COVID report: Pa. hospitals suffered heavy losses; still contributed to economy

Listen to this article

Pennsylvania hospitals lost $8.1 billion during the COVID-19 pandemic but continued to provide economic value to the state. 

A report by the Pennsylvania Health Care Cost Containment Council (PHC4) in collaboration with The Hospital and Healthsystem Association of Pennsylvania (HAP) shows of the expenses and lost revenue reported, the largest expense was staffing which amounted to $1.3 billion. 

At the same time, the report shows that in fiscal year 2022, hospitals provided an economic value of $182 billion in spending, an increase of $39 billion from before the pandemic in fiscal year 2019. 

PHC4 and HAP said the report, COVID-19, The Impact on Health Care in Pennsylvania, the first joint effort by the two organizations, examines how the coronavirus pandemic affected and changed Pennsylvania and its health care system. 

“PHC4 hopes this statistical representation of the coronavirus pandemic found in this summary gives stakeholders the opportunity to learn from this experience,” said PHC4 Executive Director Barry D. Buckingham. 

The report examines how Pennsylvania hospitals responded to the pandemic and the challenges they continue to experience. 

“Throughout the pandemic, Pennsylvania hospitals stepped up as leaders to care for and protect their communities,” HAP President and CEO Nicole Stallings said. “In its wake, hospitals continue to navigate persistent challenges, including a health care workforce shortage and threats to financial stability.” 

Staffing expenses  

The staffing expenses include COVID-19 related increased staffing and labor costs (salaries and benefits), expenses related to acquiring additional staff resources to expand or preserve care delivery, and staffing emergency operation centers. 

The staffing expenses include COVID-19 provider and staff training, like training on pandemic preparedness plans and the use of telemedicine, were also included, PHC4 said.  

Those expenses have left 39% of the state’s hospitals in the red and 13% with operating margins of less than 4%, Stallings said. 

Hospitalizations 

Other key findings show the overall hospitalization rate was 196.7 COVID-19 hospitalizations per 10,000 Pennsylvania residents from March 2020 through December 2022. 

Lehigh Valley had the highest incidence rates with 31,081 cases/100,000 population, which is followed by Altoona/Johnstown, North Central, South Central, and Southwest, which all had incidence rates higher than 29,000 per 100,000 residents.  

Northeast and Northwest had lower rates, followed by Southeast with the lowest rate of 24,632 incidents per 100,000 residents.  

There were two prominent spikes in the number of monthly COVID-19 hospitalizations in Pennsylvania. The first spike occurred in December 2020 at 24,506 hospitalizations. The volume was highest in the second spike, which occurred in January 2022, at 26,206 hospitalizations. 

The report shows rates were statistically higher for older residents, especially ages 45 and older, male residents, black (non-Hispanic) residents, and residents living in areas where 10% or more of the population lives in poverty. 

The overall in-hospital mortality rate was 11.0%. Mortality rates were statistically higher for older patients, especially ages 65 and older, male patients, white (non-Hispanic) patients, and patients living in areas where 10% to less than 25% of the populations lives in poverty. 

The report shows the pandemic intensified workforce shortages throughout the health care sector with hospitals reporting average statewide vacancy rates of more than 30% at the end of 2022 for key clinical positions, including registered nurses, nursing support staff, and medical assistants. 

Community benefits 

Despite the challenges of the pandemic, Pennsylvania hospitals reported about $9 billion in community benefits during fiscal year 2022 and, both directly and through ripple effects, supported $182 billion in economic impact and 590,000 jobs.  

During that time, when the number of Pennsylvanians hospitalized for COVID-19 reached its highest peak, hospitals’ provided community benefits that included enhancing community health, providing charity care to patients in need, training and educating the next generation of health care professionals, conducting medical research, operating services at a loss to meet community needs, and absorbing costs associated with caring for millions of Pennsylvanians covered by Medicare and Medicaid.  

During the pandemic, hospitals increased their impact on their communities’ economies by maintaining and constructing new buildings; providing jobs; and purchasing medical supplies, pharmaceuticals, and medical equipment, the report said.  

They also continued to indirectly impact the economy through business interactions with organizations from other industries, such as employment and cleaning services, and induced economic activity outside of the hospital in such industries as real estate, financial investment firms, and restaurants.  

And they continued to attract federal research dollars to the state, enabling Pennsylvania to develop innovations that improve care, the report said.  

During a conference call to release the report, Stallings said while the pandemic took a toll on the health care system, there were bright spots. 

“The workforce responded in remarkable ways. They were innovative and tried new things which can be carried forward,” she said. “Telehealth is a key tool and team-based care will be vital to the continuation of care in communities.” 

Hospitals also played a crucial role in COVID-19 vaccination efforts, distributing more than 80% of vaccines during each of the first four weeks of the initial rollout.  

HAP said in lieu of a public hospital system, Pennsylvania’s hospitals and health systems provide public health infrastructure; coordinate emergency preparation, management, and response; address community health needs; and serve as safety net health care providers.  

In its report, HAP said they exhibited a remarkable example of this role during the COVID-19 pandemic. The COVID-19 vaccine rollout was a vast undertaking for Pennsylvania’s hospitals and health systems as they worked to immunize the public based on state and federal guidelines.  

This included ensuring efficient appointment scheduling and keeping shots at the required refrigeration storage temperatures, which required additional staffing and medical equipment. 

“Hospitals provided the services needed to make sure the communities and neighborhoods they serve thrived,” Stallings said.