New York–Presbyterian lost $128.5 million in the first three months of 2020 as the loss of revenue from postponed procedures and higher staffing and supply costs from COVID-19 wreaked havoc on the finances of the well-heeled health system.
The loss, which represented an operating margin of -5.9%, was preceded by a $29.4 million operating profit in the first quarter of 2019, according to its financial statements.
The financial struggles of New York–Presbyterian, one of the region's most financially stable systems, are a sign of the strain COVID-19 has placed on area hospitals. The losses will be partially offset by federal aid that was awarded after the first quarter concluded.
Because of COVID-19, New York–Presbyterian said, it postponed elective inpatient and outpatient procedures, transferred patients to make beds available for a surge in patients, increased its number of staffed beds and created six field hospitals.
Revenue at the 10-hospital system increased 1.2%, to nearly $2.2 billion, during the quarter, while expenses climbed 8.6%, to around $2.3 billion. New York–Presbyterian operates hospitals in Manhattan, Brooklyn, Queens and Westchester County as well as hundreds of medical offices.
Its unclear whether the backlog of surgeries and other procedures that were postponed due to COVID-19 will lead to higher revenue in the later part of the year. It's possible some patients will opt to skip or further postpone nonurgent care.
The health system said the level of COVID-19 costs were higher than it predicted in March.
"Expenses for personal protective equipment (PPE) and incremental and backfill personnel, including clinicians from outside of NYPH, required to meet inpatient demand, as well as expenses for transportation, housing, food and child care resources to support that personnel, greatly exceeded estimate," NYP wrote.
NYP received a combined $567 million from programs created by the federal Cares Act. It received the funding in April and May, which means the money won't be reflected until it releases second-quarter financial statements.
New York–Presbyterian said it spent $250 million more than expected on operations because of the pandemic and $175 million on capital improvements related to the surge in patients. It plans to seek money from FEMA for additional costs.
The system's assets still exceeded liabilities by nearly $8.4 billion on its balance sheet as of March 31, however.
This article was originally published in Crain's New York Business.