42 Hospitals Go Bankrupt in Pandemic

The Corona Virus pandemic is causing financial devastation for dozens of hospitals across the country, with some 42 facilities facing closure or bankruptcy, according to the American Hospital Association.

Hospitals face soaring costs related to the pandemic, the opposite of what you’d think, with so many people falling ill and needing hospitalization. The cash crunch is because other sources of revenue have declined from cancelled services and the drop in patient volume. Reimbursement challenges, the cost of purchasing personal protective equipment and increased overtime costs are also contributing factors.

The American Hospital Association detailed how facilities could lose upwards of $200 billion between March 1 and June 30, an average of $50 billion per month.



Non-federal US hospitals could face the loss of approximately $161.4 billion in revenue over the four month period, with canceled services, including non-elective surgeries and outpatient treatment being the main culprits.

The top issues the hospitals face are:

  • the effect of COVID-19 hospitalizations on hospital costs;
  • the effect of canceled and forgone services, caused by COVID-19, on hospital revenue;
  • the additional costs associated with purchasing needed personal protective equipment; and
  • the costs of the additional support some hospitals are providing to their workers.

The AHA said the federal government did act quickly to provide financial relief during the outbreak of the Corona Virus. But many facilities had pre-existing financial pressures before 2020 started and more funding is needed.

Congress created a provider relief fund to support health care providers during the virus outbreak. This fund is meant to stabilize the facilities — not to fully restore pre-virus compensation.

These funds are distributed to all health care providers, so only a portion of the funds go directly to the hospitals. Additional funds are needed to treat patients, save lives and get America back on its feet.


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