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As it braces for COVID-19 surge, Pardee sees regular revenue drop

While it ramps up unprecedented safety precautions, prepares for a surge in patients and juggles calls to 14 different vendors seeking COVID-19 test kits, Pardee/UNC Health is seeing regular patient revenue drop precipitously, the hospital board was told Wednesday.

During a regular meeting of the Board of Directors, CEO Jay Kirby and board members broadly praised the work of the UNC system, Pardee and its clinical staff, Henderson County and its emergency management officials and the community to respond to the pandemic. But Kirby warned that the growing trend of people staying home translates into fewer visits to urgent care clinics and physician practices, the usually steady profit engines for the county-owned hospital.
As of Friday, March revenue had plunged 50 percent “because patients are sheltering in place. They are not getting out, and we don’t want to bring respiratory related illness into our urgent cares. Unfortunately, COVID has impacted our operations.”
Emergency rooms visits, which generally average 89-95 per day this time of year, have dropped to 43 a day. Physician practice revenue is down 35 percent.
“So all of this is beginning to impact the volumes of the hospital,” Kirby added. Expecting “a banner month” in March, “we budgeted it big.” By mid-month, “our volumes started to drop and our revenue started to tail off.”
Responding to the COVID-19 threat is an opportunity to serve that Pardee is proud to accept, he said, the challenge comes “at the same time our revenues are dropping as people are not accessing health care as they have normally and customarily.”
The downturn in patient revenue comes amid what had been a profitable year for Pardee. Finance Committee Chair Chip Gould reported that through February — the first two-thirds of its fiscal year — in-patient revenue was 4.6 percent ahead of budget and 3.9 percent ahead of last year. ER visits were 1.1 percent under budget but 1.8 percent higher than last year. Overall patient revenue was up 7 percent and the profit margin was 2.7 percent, up from the projected 1.8 percent.
“Hats off to the finance (officials) and everyone else that toted the line prior to where we are today to keep us in good position,” Gould said.

Case numbers going up

On the COVID-19 front, Dr. Chris Parsons, Pardee’s medical director for infectious disease, reviewed the hospital response to the coronavirus threat up to now and its plans going forward.
When Parsons told the board that North Carolina had 398 cases as of Tuesday, Kirby broke in to share the updated numbers  24 hours later.
“Today, more than 500 and we’ve had our first reported deaths, so it’s a tremendous increase in one day and should give you some idea how fast this is growing and will continue to grow,” the CEO said.
While the state’s large population centers in Charlotte and the Triangle have had the highest number of cases “it’s not surprising that we’ll start to identify more patients with COVID-19 as it moves into mountainous area of the state,” Parsons said. The health care team has “moved on to mitigation, essentially meaning that containing the virus is no longer possible, so the most effective general measure is to stop the spread of the disease in all of its forms. The main message from the medical community would be stay at home if at all possible.”

'A storm on the horizon'

Pardee has been using LabCorp. to test samples taken locally, which requires a 2-3 day turnaround time. It is contact with a different private lab and expects to receive 400 test kits that can be read in-house to produce a result in under two hours. So far, Pardee has an adequate supply of personal protective equipment.
“We’re working to keep the hospital supply and ER supply in good shape and it is in good shape as we speak,” Parsons said. Physicians are focusing on hospitalized patients and those in at-risk groups, including nursing home residents, front-line doctors and nurses, people with compromised immunity systems and people over age 65, especially those with heart or lung conditions or other medical problems. “It’s an evolution almost daily,” Parsons added. “We’re hopeful with the in-house test with the rapid turnaround, that’ll help people in the community.”
The Pardee help line has been fielding about 175 calls a day from people seeking a COVID-19 test or asking about one. A screening site Pardee set up on March 15 tested more than 300 people before running out of test kits.
“It was a tremendous effort,” Kirby said. “We had calls from Buncombe, Advent, Transylvania and Polk County as to what our process was. We were the first to come on in Western North Carolina. … Right now we’re moving to surge planning,” and bracing for “increased pressure on all entry points,” including the ER, patient practices, urgent care centers and testing sites.
“Yesterday we had 400 cases (in the state) and today we find ourselves with over 500 in just one day,” he said. “The incidence and prevalence of this is ramping up. There is a storm on the horizon and it is coming.”