Care New England CEO: Crisis is ‘financially devastating’ to hospitals

Business News

PROVIDENCE, R.I. (WPRI) — The head of Rhode Island’s second-largest hospital group is joining the chorus warning that local hospitals face serious financial peril due to the coronavirus crisis.

Care New England — owner of Women & Infants, Kent and Butler — on Wednesday revealed an operating loss of $15.2 million for just the month of March, plus non-operating losses of $29.3 million largely tied to investments.

The state’s largest hospital group, Lifespan, shared similarly gloomy numbers earlier in the day, reporting a $76 million loss for the month of March, including $33 million just from operations.

Care New England President and CEO Dr. James Fanale echoed his counterpart Tim Babineau at Lifespan in citing a perfect storm, as expenses to address coronavirus soar while revenue plunges because of patients being forced to put off elective surgeries and other care. He said the numbers for April will be even worse than March.

“The fact that nobody’s coming to our ambulatory sites, electives are cancelled – it’s all the right thing to do in terms of being prepared for the clinical onslaught of sick patients, but it’s financially devastating to health care systems throughout the country and specifically us here in Rhode Island,” Fanale told WPRI 12 on Wednesday.

The hospital groups are now looking to federal and state lawmakers to help address the shortfalls. Congress has already begun steering emergency funding to hospitals, including an additional $75 billion included in the nearly $500 billion interim relief bill that lawmakers and the Trump administration just agreed on.

Care New England already received $8.7 million in additional federal aid from the $2.2 trillion CARES Act that Congress passed earlier this month, while Lifespan received $25.1 million.

Fanale said Care New England is already having some employees take furloughs, but warned that if significant financial assistance doesn’t come soon, more radical steps would have to be considered “very soon.”

“At some point, elective [surgeries] will open up — probably sooner than later,” he said. “But remember — I don’t think it’s all going to come back right away. If everything came back in May, we’ll struggle through a couple months — even though they’re devastating losses in March and April. But I don’t think it’s going to come back right away. It’s going to be slow.”

“Do we think it will come back to the pre-COVID level of volume? I don’t know,” he continued. “Are patients and families ready to come into the hospital and having things done? They may delay it even further. We don’t know when it’s going to be over.”

Ted Nesi (tnesi@wpri.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

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