Data shows U.S. hospitals volume remained low, even as restrictions were lifted

CHICAGO (August 17, 2020) – Hospital patient volumes and resulting revenue dropped substantially at the onset of the COVID-19 pandemic but didn’t bounce back to expected levels once restrictions were lifted. According to data gathered by the Crowe Revenue Cycle Analytics (Crowe RCA) software, even with elective medical procedures resuming, the average hospital is down $56.3M of net patient service revenue (annualized) due to COVID-19. A new Crowe report, “Volumes & Net Revenue Return Nationally, but Not to Previous Levels,” looks further into this topic.

Crowe is a public accounting, consulting and technology firm with offices around the world. The Crowe RCA solution captures every patient transaction for nearly 1,500 hospitals and more than 100,000 physicians nationally for purposes of automating hindsight, accounts receivable valuation and net revenue analyses. Within its benchmarking database, Crowe analyzed a portfolio including 45 states and comprising 707 hospitals within Medicaid-expansion states and 445 hospitals in nonexpansion states, as of 2019. Crowe combines financial transaction information with 835/837 account-level data to produce comparative metrics.

The report looks closely at several areas of services, including emergency departments, observation services, outpatient services, surgery departments and inpatient services. Only 23% of hospitals studied exceeded a previous baseline in any of these categories between May 17 and June 21, with the majority of hospitals never achieving their previous baselines in any single category of service.

“When hospitals services were restricted at the onset of the pandemic, we expected pent-up demand to create inflated patient volumes when restrictions lifted, which didn’t happen,” said Brian Sanderson, managing principal of healthcare services at Crowe. “This sustained drop represents a significant longer-term challenge to the financial viability of hospitals that derive a majority of their margin from outpatient services such as surgeries, ancillaries and emergency department care.”

According to the report, urban areas have seen lower patient volumes than rural areas throughout the course of the COVID-19 crisis, ranging from 6.8% lower volumes during the week of April 5 to 2.6% during the week of June 21. “Many urban areas had stronger shelter-in-place restrictions and higher incidences of COVID-19 infections than their rural counterparts, so even though restrictions were lifted, urban residents were likely still concerned about their safety and continued to delay non-time-sensitive procedures,” said Sanderson.

Beyond urban versus rural, the report also examined trends by geographic region:

• For the week of April 5, the Great Lakes region experienced the nation’s largest deficit of all outpatient services (including surgeries) of 63.2% below normal volumes, versus the smallest deficit in the Far West of 54.2%. This disparity across regions continued as restrictions were lifted while volumes remained down. For the week of June 21, the Far West had the lowest volumes at 15.5% below baseline, followed by Southwest (-13.7%), Mideast (-12.8%), Great Lakes (-12.6%), Rocky Mountains (-9.2%), Southeast (-8.6%) and Plains (-6.8%).
• Inpatient services also exhibited disparity among regions, and none of the regions studied have yet to return to their previous baseline. For the week of June 21, Rocky Mountains (-11.2%), Great Lakes (-9.4%), Far West (-8.4%), Southeast (-7.4%), Mideast (-4.9%) Southwest (-1.9%) and Plains (-7.6%) all remained below previous volumes.

Lower volumes, particularly outpatient services where margins tend to be higher, mean lower net revenue and negative margins. For the average 350-bed hospital in the Great Lakes region, if volumes do not return to baseline and remain at June 2020 levels, this represents an annualized decrease in net revenue of $56.3 million.

“To survive, these hospitals will need to dramatically lower their cost structure and embrace new models of care delivery, such as telehealth and touchless environments, that remove the reticence patients appear to have about returning to large clinical environments,” said Sanderson. “Hospitals will also need a renewed focus on revenue precision such as projecting net revenue, improving revenue cycle operations and instituting new charge capture processes to create a bridge to a new operating model in 2021.”

To download a copy of the report, please visit: “Volumes & Net Revenue Return Nationally, but Not to Previous Levels.”

About Crowe Revenue Cycle Analytics (Crowe RCA) benchmarking data
Nearly 1,500 hospitals and more than 100,000 physicians use the Crowe RCA solution to capture every patient transaction for purposes of automating hindsight, accounts receivable valuation and net revenue analyses. The benchmarking database spans 45 states and comprises 707 hospitals within Medicaid-expansion states and 445 hospitals in nonexpansion states, as of 2019.

About Crowe
Crowe LLP is a public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory and consulting services. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.

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