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HIMSS 2022: Some hospitals are going to close, top economist warns
People could lose access to care in areas that are already underserved, says Diane Swonk, chief economist of Grant Thornton.
Diane Swonk, a leading economist, warned that the COVID-19 pandemic has delivered what may be a fatal blow to some hospitals.
“We’re about to see a lot of hospitals close,” Swonk said.
“That means a loss of access of care in areas that are underserved,” she added.
Diane Swonk, chief economist of Grant Thornton, speaks at the HIMSS 2022 conference Wednesday.
Swonk, chief economist and managing director at Grant Thornton, participated in a panel on the healthcare workforce Wednesday at the HIMSS 2022 Global Health Conference & Exhibition. She said the healthcare system is on the precipice of seeing some hospitals shutting their doors.
Rural hospitals are at particular risk due to the financial challenges they’re experiencing. Healthcare organizations all over America have struggled to retain workers during the pandemic. With some healthcare professionals leaving for more lucrative positions, rural hospitals are finding they can’t compete financially to retain talent.
“It’s really been stunning to see the loss, the acute shortage, especially in rural America, rural hospitals," Swonk said.
Ruby Kirby, CEO of West Tennessee Healthcare’s Bolivar and Camden hospitals, shed light on the pandemic’s toll on rural areas in a January forum with the American Hospital Association. She said they've struggled to hire nurses and respiratory therapists who have left for jobs at staffing agencies. “We cannot compete with the salaries they’re offering,” Kirby said at the time.
If there are hospitals that close due to the pandemic, the ramifications go beyond public health. Hospital closures can do economic damage as well.
“You don’t have a healthy economy without your health,” Swonk said.
Hospitals are also dealing with higher costs, including drugs and supplies.
Swonk said she didn’t see a swift end to the worst inflation since the 1980s. “It will get worse before it gets better,” she said.
The Federal Reserve raised its benchmark interest rate Wednesday, the first time in more than three years the institution has approved an increase in interest rates. Swonk said it was a necessary step as the Fed is chasing inflation.
Even if the economy slows and America does end up in a recession, Swonk said she didn’t think that would necessarily derail workforce shortages in the healthcare sector, “which I really worry about.”
About 18% of healthcare workers have left their jobs in the COVID-19 pandemic, according to a Morning Consult report. Many doctors and nurses have said they are thinking about walking away from their jobs in the next two years.
Swonk is hardly alone in projecting some hospitals are at risk for closure.
More than 500 rural hospitals are at immediate risk of closure due to financial losses, according to a report from the Center for Healthcare Quality and Payment Reform. Another 300 rural hospitals are at high risk of closure due to either low financial reserves or because they rely heavily on revenue from sources beyond patients, such as government aid.
Together, nearly 900 rural hospitals – 40% of the nation’s rural hospitals – are facing a risk of closure, the group estimates.
More than 130 rural hospitals have closed over the past decade.
