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Financial Impact of COVID-19 on Hospitals in Rhode Island, 2020

Executive Summary

The Hospital Association of Rhode Island (HARI) engaged Health Management Associates (HMA) to complete a review of the financial impact of the novel coronavirus (COVID-19) on hospitals and healthcare systems in Rhode Island. HMA conducted interviews with hospital leaders representing all healthcare systems in the state. From the data shared, we developed statewide estimates of the financial disruption seen by hospitals in March and April and projections of the financial impact over the duration of the year.
Hospitals began to experience significant impacts starting in mid-March. Pursuant to federal and statewide guidance and due to operational necessity, hospitals began to cancel or reschedule all services determined to be non-emergent or unnecessary to preserve organ function or avoid further harm from underlying conditions or diseases. These impacts through mid-May result in very large revenue losses. For the six-week period from mid-March through the end of April Rhode Island healthcare systems experienced a 35% decrease in patient revenue. Operating expenses in March and April decreased by about 4% from expected levels. Systems achieved savings associated with the slowdown in patient activity, but the savings were partially offset by pandemic preparedness expenses.

As a result of the patient care disruption, operating margins declined by $145 million in March and April compared to expected amounts.