Alaska hospitals face 'catastrophic' losses with decline in business

The financial losses from the cancellation of nonessential health care procedures in Alaska has been “catastrophic to hospitals and nursing homes,” the leaders of 11 major Alaska health care facilities told Gov. Mike Dunleavy.

Small hospitals will lose from $2.3 million to $11.4 million from April to June, while the losses are expected to be in the $40 million to $50 million range for the largest hospitals and nursing homes.

The statewide losses are expected to be at least $283 million from March to June.

“These losses are staggering, but the consequences are even more alarming,” the executive committee of the Alaska State Hospital & Nursing Home Association wrote to Dunleavy April 24.

The group has asked for $150 million in grants to hospitals and nursing homes, money that may be “the difference between financially recovering or dissolving for facilities.”

“One critical access hospital reports that if negative operational trends continue past June, it will deplete its operating cash. Another is expecting to lose a minimum of 59 days of cash on hand due to the declines, which means it is on track to reach critical cash levels in about a month. Some health systems are publicly bracing for furloughs and layoffs, and at least one nursing home is approaching ‘negative territory.’”

The losses have prompted renewed worries about whether one or more facilities will face financial ruin. The health care system was already fragile before the pandemic, the hospital officials said, and the state can’t afford to lose a single entity.

The state has 2 acute care beds per 1,000 people, the ninth-lowest average in the U.S. The national average is 2.5 acute care beds per 1,000 people. Alaska has the lowest nursing home facilities per capita in the country.

“To lose a single hospital or nursing home would be a devastating blow to health care access,” they said.