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CARES Act funding not enough UAHS says

Posted on: 05/01/2020

“Upper Allegheny Health System management has serious concerns about its finances as a direct result of the negative financial impact of the COVID 19 pandemic,” said Jeff Zewe, RN, president and CEO. “The COVID-19 crisis has triggered lost revenues and higher expenses, resulting in a projected loss of $23.5 million for 2020 for the system, which includes Olean General Hospital and Bradford Regional Medical Center. “The loss of business due to cancellation of elective surgeries, taking services off line and a drop of between 50 and 80 percent in patient activity across OGH and BRMC has put us, like all rural hospitals, in a precarious financial position,” Zewe said.

In early April, the federal government announced it was making $50 billion (of the initial $100 billion) available to hospitals across the country under the CARES Act to assist in managing through the pandemic. At this point, UAHS has received approximately $3.6 million in grants against its $23.5 million projected loss. Unfortunately it is not nearly enough, Zewe said.

“March losses totaled $3 million and April’s projected loss is $6.5 million. Although the last 10 days have indicated a slight uptick in patient activity, the financial outlook for both hospitals is not good as a result of the pandemic,” said Rick Braun, senior vice president and chief financial officer, UAHS.

“In addition, there are incremental costs of more than $500,000 in April alone associated with preparing for and managing the pandemic and anticipated surge. This includes purchasing equipment and PPE to expand our inpatient capabilities at Olean General Hospital and Bradford Regional Medical Center for the safety of our staff and patients,” Braun said.

Braun explained that to enable the hospitals’ facilities to remain open, the federal government has also provided a loan against future Medicare services but with contingencies attached.

“This $21.5 million loan will have to be repaid over a 12 month period starting in September 2020. “Clearly this doesn’t work,” Braun said. “UAHS cannot support this level of repayment and it is doubtful many hospitals could. It is critical that more grant funding be secured out of CARES Act funding, which is still to be distributed and/or developed through future legislation,” Braun said.

“We need our government officials to support our efforts through additional grant funding that recognizes the fragility of rural hospitals across the nation and our inability to absorb these losses,” Zewe said. “Hospitals have stepped up and done everything necessary to protect the public. Now it is time for the government to step up and protect the hospitals.”

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