University of Iowa hospitals expects $100 million coronavirus hit through June

'The last thing we want to do is look at layoffs'

Medical assistant Shannon Jensen (right) carries a swab for a coronavirus test taken from a patient in their car back to
Medical assistant Shannon Jensen (right) carries a swab for a coronavirus test taken from a patient in their car back to her colleague Katrina Rogers to be bagged and sealed at a temporary pre-procedure screening facility at the Family Medicine Clinic of the University of Iowa Hospitals and Clinics in Iowa City on Monday, April 20, 2020. (Andy Abeyta/The Gazette)

IOWA CITY — Coronavirus-related losses across the University of Iowa Health Care system could top $100 million through June 30, the end of its current budget year, leadership announced this week.

And the next budget year could be even tougher as Iowa’s largest academic medical center has and continues to make its ability to respond to the COVID-19 pandemic a top priority. That bleak outlook has UIHC administrators considering “everything” to mitigate the impact and blunt the blow on the top-ranked and internationally-esteemed 811-bed hospital that employs more than 924 physicians and dentists, more than 2,445 nurses, and more than 10,224 additional support staff members.

Cost-cutting measures on the table include forgoing raises, temporarily cutting pay, eliminating open positions, delaying recruitment, strategizing vacation-time use, postponing maintenance, reassessing pharmaceutical supply chains, and scanning purchasing practices for potential savings, UIHC CEO Suresh Gunasekaran told reporters Wednesday.

The sprawling campus with clinics across the region has no current plan for layoffs.

But, Gunasekaran conceded, “Every reasonable business has to look at their staffing.”

“We feel very very strongly that layoffs should be the last option,” he said, noting a few months ago the campus was at 90 percent occupancy with actual revenue and operating income well above budget.

UIHC administrators in February reported an operating margin of 6.2 percent, nearly double the 3.3 percent budgeted.

“We know that Iowans depend on us, and we know that there will be a return to the community and patients depending on us,” Gunasekaran said. “So the last thing we want to do is look at layoffs. But, unfortunately, if this crisis continues for months and years, then that would have to be on the table.”

UIHC leadership is talking to faculty and staff about that outlook and potential through a series of meetings and town halls, tapping employees for ideas in hopes of mounting a collaborative response to what could be the campus’ greatest financial challenge in its history.


“If you look at it in terms of the time period — within four to six months — did we ever have a period that even comes close to this kind of revenue loss? The answer is no,” he said.

Of course, UIHC is not alone — with hospitals and health care providers locally and nationally facing unprecedented challenges, shortfalls, and losses as they scramble to response to and contain the coronavirus pandemic, which has infected about 5 million globally and killed more than 324,000.

More than 1.5 million of the cases and 92,700 of the deaths have been in the United States. Iowa’s infected total topped 15,500 this week, with its death toll topping 380 as of Wednesday.

In response, the federal government has approved trillions in stimulus and recovery funding — and to date UIHC has received about $35 million, Gunasekaran said, noting, “Every bit of funding we get from everywhere is absolutely helpful.”

“In the magnitude of this, $35 million out of $100 (million) still leaves a pretty significant loss,” he added.

In April alone, UIHC lost about $22 million from extra COVID-19 expenses and revenue losses — driven largely by fewer visits to its main campus and clinics, with patient fears compounding curtailed elective surgeries.

‘One of the safest places’

That degree of monthly loss could continue unless UIHC sees improvement, which Gunasekaran said his campus has a plan to compel — by, among other things, encouraging patients to get any health care they need via affirmation of the hospital’s safety even — if not especially — right now.

“We are open for business,” he said. “This might actually be the easiest for you to get into University of Iowa Health Care that you’ve ever experienced.”

With massive and widespread COVID-19-propelled safety measures in place — from entrance screenings to mandatory employee face-shield use — Gunasekaran urged, “We really made the place safe.”


“Honestly, our hospital has to be one of the safest places in the entire state,” he said.

That many Iowans have delayed health care makes sense, given the months of social-distancing admonitions, according to Gunasekaran.

“Our society as a whole is trying to figure out how to stay safe, and we we’ve done so many things to encourage folks — rightfully — to social distance and to only go out when necessary,” he said. “Now to convince folks that it’s OK to come back and use the health care system is taking time.”

Because UIHC finances were so strong before COVID-19 began to take its toll locally in March, Gunasekaran said the administration — for the entire budget year — is hoping to break even, at best. It could experience some loss, depending on what happens in the coming weeks.

