As COVID-19 swept the country in March and April, Louisiana's Ochsner Health saw a "constant increase" in coronavirus patients. At its height, the health system was treating 973 COVID-19 patients on April 7.
New Orleans-based Ochsner said its COVID-19 census has since settled down to 294 as of May 6. New Orleans has seen the second highest per capita COVID-19 rate of any metropolitan statistical area in the country, a disproportionate share of Louisiana's nearly 33,000 COVID-19 patients. Ochsner said has it treated over 60% of COVID-19 patients in the New Orleans area.
The health system, which declined to comment beyond the filing, has worked with the governor's office to ensure Louisiana has enough intensive care beds and with the Trump administration on a program that allows hospitals to share ventilators.
That's all taken a major financial toll on the 11-hospital not-for-profit system, the largest in the Gulf Coast region which also has 35 affiliated hospitals. Ochsner reported a $32.8 million operating loss in the first quarter of 2020—a 3.4% loss margin—compared with income of $13.3 million, a 1.5% margin, in the prior-year period. That's a $46.1 million year-over-year operating decline in the first quarter, which ended March 31.
The pain came on two fronts. The health system accrued less revenue from elective procedures postponed after Gov. John Bel Edwards' state-at-home order took effect March 23. It also saw higher expenses related to treating complicated COVID-19 patients.
Even though the stay-at-home order was only in place during the last week of March, inpatient surgeries declined 8.3% in the quarter year-over-year. Emergency room visits were down 4.8%. Clinic visits fell by 1%.
Ochsner still managed to generate almost 9% higher revenue in the quarter ended March 31 year-over-year, mostly due to higher premium revenue. Revenue in the quarter was $965 million.
Expenses rose 14.3% to $997.8 million in that time. Within that, salary and wage expenses jumped nearly 12%, which Ochsner said was partially related to additional staffing needed to meet increased demand. Total providers increased 9.1%, or by 160 full-time equivalents, in the quarter, including nearly 10% more physicians. The health system also paid about $3.5 million in additional hazard and overtime pay for workers treating COVID-19 patients. Supply expenses grew 16%, which Ochsner said was mostly due to the increased volume of infusion drugs.
Louisiana's stay-at-home order expires May 15, although Ochsner began performing time-sensitive elective procedures on April 27.
Ochsner said it received $166.3 million in grants from the Coronavirus Aid, Relief, and Economic Security Act and about $202 million in accelerated Medicare payments. The health system has implemented a hiring freeze on non-clinical employees and cut capital spending.
Ochsner said the pandemic will not affect its pending merger with Lafayette General Health to create a 33-hospital system. The deal, announced in September 2019, is now expected to close by the end of the third quarter. Officials originally expected it to close in spring.