Silver Lining

TASA ID: 15272

Quorom, a 24-hospital system, currently faces bankruptcy in the wake of COVID19. In Washington State, 13 rural hospitals have less than 45 days of cash on hand. While some hospitals will recapitalize their debt structure to avoid Chapter 11, far more will be closing their doors permanently in the months ahead. The most at-risk will be rural hospitals, which are already operating with razor-thin margins and depend on elective surgeries to make up for their high rates of uninsured patients. With most operating rooms handling only emergent cases, the rural hospital is losing its biggest source of revenue. Federal funds may offer some relief, but it is impossible to save the many hospitals that are at risk, especially considering that 30 hospitals already went bankrupt last year pre-COVID.  

While this is all doom and gloom, there may be hope as well. For years, hospitals have been trying to shift treatment of chronic diseases to outpatient settings, with only mild success. Chronic conditions, such as heart failure, COPD and renal disease all make up the bulk of hospital costs, yet have mostly been treated in hospital walls up till now.

In the COVID era; however, these conditions are being managed in-home settings at a higher rate than ever before. Telemedicine, home nursing visits, and remote treatments have all made treatments for these conditions feasible. What seemed impossible to do in years past is now being done by necessity - and working. While there are the inevitable growing pains of adapting to this new way of medical care, the long term results seem promising: more efficient health care, less unnecessary utilization of services and medical care that can be delivered remotely at a much lower cost. What’s left will be a smaller, more acute population that needs emergency care and hospitalization. While there will be fewer of those rural hospitals, there will be fewer patients occupying beds as well. 

It will be important that policymakers should learn from the crisis. The solutions ahead will not be to expand funding to expand hospital capacities, but rather to continue investment going so that our technology-driven, on-demand style healthcare system continues to thrive.

TASA Article Disclaimer

This article discusses issues of general interest and does not give any specific legal or business advice pertaining to any specific circumstances.  Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional.

This article may not be duplicated, altered, distributed, saved, incorporated into another document or website, or otherwise modified without the permission of TASA and the author (TASA Id#: 15272). Contact marketing@tasanet.com for any questions.

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