Next year will be worse.

“The reason we’re talking to the staff about all the options being on the table is it’s the responsible thing to do when you’re staring at this kind of a potential loss,” he said. “It’s really important for us, in our culture, to talk to everyone about it and make sure we’re all rowing in the same direction.”

Final decisions on any financial-related moves or changes are expected in the coming weeks and months and will be shared with employees first, Gunasekaran said.

Bright spots

And not all the news is dour, as Gunasekaran said COVID-19 has forced his system to find fast efficiencies and ramp up improvements — clinical and otherwise. Consider the explosion of telemedicine across its clinics and departments, saving patient and provider time and money, in some cases.

“Telemedicine is one of the tremendous bright spots across our organization,” he said.

Where UIHC telehealth visits were in the tens to hundreds before, they now are in the thousands — with UIHC providers so far this year providing 13,845 telehealth screenings for flu-like symptoms, including 91 on just Tuesday.

“I think this really is the future,” Gunasekaran said. “I don’t think that telemedicine is a substitute for in-person care. But it’s a complete enhancement to in-person care. And what we plan on doing at UI health is making it a regular part of our toolbox of working with patients.”


Looking forward, he said, UIHC doesn’t want to just maintain its pre-COVID-19 standard of care. It aims to pursue an upward trajectory of continued improvement, which — per the needs of Iowans — could focus on cancer care, cardiovascular care, maternal and fetal medicine, and mental health.

“The other thing we have to do is make ourselves more convenient,” he said. “Quite often, folks really find the U sometimes a little bit intimidating, a little bit complicated to get in and out of.

“So you’ll see us focusing a lot more on making care accessible … When you come to campus, I think we’ll also make it more welcoming.”

Related to COVID-specific care, Gunasekaran touted his campus’ firsts in Iowa — first to offer the promising drug Remdesivir, first to offer home COVID-19 care, first to start using plasma therapy.

And UIHC has seen some COVID-19-related positives in recent days, with its Chief Medical Officer Theresa Brennan this week reporting downward trends in hospitalized patients, symptomatic patients needing tests, and coronavirus positives among those being tested.

As of Tuesday, the most current data available publicly, UIHC had 13 adult COVID-19 patients, down from a peak of 37 on April 2, according to Brennan. Its percent of positive COVID-19 tests also has “decreased significantly,” she said, dropping from a high of 31 percent on April 9 to 2 percent this week.

The total number of tests UIHC is running for symptomatic patients also has gone down.

“We’re really grateful to see this trend,” Brennan said, but warned, “This outbreak is not over. And as we open up the government and open up our economy and many different sites throughout the counties in the State of Iowa, I want to really be certain that people continue to practice those safety standards.”

That includes social distancing, masking, and hand-washing.

“Just because things have gotten better and seem to be better, it doesn’t mean we’re out of this yet,” she said.

Resurgence ready?

The UI Stead Family Children’s Hospital currently has two pediatric COVID-19 inpatients, for a total of six, and has not seen any cases of COVID-19-related multisystem inflammatory disorder — a rare syndrome that’s been reported in children and adolescents nationally and more recently in Iowa.


Brennan said the hospital is constantly monitoring for that, and Gunasekaran said UIHC — including its Children’s Hospital — continues to expand criteria for patients needing to be tested.

As the state continues to ease restrictions on shuttered businesses and curtailed activities — prompting Iowans to schedule haircuts, visit restaurants, resume athletic practices, and participate in events — Gunasekaran said the hospital is wary of and preparing for a potential coronavirus resurgence.

This could become especially important considering UI plans to return students, faculty, and staff to campus in the fall.

“We’ve planned for it in operational ways and financial ways,” he said.

Additionally, Gunasekaran said, his health care system supports the state’s efforts to expand testing and contact tracing.

“We would like to make sure that’s something that’s a tool in our tool belt that’s a little bit more robust as we move forward,” he said.

But the potential for resurgence is likely with us — as part of a “new normal” — until the arrival of a vaccine, according to Gunasekaran.

“Financially, we’re factoring for some level of loss associated with some resurgence — but it’s really hard to tell how much that’s going to be,” he said.

The odds one will occur make getting seen for any non-COVID-19 health care now even more important.

“If you are a patient, if you are older, if you are a parent and you’re thinking about health care for your kids, not knowing when there will be a COVID outbreak is all the more reason why you should get all necessary medical care in a timely manner when you can,” he said.

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