CA hospitals request $1 billion from state as revenues sharply fall

VISALIA, Calif. (KFSN) -- Hospitals in California are suffering huge financial losses due to the coronavirus crisis.

California hospitals are requesting $1 billion in immediate aid from the state's current budget and would like to see another $3 billion allocated from the state's next fiscal year budget, to be matched by the federal government.

The California Hospital Association says these funds will be a lifeline for hospitals that are expected to lose at least $10 billion in the short term.

Hospitals across the country have seen a sharp decline in patient volumes and revenues as they've been asked to stop non-emergency services and prepare for a surge in COVID-19 patients.

Many would-be patients are also choosing not to go to the hospital for fear of contracting the virus.

"We found ourselves you know at the end of February being close to break even, and just two months later, more than a $20 million operating loss," says Kaweah Delta CEO Gary Herbst.

Herbst expects another $10-15 million loss in May.

So far, the hospital has received just over $11 million in federal funding.

"Whatever is recovered from the federal and state government will be incredibly important to our hospital, but will certainly never get us back to where we were," says Herbst.

Herbst says 1,100 of their 5,000 employees have had their hours cut or docked.

Another 184 have been furloughed.

On the bright side, some employees will come back to work as those non-urgent services slowly become available again.

But hospitals also predict economic fallout in the long term.

At Kaweah Delta, capital projects will have to be put on hold.

And the hospital's solid credit rating is expected to suffer.

"And I think just hospitals across the nation are going to see a deterioration of those credit ratings, which will tighten up the market, so make it more difficult for hospitals to borrow, or they'll have to pay significantly higher interest rates because we're considered now to be riskier in our ability to repay that borrowing," says Herbst.
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