A disaster of our own making

And the pandemic did come, but not before Hillsdale Hospital had established a system detailing how it would treat coronavirus cases while protecting the health of other patients in the hospital as well as the health of its staff members. Elective surgeries were postponed or canceled altogether. Personal protective equipment was made available. And nurses and doctors were warned about longer hours — a burden many accepted willingly.

So, when the hospital admitted its first coronavirus patient in mid-March, Hillsdale was ready. Indeed, the guidance the hospital issued was so effective that it managed to prevent patient-to-patient, patient-to-employee, and/or employee-to-employee transmission entirely, according to the hospital’s incoming CEO, J.J. Hodshire.

But the catastrophic surge that many in Hillsdale had feared never quite materialized as it had in Detroit. The outbreak in the small town, which is home to about 8,000 people, remained confined to Hillsdale’s elderly population and its prison system, Ellis told me, totaling 118 confirmed cases as of April 28 and 16 deaths total.

This was by no means an insignificant challenge, and the loss was still great, Ellis added. But it was, at the very least, more manageable than the crisis Hillsdale had anticipated given the widespread losses many of its neighboring counties experienced.

What Hillsdale Hospital did not expect, however, was how long it would need to keep its COVID-19 system in place. Confirmed COVID-19 cases in the county began to dwindle and deaths trended downward, but still, the statewide shutdown persisted past March, into April, and even into May, forcing the hospital to limit its operations to COVID-19 cases and emergencies only.

And that’s when Hillsdale Hospital realized it needed help. The hospital lost nearly $10 million in March and April due to the lack of revenue from elective and outpatient procedures, according to Hodshire. And that number will only continue to grow until the patient volume returns to normal, stretching an already thin budget even thinner.

To cope with this shortfall, the hospital has cut hours and furloughed nearly 20% of its employees. And so far, the only help Hillsdale Hospital has received is a $1 million check from the federal government, Hodshire added.

“At this point, all we have available to us are loans, front-loaded payments for future services, and the hope that they will be forgiven,” Hodshire explained in an open letter to Michigan Gov. Gretchen Whitmer, who has said she wouldn’t lift the statewide ban on “nonessential” procedures until May 15, despite pressure from the state legislature to do so. Whitmer did, however, encourage Michiganders during a press conference in early May to begin rescheduling appointments, and she has privately given the state’s hospitals additional freedom to determine which procedures are essential and which ones are not, according to Dr. Kerianne Holman, a bariatric surgeon for Spectrum Health Medical Group.

Unfortunately, Hillsdale Hospital’s situation is all too familiar to the vast majority of hospitals across the country. No hospital, no matter how large or how small, has been immune to the financial costs that have accompanied this shutdown. The University of Michigan’s massive health system, for example, announced in early May that it would lay off or furlough 1,400 healthcare workers to cope with the $230 million it had lost in revenue. And Grand Rapids’s Butterworth Hospital, which is a part of Spectrum Health’s multihospital system, warned its employees last month that its financial position would take at least three years to stabilize, according to an employee who asked to remain anonymous.

“We’re just bleeding money,” Holman, who also works for Spectrum Health, told me. “Every hospital is.”

More than 120 rural hospitals across the United States have closed over the past several years, according to the Chartis Center for Rural Health, and Hodshire expects that number to skyrocket as the financial strain accrued during this shutdown begins to set in.

“And when rural hospitals close, people die,” Hodshire said in his open letter to Whitmer. “There is no way around it.”

The loss of outpatient revenue is the biggest problem hospitals face since, “whether we like it or not, healthcare is a business,” Holman noted. Procedures deemed “nonessential,” or nonurgent, by the state make up the majority of the healthcare system’s revenue, especially for small hospitals such as Hillsdale’s, which often find themselves at the mercy of insurance providers because they lack the bargaining power that larger hospital systems have.

This problem is compounded by the fact that most hospitals have had to pay for coronavirus treatments out of pocket as insurance companies have scrambled to figure out which treatments to cover. The Trump administration worked with insurers back in March to waive copays for testing and treatment for those already enrolled in benefit plans, but there has been little guidance since then, according to multiple healthcare workers I spoke to in various regions of the country.

“So you don’t have revenue, and you’re also having to pay for this large number of cases,” Ellis explained. “And it’s just been a mess.”

This financial strain has had serious human costs, too. More than 1.4 million healthcare workers across the country are now out of work, a bitter shadow of the national campaign to remind the country just how invaluable their work is. The irony of this has not been lost on Dr. Bill Trevino, who heads outpatient medicine for Premier Health’s internal medicine department in central Ohio.

“I have friends in the medical community that work all over the country — their pay has been cut. And they’re being asked to do things they wouldn’t normally do, with less revenue coming in,” Trevino told me. “From the physicians to the nurses to the administrative staff — everyone has been affected.”

The vast majority of furloughed healthcare workers have been administrative staffers. And many of them will not be rehired since hospitals’ budgets will be extremely limited moving forward; hospitals will adjust to operating without the administrative overhead as a result. This might just lead to an overall slimming down of the healthcare system, Holman said.

“It’s difficult to look that far down the road right now,” she added, “but there’s a chance healthcare could end up becoming a more neatly run system that will hopefully cost less in the long run.”

Even so, it’s difficult to look past the soaring unemployment numbers and crashing budgets and see any sort of long-term benefit. Indeed, the immediate costs are so devastating and all-encompassing that it’s difficult to predict how long it will take the healthcare system to recover. Trevino expects his hospital in Ohio to “play catch-up” for at least the next year. Hillsdale Hospital is in the same position. And for many others, the next 12 months will determine who survives and who does not, Holman said.

