CORONAVIRUS

University of Iowa hospitals boasts 99.7% coronavirus survival rate, amid financial woes

'It is the largest financial challenge that this organization has ever faced'

University of Iowa Health Care complex, which houses University of Iowa Hospitals and Clinics, is seen in this photo tak
University of Iowa Health Care complex, which houses University of Iowa Hospitals and Clinics, is seen in this photo taken on Friday, April 18, 2014, in Iowa City. (The Gazette)

IOWA CITY — While warning of an unprecedented mountain of financial challenges ahead and a likely $2 million deficit at the end of what began as a banner budget year, University of Iowa Health Care officials on Thursday also touted remarkable achievements so far in their COVID-19 response.

Thanks to a rapid ramp up of protective equipment supplies, visitor restrictions, an influenza-type-illness clinic, telehealth consultations, drug trials, and new screening protocols — among other things — UI Hospitals and Clinics to date has achieved a 99.7 percent COVID-19 survival rate.

“Our survival rates for patients who we follow from initial diagnosis of their coronavirus infection is 99.7 percent, which is among the best survival rates anywhere in the world,” UIHC Vice President for Medical Affairs Brooks Jackson told his campus’ governing Board of Regents on Thursday.

Looking closer that percentage, Jackson said, of 367 COVID-19 patients his hospital has seen from initial diagnosis — including hospitalized patients and those treated via UIHC’s at-home COVID-19 care — only one has died.

“It was someone who had very advanced cancer before the coronavirus infection,” he said in affirming the hospital is ready for any potential surge. “We have some of the world’s best pulmonologists, intensivists, hospitalists, infectious disease faculty.”

Jackson’s assertion of his hospital’s ability to continue meeting Iowans’ health care needs, even if COVID-19 cases swell, extended to non-coronavirus patients.

“We are confident in our ability to continue to care for all patients during this pandemic, whatever their health care needs may be,” Jackson said.

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But that doesn’t mean UIHC isn’t facing its most immense financial challenges in history, requiring significant, structural, and permanent change — along with “some hard decisions.”

Splitting its COVID-19 challenges into two “mountains” — one involving treatment, research, and preparations and another related to budgetary implications — UIHC initially pushed financial consequences aside so it could prioritize health care, according to Chief Financial Officer Brad Haws.

“I think the analogy of the second mountain is appropriate,” he said. “When we worked through the initial stages in conquering that first mountain, I don’t think it’s too much of an overstatement to say we simply said let’s put the financial consequences aside … It felt like we were just doing the right thing and that we would figure out what to do with the financials later.

“And that’s kind of where we are now.”

Iowa isn’t the only health care enterprise facing a “new financial reality,” although it differs by region and institution, and UIHC CEO Suresh Gunasekaran told regents the full picture remains unclear.

“What we do know is that it is the largest financial challenge that this organization has ever faced,” he said. “And the kinds of losses we’ve already seen from this are simply staggering and unprecedented.”

The 811-bed hospital — which typically admits about 37,000 inpatients a year, receives more than 58,000 emergency department visits annually, and accommodates more than 1 million clinic visits on its main campus and community sites — in April and May saw a 26 percent decline in hospital occupancy.

As it, like other health care providers statewide, halted elective and scheduled surgeries, UIHC’s main operating room volume plummeted 67 percent. Its ambulatory surgical center volumes tanked 90 percent, and emergency room arrivals have dropped 21 percent, among other declines.

With the governor easing restrictions in recent weeks and UIHC resuming surgeries, volumes have started to recover, Gunasekaran said. But they’re not restored and much of the damage is done for this budget year, which ends June 30, with UIHC projecting a $100 million impact in the final four months of fiscal 2020.

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The COVID-19 financial hit to UIHC — including losses and new expenses — amounts to about $150 million to date, according to board documents. Federal aid has mitigated that a bit, shaving $30 million off the losses and bringing the net damage to $120 million.

But next budget year could be worse without action — as UIHC outlined the potential for $20 million to $30 million in losses a month in FY2021. Factored into those projections are expected slow returns in clinic volume, continued expense inflation, a potential COVID-19 resurgence, and economic challenges prompting changes in the hospital’s payer mix.

“We think that management has to take action,” Gunasekaran said. “Simply hoping that if we wait three months or a year it’ll just come back, I think is unlikely.”

But, he reported, management does have a plan. And it’s given the leadership optimism for the upcoming budget year.

“We are going to project for next year a break-even budget,” Gunasekaran said. “This will require us to have significant improvement across the system and pull multiple levers.”

That includes improving efficiency via, among other things, inpatient-outpatient throughput “to improve the profitability of our services.” UIHC will focus on growing high-demand services and programs, like those involving cancer care, orthopedics, cardiovascular services, and women and children offerings.

“We have to look at everything on the table when it comes to improving efficiency,” he said. “We’re going to look at supply chain and our billing processes to see how much we can extract from these. We’re going to have to think outside the box and probably think outside of Monday through Friday, 8 a.m. to 5 p.m.”

Gunasekaran hinted at extended clinics, longer operating room hours, more off-campus services in hopes of reaching Iowans away from main Iowa City site.

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“And then we’re going to have to control our labor expense and innovate new models of staffing to make sure that everyone’s functioning at their highest level,” he said. “We think that by doing this, we can continue to preserve a very bright future as we move forward.

“But these circumstances do require us to look at our expenses very differently, as well as a challenge ourselves to generate new revenue streams.”

Comments: (319) 339-3158; vanessa.miller@thegazette.com

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