Hospitals are still working through the financial and employment hardships occasioned by COVID-19 more than a year and a half after it was declared a pandemic.
Antelope Valley Hospital is a full-service, acute-care hospital that has spent more money than it received from the government throughout the pandemic by a wide margin.
Chief Executive Edward Mirzabegian said that overall, the hospital has received and used $18 million in government aid, while spending a total of $40 million. The hospital also received $28 million in government aid but elected to not use the money because it was a loan.
The public hospital’s costs increased in several ways due to the pandemic. For one, it had to purchase oxygen at three times more than its regular price, according to Mirzabegian. He added that money was also put toward incentives for employees and toward adding more service physicians to keep up with the patient load.
“Financially, it was a losing proposition. … All these staffing expenses and PPE, the county and the state gave us some PPE but in general, I had to buy (an increased amount of) disposable gowns and masks for four to five times more (than their original price),” Mirzabegian said. “We survived, yes, but I’m still short.”
As COVID-19 began to first spread, AVH dedicated one unit strictly to COVID patients. “It started with 30 (patients), and then went to 60, then it went to 90, then went all the way to 180 patients,” Mirzabegian recalled. Inevitably, space began to run out before a 54-bed field hospital was constructed in AVH’s parking lot by Samaritan’s Purse, an aid organization in North Carolina.
“The steps we took were very successful,” Mirzabegian said. “I’m so happy with how we managed this particular time with all the unknowns and changing rules.”
However, the hospital had more problems to navigate through.
In addition to the financial strain, AVH had to endure staffing shortages. Mirzabegian said some staff quit and never returned, others turned to traveling health care and migrated to lesser populated areas that promised more money for their services.
“We lost a lot of nurses, techs, respiratory therapists and all that because they decided to cash it in,” Mirzabegian said. He added that the free staff provided by the county and state were not enough and that the hospital remains short on staff.
The Hospital Association of Southern California wrote in an email to the Business Journal that many health care professionals are leaving hospital employment, retiring early or leaving the field altogether due to fatigue and other factors.
Mirzabegian said the challenge for AVH currently is navigating mandates such as the California COVID-19 vaccine mandate for health care workers. Of the hospital’s 2,500 employees, some 320 do not want to be vaccinated, according to Mirzabegian.
“They don’t want to get it,” he said. “All these mandates are not necessary. They have to let companies alone, the hospitals alone, to deal with this.”
Mirzabegian added that unemployment benefits are also a challenge, as they are keeping people from returning to work.
National Guard assistance
Like AVH, Pacifica Hospital of the Valley in Sun Valley had its fair share of issues created by the COVID-19 pandemic.
The combination of COVID-19 surges mixed with the need to provide staff with PPE and adequate training created immediate significant expenses and revenue loss, according to Chief Executive Officer Precious Mayes.
“Due to the multiple COVID-19 surges of patient admissions, approximately 87 percent of our staff was out on various types of leave of absences,” Mayes wrote to the Business Journal in an email.
Mayes contacted emergency medical services and government agencies to combat the severe staff shortage. Subsequently, around the peak of the 2020 COVID-19 winter surge, Pacifica Hospital received support from the National Guard to assist with the staff shortage.
Also, like many hospitals around the country, Pacifica Hospital suffered from the slowdown in elective surgery and outpatient rehab services. The hospital temporarily closed these services, which hurt its revenue stream.
The Hospital Association wrote that hospitals are now seeing a backlog of patients who have delayed care due to either the mandatory shutdown of elective procedures, or due to hesitancy in seeking care while COVID-19 was on the rise.
To deal with the financial impact of COVID-19, Pacifica Hospital entered into an agreement with JR Dallas Wealth Management in May, which provided Pacifica with equity and debt financing. Financial terms were not disclosed.
JR Dallas is a private equity fund that finances “innovative growth companies and strategic project worldwide,” according to its website.
Pacifica Hospital is designated as a safety
net hospital, meaning that it serves patients from other hospitals dealing with overflow.
JR Dallas said in a statement it plans to invest in other safety net hospitals in California and the Southwest region.
“We are excited to partner and serve a much larger footprint with the support of JRDWM,” Mayes said in a statement at the time of the investment. “We can broaden and reach more of the communities in need and continue to care for people in the midst of the worst pandemic in 100 years.”
Also, Pacifica Hospital applied to all COVID-19 related stimulus funds and grants to try and offset its losses. It also worked with insurance partners to ensure timely payments for services, according to Mayes. “These steps did provide some financial relief but was not close to covering operating expenses incurred and revenue loss due to the pandemic,” Mayes wrote.
Currently, Pacifica Hospital is still recovering from the COVID-19 surges of 2020 and management is working on staffing strategies that will help mitigate any shortages that may come from another surge.
“Government agencies need to provide a bail out for independent community hospitals such as Pacifica Hospital where we provide care to the most vulnerable and underserved communities,” Mayes wrote. “Not enough is being done to help hospitals such as ourselves.”
According to the Hospital Association, a challenging road lies ahead for hospitals’ economic recovery.
A comparison of first-quarter 2020 and 2021 indicates that though inpatient volume was similar year to year, 2021 operating expenses were up 7.4 percent over the same period a year ago.
Additionally, 35 out of the 83 private hospitals in Los Angeles County reported preliminary 2020 operating losses, an increase of 26 hospitals compared to 2019. “Cumulatively, those losses reached $620 million last year, up from $450 million in 2019,” the association wrote.
Hospitals are now contending with the upcoming flu season, the potential impact of school reopenings, winter holiday gatherings and increased travel. The factors, according to the association, “will have significant impacts on our hospitals, how they respond and could cause further strain on the health care workforce.”