Long Island health care executives say systems face losses of $1B or more

New York State health care systems collectively expect losses of more than $1 billion during the height of the COVID-19 pandemic, hospital executives said this week.

The losses at the not-for-profit health systems are coming from hiring extra staff to treat patients, paying higher prices for hard-to-find personal protective equipment and lost revenue due to the regional ban on elective surgeries, health care officials said.

Health care systems, however, expect a cash infusion from the $2 trillion stimulus package signed by President Donald Trump on March 27, which included $100 billion for hospitals nationwide. Another stimulus bill being hammered out in Congress could bring additional funding to hospital systems.

About $30 billion of the $100 billion has gone to health systems so far, said Kevin Dahill, chief executive at the Nassau-Suffolk Hospital Council, which lobbies on behalf of 23 member hospitals in the region. It's unclear how much of that money came directly to Long Island hospitals.

Some health systems said they've lost hundreds of millions of dollars in revenue because profitable ambulatory offices, which include cancer, cardiovascular and orthopedic practices, have all but stopped seeing patients during the pandemic.

"The financial stress is enormous, as our hospitals have effectively become COVID-19 sites and our ambulatory settings are shuttered," said Dan Widawsky, chief financial officer at NYU Langone, a Manhattan-based health system that operates hospitals in New York City and on Long Island, including NYU Winthrop in Mineola. "Our losses are at $450 million per month. To put that in perspective, that's more than we've earned in a year, with one exception."

NYU Winthrop on March 5 treated the first hospitalized Long Island COVID-19 patient.

New Hyde Park-based Northwell Health, which owns and operates 19 hospitals in the state, including 11 on Long Island, said the pandemic as a whole could lead to losses that top $1 billion for its system. Northwell said it has received $168.7 million in stimulus money.

Widawsky said the cost to his system for personal protective equipment alone has been up to 16 times the normal cost due to demand and because "we've had to source some of it from other vendors. The increased costs are staggering."

Personal protective equipment for health care workers includes gowns, face shields and N95 masks. The federal government provided hundreds of thousands of such items to New York State hospitals, but Gov. Andrew M. Cuomo pressed for more.

Widawsky added that shutting down many of his system's 300 ambulatory offices has cost NYU Langone $250 million in revenue. 

"Those offices are a better option for many patients and ordinarily drives our surplus," he said. "But the expenses for those offices don't go away."

Expenses include leases, and paying staff. "We haven't furloughed anybody, and we continue to pay everyone," Widawsky said.

NYU Langone's four hospitals have seen a 33% reduction in revenue because COVID-19 patients are sicker and stay longer than patients generally do, he added. Some patients stay for more than two weeks.

COVID-19 patients have replaced the more lucrative elective surgery patients, costing hospitals the bulk of their revenue, executives said. Cuomo directed all hospitals in the state to stop performing elective surgeries in March as the pandemic took hold.

Northwell, the largest health system in the state with about 72,000 employees, has spent more than $70 million to have staffing agencies identify and move nurses, respiratory therapists and other support staff from less-impacted regions of the country to Long Island. Northwell said it has hired about 500 extra nurses from around the country.

"It's hard to say exactly how much the losses will be until we begin to recover" and reopen other parts of the health care system, said Mark Solazzo, the chief operating officer at Northwell. "But the losses are going to be significant."

About 75% of Northwell's 780 ambulatory centers have been closed, and about 1,400 doctors and nurses at those locations have been sent to hospitals for support. More critical ambulatory facilities, such as the health system's two cancer centers, have remained opened.

Northwell also has paid more for some personal protective equipment, and has seen a staggering increase in usage systemwide. In an average week, providers had used about 7,452 N95 masks. That average since has jumped to 55,511. Gown usage has gone from 66,878 weekly to about 400,000.

Mount Sinai South Nassau CEO Richard Murphy said it's unclear how much the hospital will lose because it's not known how much the health care system will get paid by private insurance, Medicare and Medicaid for treating COVID-19 patients.

Murphy estimated the Oceanside-based hospital is losing $6 million to $7 million a month during the crisis. He said “there are a lot of unknowns,” including when elective surgeries can return.

Mount Sinai has received about $12.5 million in federal stimulus funds and applied for Federal Emergency Management Agency money to help reimburse the hospital for the $800,000 to buy and rent ventilators, Murphy said.

South Nassau spokesman Joe Calderone added that "we don't know how long we will have COVID-19 patients at the hospital, and we don't know if this comes back in the fall. We just don't know."

Catholic Health Services of Long Island, which operates six hospitals, is losing about $100 million per month, said Daniel DeBarba, the health system's chief financial officer.

"Elective surgeries are where we make the bulk of our money," he said. "So, at the right time, we are anxious to get back to performing them. But it has to be when the time is right."

That time could be getting closer. COVID-19 hospitalizations on Long Island have dropped by about 25% at some health systems in the last week, although the numbers remain high.

DeBarba said while revenue is down, CHS has spent more on ventilators and other supplies. Ventilator costs were about $500,000, according to the health system.

"We've also paid staff double time and brought in temporary staff," he said.

CHS has furloughed some of its administrative clerical staff, DeBarba said, but "we are still paying for their health benefits. Those moves are temporary. We have not laid anyone off."

DeBarba added it will seek federal, state and private assistance to help cut down on the losses.

The hospital council's Dahill said there was one complaint about the first $30 billion payment to hospitals nationwide: It was not adjusted to better support hospitals in areas such as New York, which has been overrun with COVID-19 patients.

“We’ve made the argument that when the next payment is made, more money should go to hospitals that have had a preponderance of cases,” Dahill said. “We are hopeful that the federal government has listened.”

Hospitals upstate also need the federal help, because of the statewide ban that had been in place for elective surgeries, Dahill said. The ban was lifted Tuesday in parts of the state where there are far fewer COVID-19 patients.

"The hospitals upstate don't have a high volume of COVID-19 patients," Dahill said. "But they can't perform other surgeries. They're under a lot of financial stress."

With David Olson