New AHA analysis examines effect of COVID-19 on hospital margins

Editor's Note

A new analysis prepared for the American Hospital Association (AHA) by Kaufman, Hall & Associates LLC examines COVID-19’s financial effects on hospitals and healthcare systems.

The analysis, released July 21, finds that without further government support, hospital margins in the second half of 2020 could fall to -7%, with half of all hospitals operating in the red.

The analysis also found that without funding from the Coronavirus Aid, Relief and Economic Security Act, hospital margins would have been -15% in the second quarter of 2020. Even with these funds, margins are expected to fall to -3% in the second quarter.

In a scenario that assumes periodic COVID-19 surges, margins could fall to -11%.

As the analysis shows, this pandemic is the greatest financial threat in history for hospitals and healthcare systems and is a serious threat to the future viability of many American hospitals, the report says.