Ban on elective surgeries puts financial strain on local hospitals

Governor Greg Abbott has expanded his executive order banning elective surgeries to 4 more counties.

MORE: Elective surgeries suspended in 4 more Texas counties

Last week Harris County received the order, and so far is the only county in the greater Houston area affected.

We spoke with Dr. Vivian Ho, a health economist with Rice University and Baylor College, who tells us that elective surgeries make up nearly 50% of revenue for hospitals and that those facilities in the medical center haven’t financially recovered from when they stopped elective surgeries back in April and May.

“Healthcare workers that’s about 11% of employment here in Houston. So any hit to that because these people are not earning their regular income, is just going to lead to even more of this, this sort of recession that we are experiencing locally,” Dr. Ho says.

She adds that this could affect the quality of care we receive if the hospitals can’t afford to hire more nurses, or purchase certain medications and the latest equipment. Dr. Ho says some facilities may even close for good.

“I expect smaller hospitals in Houston to close, and I expect a fair number of hospitals and rural areas in Texas. Who won't have the financial resources and we'll have to be kept a close. I do hope that the state and federal government will also step in and provide additional financial assistance to these hospitals."

Saint Luke’s Health is feeling the financial strain, they said federal aid is critical to their response against COVID-19, but it’s not enough to cover their losses.

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"Congress appropriated funds to help stabilize these hospitals; however, the federal government has only disbursed about 65% of the relief funds that were appropriated to hospitals two months ago. Hospitals need additional relief quickly, especially given the surge in cases we have seen."

Dr. Ho says one of the biggest misconceptions is that hospitals earn money from treating COVID-19 patients.

“It turns out there have been consulting companies that done some calculations on the cost of caring for a COVID patient and the reimbursements based on other patients with respiratory diseases, and they actually estimate that the hospitals are taking a loss on every single COVID patient that they treat who’s in the hospital. So they are taking a loss per patient that is not being completely compensated for by the federal government."

So the hope of many hospitals right now is that state and federal governments will step in soon to help during the time they can’t perform elective surgeries.

MORE: Texas Medical Center CEOs react to suspension of elective surgeries