The financial impact of COVID-19 on a surgical department: The effects of surgical shutdowns and the impact on a health system

BACKGROUND: The COVID-19 pandemic resulted in sweeping shutdowns of surgical operations to increase hospital capacity and conserve resources. Our institution, following national and state guidelines, suspended nonessential surgeries from March 16 to May 4, 2020. This study examines the financial impact of this decision on our institution’s health system by comparing 2 waves of COVID-19 cases. METHODS: The total revenue was obtained for surgical cases occurring during the first wave of the pandemic between March 1, 2020 and July 31, 2020 and the second wave between October 1, 2020 and February 29, 2021 for all surgical departments. During the same time intervals, in the prepandemic year 2019, total revenue was also obtained for comparison. Net revenue and work relative value units per month were compared to each respective month for all surgical divisions within the department of surgery. RESULTS: Comparing the 5-month first wave period in 2020 to prepandemic 2019 for all surgical departments, there was a net revenue loss of $99,674,376, which reflected 42% of the health system’s revenue loss during this period. The department of surgery contributed to a net revenue loss of $58,368,951, which was 24.9% of the health system’s revenue loss. Within the department of surgery, there was a significant difference between the net revenue loss per month per division of the first and second wave: first wave median –$636,952 [interquartile range: –1,432,627; 26,111] and second wave median –$274,626 [–781,124; 396,570] (P = .04). A similar difference was detected when comparing percent change in work relative value units between the 2 waves (wave 1: median –13.2% [interquartile range: –41.3%, –1.8%], wave 2: median –7.8% [interquartile range: –13.0%, 1.8%], P = .003). CONCLUSION: Stopping elective surgeries significantly decreased revenue for a health system. Losses for the health system totaled $234,839,990 during the first wave, with lost surgical revenue comprising 42% of that amount. With elective surgeries continuing during the second wave of COVID-19 cases, the health system losses were substantially lower. The contribution surgery has to a hospital’s cash flow is essential in maintaining financial solvency. It is important for hospital systems to develop innovative and alternative solutions to increase capacity, offer comprehensive care to medical and surgical patients, and prevent shutdowns of surgical activity through a pandemic to maintain financial security.