Ballad Health details financial impact of COVID-19 in third quarter

David Floyd • Updated May 6, 2020 at 8:27 PM

As the system also reports improvements in patient outcomes, Ballad Health detailed Wednesday the financial hit it’s taken through the end of March as a result of the novel coronavirus (COVID-19) epidemic — an impact that it also expects to see in the fourth quarter.

“Because of the unique nature of Ballad and how we have some hospitals that help subsidize other hospitals, we’re probably in better shape than most rural systems,” said Ballad Health CEO Alan Levine during a press conference, “but we are still struggling with all the same manifestations of issues that other rural systems struggle from, which is lack of population growth, declining inpatient use rates.”

Ballad reported a net operating loss of $11.2 million for the third quarter, which compares to prior year operating income of $7 million.

“That’s about an $18 million swing on our operating results from the prior year,” Levine said.

On a year-to-date basis, Levine said the system is reporting a $1.1 million operating gain through March versus $14 million in the prior year, adding that the system went from a 1% operating margin in the same year-to-date period a year ago to roughly a 0.1% margin.

“Obviously we can’t predict what the fourth quarter will look like with April and the unknowns, but right now it’s safe to say that based on what we know today, those losses will increase in the fourth quarter,” Levine said.

According to a news release issued Wednesday, Ballad reported $483.7 million in net patient revenue, which is $30.9 million lower than the same period last year. The system said 80% of that decline can be attributed to COVID-19.

Beginning around March 17, the system said it started to experience a “slowing” of elective procedures and diagnostic services. Effective March 23, the system said it complied with federal and state guidelines to stop all non-emergent, elective procedures.

Beyond elective procedures, Ballad said it experienced a drop in other types of medical treatments. The system said physician practice, urgent care and other routine medical visits declined “precipitously.”

Because of the pandemic, Levine noted that Ballad would be treating the end of the third quarter as the system’s “year-end” for financial purposes. The fourth quarter, he said, contains a lot of “noise.”

Among other factors, the system said fourth quarter results will likely reflect the loss in volumes stemming from the drop-off of elective procedures in April and the now gradual ramp-up of those procedures.

Noting that the numbers reflect the period before the impact of COVID-19, Ballad Health also reported that it has seen improvement across several quality measures prioritized by the state of Tennessee and federal government.

The system said it has seen improvement in 13 of 17 measures when compared to baseline numbers before the merger between Wellmont Health System and Mountain States Health Alliance. Ballad said it’s now among the top 10% of heath systems in the nation in five of those metrics.

“While we’re dealing with the pandemic, we can’t forget about our underlying mission, which is to take care of everybody,” Levine said Wednesday. “Not just people with COVID-19 but all the people who rely on our services.”

Elective procedures

Ballad Health restarted elective procedures on Monday, and over the past few days, officials said the system has been gradually increasing the number of surgeries it’s performing.

“We will continue adding more cases that require longer lengths of stay for our patients,” said Chief Operating Officer Eric Deaton. “That’s gone very, very well.”

Before they come in for their procedures, Deaton said the system is continuing to conduct COVID-19 tests for all patients undergoing elective surgeries. Ballad officials have said any patient who tests positive for COVID-19 will have their procedure delayed.

Ballad Health is also asking for blood donations to Marsh Regional Blood Center, a process that Deaton said has been hampered to some degree by COVID-19.

“It’s important as we continue to take care of patients, as we increase the number of surgeries that we have, that we have blood donations continuing to increase,” Deaton said.

Blood donations are currently occurring by appointment only, which people can schedule by calling 423-408-7500.

Other news

Ballad Health is caring for 11 COVID-19 patients at its facilities and is investigating seven other potential cases. If needed, the system has 300 beds available for COVID-19 patients and about 245 ventilators. The system reports it has tested more than 7,000 people across the region for the virus.

Last month, the system announced it would be partnering with the Mayo Clinic on a study of convalescent plasma.

According to the Mayo Clinic, people who have recovered from COVID-19 have antibodies to the disease in their blood, which doctors call convalescent plasma. Levine said Ballad has so far treated six people using this method.

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