Aspen hospital revenue slid in 2020 due to pandemic
As revenues dropped in Aspen’s retail, lodging and restaurant industries in 2020 because of pandemic-related restrictions and shutdowns, so too did activity at Aspen Valley Hospital.
Patient revenue missed budget by 13.6% in 2020 — generating $136.1 million compared to the projected $157.6 million — due largely to setbacks that included a six-week suspension of elective surgeries. The hospital also spent more money than it generated last year, with $96.3 million in total operating revenue and $110.2 million in total expenses.
That’s based on AVH financial documents and presentations given last week by hospital CEO David Ressler and Chief Financial Officer Ginette Sebenaler to the hospital’s board of directors at its monthly meeting.
“This year obviously was an anomaly because of the COVID virus,” Ressler said at Monday’s meeting.
Because of the virus, AVH’s operational capacities have been under close attention since the World Health Organization in March 2020 declared the global outbreak of COVID-19 cases a pandemic.
Along with regional hospitalization levels, operating levels at the 25-bedroom facility were part of a mosaic of metrics the the Pitkin County board of health considered when implementing its health orders over the past year.
At the same time, the hospital remains on the front lines with Pitkin County Public Health in the local fight to contain the virus’ spread. That has included setting up a respiratory tent last spring, helping facilitate widespread community testing for COVID-19 and setting up free clinics in the upper Roaring Fork Valley, and administering vaccinations to Pitkin County residents earlier this year.
The hospital’s delivery room also had a good amount of action in 2020, with 211 babies born in 2020, 15.3% more than the 183 newbies in 2019.
“We’re kind of all over the place year over year,” Ressler said regarding deliveries.
Yet in a year of great demand for AVH services to combat the virus, hospital revenue slid, starting when Pitkin County was basically locked down and the hospital voluntarily suspended elective surgeries from March 16 through April 30. The suspension, noted Sebenaler, was “something we had never done before.”
The drops in ER visits, surgeries and other services were due mainly to “the community’s level of activity being down throughout the year,” Ressler said.
Hospital admissions fell 18.9 percent from 954 in 2019 to 774 in 2020, while Emergency Department visits declined from 8,430 in 2019 to 6,703 in 2020, a 20.5% reduction.
“This, in 13 or so years I’ve been involved in tracking the volumes and statistics, this is the first time we’ve ever had such a variation or difference from our typical utilization of the Emergency Department month over month,” Ressler said.
Another big moneymaker — surgeries — dropped 9.2% from 1,395 in 2019 to 1,266 last year.
That figure was actually not bad, Ressler said, considering the suspension of elective procedures in the second half of March and all of April. The hospital also got a boost in surgeries when it joined forces with The Steadman Clinic officially on Dec. 1, Ressler said.
When the reality of the pandemic set in, hospital officials predicted in April that 2020 would end $21.7 million shy of projected patient revenue. They weren’t far off the mark: The year’s $136.4 million in patient revenue fell $21.3 million short of the goal.
Besides patient revenue, other sources included $445,749 in sales from the hospital cafeteria and $434,272 in employee-housing rental payments, for example.
Net patient service revenue amounted to $92.8 million in 2020, 7.1% lower than the projected $99.9 million. Last year’s write-offs included $1.6 million to charity and $3.1 million in bad debt.
The hospital’s total operating revenue was $96.3 million, 7% off the projected $103.5 million.
The hospital’s total expenses — ranging from salaries to legal work to patient-care supplies — were $110.2 million in 2020. Unexpected expenses associated with patient-care supplies, $12.3 million, were due to increased costs for PPE supplies and testing related to COVID-19, officials said.
The hospital also was approved on May 1 for an $8.25 million loan as part of the federal Paycheck Protection Program.
“Based on standard PPP eligibility rules, Aspen Valley Hospital District’s total 2019 payroll expenses were approximately $39.6M in order to qualify for the PPP loan amount received,” according to FederalPay.org.
Because the amount was more than $2 million, the hospital will undergo an audit, Sebenale said.
The hospital also received a $7 million grant through the CARES (Coronavirus Aid, Relief, and Economic Security) Act.
With such non-operating revenue as the hospital mil levy, which generated $8.5 million in 2020, and seven-figure support from the Aspen Valley Hospital Foundation, the hospital operated at a total loss of $162,004 in 2020, according to AVH financial data.