When the healthcare system suffers, however, the people who depend on it suffer with it. Oncology visits, cancer treatments, and procedures such as joint replacements, gallbladder removals, and even minor heart procedures were canceled or postponed across the board when the virus began to spread. Meanwhile, patients’ physical and psychological conditions have worsened. Many oncologists fear that the lapse in preventive cancer screenings will result in worse prognoses in the coming months, and psychologists across the country are warning that the U.S. will experience an increase in “deaths of despair” over the next year due to prolonged isolation. The White House warned that as many as 80,000 cancer cases could go undiagnosed during the pandemic.

It’s important to note that the decision to limit nonurgent procedures was not made lightly. Indeed, it was a choice many hospitals voluntarily made in early and mid-March in an effort to save personal protective equipment and prevent in-hospital transmissions of COVID-19. All that we knew about the coronavirus back in March was that it spread quickly and often unnoticeably, and the projected number of cases and deaths at the time rightly created concern.

The decision to put off nonurgent procedures is also one many patients have made for themselves. About 20%-40% of the Henry Ford Health System’s patients near Detroit have recently asked to delay their postponed procedures by another two weeks, according to Dr. Adnan Munkarah, Henry Ford’s chief clinical officer, because “they want more of a comfort zone.”

“They are asking, ‘Am I OK to come into the hospital?’” he said, according to Modern Healthcare.

If this decision had been left to the individual hospitals and patients, both groups would likely be better off now. But the restrictions limiting the healthcare system’s capacity were eventually written into law by state governments eager to flatten the curve of COVID-19 cases. And in many states, such as Michigan, hospitals were left with less freedom and even less direction.

Whitmer’s standard for determining which procedures were and weren’t urgent, or “essential,” was a “moving target,” according to Ellis. And it did not take into consideration how desperately many patients need nonurgent procedures, even if they are not immediately necessary in technical terms.

“Identifying which things are an emergency is very easy,” Ellis explained. “But where we get into trouble is the matter of urgency. Well, what’s urgent? That question requires doctors to look at a person’s quality of life. If they’re in pain, they can’t walk, or they’re worried their condition will worsen … all of that can create a problem that wasn’t there before.”

The postponement of nonurgent procedures has created a backlog that will take time to work through. Spectrum Health’s nurses and doctors are already preparing for longer hours to help their community get back on its feet, said Holman.

This backlog will also require additional resources. Spectrum Health is now testing every single one of its patients for COVID-19 at least 48 hours before a scheduled procedure, according to Holman. But smaller hospitals, such as Hillsdale, cannot speed through this process in the same way because it no longer has the manpower to do so.

“We’ve had to cut down on resources, and now, we have to reinstate and test all of our employees and patients. Initially, we might be kind of overwhelmed by the sheer volume of patients coming in. We’ll have to pick through more serious cases first and then work through that backlog,” Ellis predicted.

In hindsight, a better system, proposed by nearly every single healthcare worker I spoke to, would have been this: The states should have left the power to determine which procedures could continue, and which ones could wait, to the localities. Hillsdale Hospital did not experience the flood of patients that Detroit’s healthcare system experienced, yet both were governed by the same rules. In Ohio, the situation was the same: Trevino’s hospital, which also serves a rural area, did not experience much of a curve at all, yet it was forced to play the big cities’ rules.

“Urban areas were set up for this catastrophe,” Trevino said, “and many of them did get hit hard. But I’m not sure why it had to be a blanket decision. Because now, you have systems like ours suffering as a direct result of the cure rather than the actual problem.”

While it’s still too soon to draw final conclusions, this system seems to have worked well in Florida, where the state government largely avoided a top-down approach and instead allowed individual counties to lead the decision-making process.

“The fact is that even the state governments can be too big,” Ellis said. “There’s a lot Hillsdale County could have done because our outbreaks were so isolated, but they put restrictions on an entire community because of what’s happening in Detroit. And that didn’t necessarily have to happen.”

Increased localization is, however, the only thing most healthcare workers believe we could have done differently. Hospitals would still have canceled nonurgent procedures, regardless of whether the state governments forced them to, because the risk the virus posed was too great and we lacked the resources to do anything else about it. If there had been mass testing available, some hospitals might have been able to section off wings and reserve them specifically for COVID-19 patients. But that level of testing was not available in March, so it was impossible to determine which patients were carriers and which ones were not.

Another alternative I proposed to the healthcare workers with whom I spoke: What if we had assigned one hospital in a given area to COVID-19 patients only and allowed the other hospitals in that community to operate at normal capacity? This might have worked in large, urban communities, such as Detroit, but it would not have worked in Hillsdale, where there is only one hospital, one emergency room, and one team of doctors.

Hillsdale Hospital will survive thanks to the foresight and financial prudence of its board. The hospital has always been “smart with money,” Ellis said, “because we’ve had to be.” The hospital will need to downscale and fight insurance providers for fair coverage to break even, but Ellis and Hodshire are hopeful that they’ll come out in the clear.

“This is a hospital that survived the Great Recession, a hospital that has survived all sorts of economic hardship alongside our community. We’ve always had to come up with creative ways to serve the community,” she said.

This isn’t the first crisis Hillsdale Hospital has faced, and it won’t be the last. But it just might have been avoidable.

Kaylee McGhee is a Washington Examiner commentary writer.