losses as they scramble to respond to the coronavirus pandemic.
The United States has seen more than 1.5 million infections and 92,700 virus-related deaths.
In response, the federal government has approved trillions in relief. So far, UIHC has received about $35 million, Gunasekaran said, noting, “Every bit of funding we get from everywhere is absolutely helpful.” But, “in the magnitude of this, $35 million out of $100 (million) still leaves a pretty significant loss.”
In April alone, UIHC lost about $22 million from its extra COVID-19 expenses and its revenue losses — driven largely by fewer visits to its main campus and clinics, with patient fears compounding curtailed elective surgeries.
‘One of the safest
places’ in Iowa
That degree of monthly loss could continue unless UIHC sees improvement, including patients overcoming those fears to seek their medical treatment there.
“We are open for business,” Gunasekaran said. “This might actually be the easiest for you to get into University of Iowa Health Care that you’ve ever experienced.”
With widespread health safety measures in place — from entrance screenings to mandatory employee face-shield use — Gunasekaran urged, “We really made the place safe.”
“Honestly, our hospital has to be one of the safest places in the entire state,” he said.
That many Iowans have delayed seeking health care makes sense, given the months of social-distancing admonitions, he said.
“Now to convince folks that it’s OK to come back and use the health care system is taking time,” he said.
Because UIHC finances were strong before COVID-19 began to take its toll, Gunasekaran said the administration is hoping to break even this budget year, at best.
The next budget year, which starts July 1, is expected to be worse.
“The reason we’re talking to the staff about all the options being on the table is it’s the responsible thing to do when you’re staring at this kind of a potential loss,” he said. “It’s really important for us, in our culture, to talk to everyone about it and make sure we’re all rowing in the same direction.”
Bright spot: increased
use of telemedicine
And not all the news is so dour, as Gunasekaran said COVID-19 has forced the system to find fast efficiencies and ramp up improvements. Consider the explosion of telemedicine, saving patient and provider time and money in some cases.
“Telemedicine is one of the tremendous bright spots across our organization,” he said.
Where UIHC telehealth visits were in the tens to hundreds before, they now are in the thousands — with UIHC providers so far this year providing 13,845 telehealth screenings for flu-like symptoms, including 91 just on Tuesday.
“I think this really is the future,” Gunasekaran said. “I don’t think that telemedicine is a substitute for in-person care. But it’s a complete enhancement to in-person care. And what we plan on doing at UI Health is making it a regular part of our toolbox of working with patients.”
UIHC was the first in Iowa to offer the promising drug Remdesivir, first to offer home COVID-19 care and the first to start plasma therapy.
And UIHC has seen some COVID-19-related positives in recent days, with its Chief Medical Officer Theresa Brennan this week reporting downward trends in hospitalized patients, symptomatic patients needing tests and coronavirus positives among those being tested.
As of Tuesday, the most current data available, UIHC had 13 adult COVID-19 patients, down from a peak of 37 on April 2, according to Brennan. Its percent of positive COVID-19 tests also has “decreased significantly,” she said, dropping from a high of 31 percent on April 9 to 2 percent this week.
The UI Stead Family Children’s Hospital currently has two pediatric COVID-19 inpatients, for a total of six so far, and has not seen any cases of multisystem inflammatory disorder — a rare syndrome that’s been reported in children and adolescents nationally and recently in Iowa.
Potential resurgence reason for care now
As the state continues to ease restrictions on businesses and activities — prompting Iowans to schedule haircuts, visit restaurants and go shopping — Gunasekaran said the hospital is preparing for a potential virus resurgence.
This could become especially important considering that the UI plans to return students, faculty and staff to campus in the fall.
“We’ve planned for it in operational ways and financial ways,” he said.
Additionally, Gunasekaran said, UIHC system supports state efforts to expand testing and contact tracing.
“We would like to make sure that’s something that’s a tool in our tool belt that’s a little bit more robust as we move forward,” he said.
The potential for a resurgence, he said, is why people in need of other health care should come in to UIHC now.
“If you are a patient, if you are older, if you are a parent and you’re thinking about health care for your kids, not knowing when there will be a COVID outbreak is all the more reason why you should get all necessary medical care in a timely manner when you can,” Gunasekaran said.
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