Cash reserves plummet across US healthcare system
Published: Nov 16, 2022
Updated: Nov 17, 2022
Ran across this eye-opening article yesterday: Health system cash reserves plummet.
- “Cash reserves, an important indicator of financial stability, are dropping for hospitals and health systems across the U.S.”
- “Rising labor and supply costs” plus low reimbursement are impacting “large and small health systems.”
- But “Smaller hospitals and health systems are in a more dire situation”
- Some hospitals have less than 3 months of cash on hand.
- “Lost elective procedures” via the pandemic play a role.
In an open letter to Gavin Newsom, Gary Herbst, CEO of Kaweah Health, said “The COVID-19 pandemic, and its aftermath, have brought District hospitals to the brink of financial collapse. Without your help, it will soon be virtually impossible for Medi-Cal patients to receive anything but emergency medical care in the State of California.”
“Herbst pointed to the repeated closure of elective surgeries and procedures by the state as one of the factors leading to the financial crisis, as well as rising inflation and increasing reliance on travel nurses.” (Source.)
And apparently, 1/3 of hospitals are losing money.
It’s ironic that the lockdowns, instituted – in part – to prevent the U.S. healthcare infrastructure from collapsing, may wind up contributing to the ruin of significant parts of it.
It’s also ironic that lack of nurses leads to having to hire pricey travel nurses, which contributes to the need to layoff staff.
And, more bailouts, depending on the circumstances, may spark more inflation, leading to more requests for bailouts . . .