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Understanding the Effects of COVID-19 on Hospital Volume and Finances

By Berna Demiralp, PhD and Aishwarya Agarwal, MA

The COVID-19 pandemic brought about a drastic downturn in hospital finances at a time when hospitals were called to play a frontline role in the fight against the pandemic.  According to projections from the American Hospital Association, hospitals will lose $323 billion in 2020 due to COVID-19, with $202 billion of this loss taking place in the first four months of the national health emergency in the US (March through June).  This financial downturn was driven by an unprecedented and abrupt reduction in the utilization of hospital services.  As the fight against the coronavirus continues, much remains uncertain.  Hospitals’ ability to navigate these uncertain times will depend, in part, on their success in anticipating and responding to future changes in the demand for hospital services.

Below we present a conceptual framework for understanding changes in inpatient hospital services as a result of the pandemic.  Our framework suggests the following:

  • Hospitals’ pre-pandemic mix of inpatient services is a key determinant of the impact of COVID-19 on hospital finances.
  • Even though the total inpatient volumes may return to pre-pandemic levels, the mix of inpatient hospital services is likely to change due to COVID-19, […]
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