Northwell Health, one of the largest regional hospital systems in the eastern United States, posted an operating revenue increase of 4.1% for the first half of the year, according to its recently released financial filing, but net patient services revenue was down nearly 9% compared to the first half of 2019. Meanwhile, year-over-year operating expenses rose 9.5%.
As a result, Northwell posted an operating deficit of nearly $250 million for the first half of 2020, compared to a surplus of nearly $70 million during the first half of 2019. Compounding this was a $34 million decrease in investments, helping to fuel an overall net loss of about $329 million
Altogether, Northwell estimates that the negative financial impact from COVID-19 has totaled $1.16 billion to date. The bleeding is continuing into the second half of the year, with an estimated negative impact of $100 million on the system during the month of July. However, the nonprofit has been buoyed by about $1.23 billion in funding as a result of the Coronavirus Aid, Relief, and Economic Security Act.
Northwell Health is one of the preeminent hospital systems on the East Coast, with 23 hospitals in New York City, Long Island, Westchester County and upstate. The New York City area was hit hard by the COVID-19 pandemic that began in the U.S. more than six months ago.
With the cancellation and postponement of many elective healthcare procedures for months during the pandemic, Northwell has taken a similarly massive hit to its bottom line. Altogether, patient revenue dropped 9.7%, to $5.1 billion from $5.6 billion during the first half of 2019.
“The current global outbreak of Coronavirus Disease 2019 … is having numerous and varied medical, economic and social impacts, many of which have had adverse effects on Northwell’s operations and financial condition, beginning in March 2020,” the company said in its financial statement.
Northwell is certainly not alone. Sutter Health, a regional dominant healthcare system that is similarly sized to Northwell, posted an $857 million loss during the first half of the year.
The combined drops in revenue and investment income during the first six months of the year translated to the more than $1 billion hit to Northwell’s bottom line, along with a drop of about 20% in accounts receivable as of the end of June compared to the end of 2019. Moreover, the negative financial impact reported in July suggests Northwell is still not out of the woods.
Still, the system has received more than $1.2 billion in CARES Act relief funds, of which $754 million has been applied during the first half of the year. Another $100 million was applied to its July financial activity. And, the company says it has deferred $93 million in payroll tax payments, also as a result of the CARES Act. It is also seeking additional money from the Federal Emergency Management Agency.
Despite all the financial strains, Northwell Health remains fiscally sound. Its total unrestricted cash and investments on hand at the end of June totaled $3.35 billion, up slightly from the end of 2019.