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Hospitals struggling financially during pandemic

Between staffing and uninsured hospital’s bottom lines are hurting
Published: Feb. 10, 2022 at 9:08 PM CST
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BIRMINGHAM, Ala. (WBRC) - There’s been a misconception throughout the pandemic that hospitals are profiting from COVID and all of the treatments that come with it.

Hospitals were not doing well in the state prior to the arrival of COVID. While the pandemic filled emergency rooms and ICU beds, it didn’t help hospital’s bottom line.

“Before COVID about 70 percent of hospitals had negative operation margins. In 2020, the first year of COVID, based on the data we have looked at now 80 percent of hospitals have negative operating margins,” said Alabama Hospital Association President Don Williamson.

While hospitals have been filled to the brim, and even overflowing at times over the last two years, Williamson stresses that doesn’t translate to profit.

“Unfortunately this isn’t like a hotel. If the hotel is full you presume the hotel is making money. That doesn’t work that way with hospitals because number one, hospitals don’t set their rates,” said Alabama Hospital Association President Don Williamson.

Rates are actually set by insurance companies like Blue Cross and Medicare.

“We have the lowest Medicare reimbursements rates in the country and secondly because we have not address the problem of the uninsured.”

Williamson stresses the industry must change, and believes that expanding Medicaid could ease the financial burden facing hospitals.

“Medicaid expansion takes those individuals who are uninsured and converts them into Medicaid beneficiaries for the most part and that solves a major problem of the financial burden for which hospitals face,” said President Don Williamson.

Williamson says hospitals also had to spend extra money to stay staffed during the pandemic. He says that’s costing hospitals millions they don’t have.

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