Around this time last year, El Camino Health was hemorrhaging as much as $24 million each month as patient numbers dwindled and costs soared. And its investments in the stock market, while normally fruitful, showed staggering $71.8 million losses in March 2020 alone.
Steeling for a slow and grueling recovery from COVID-19, El Camino Health officials planned for the economic pain to continue, with deficit spending through the end of 2020 and meager gains through the start of this year. Instead, the El Camino Hospital and its network of clinics have rebounded far more quickly, showing a big surplus despite the grim predictions.
The upshot is that El Camino Health was expecting to lose just shy of $31 million by the end of March for the fiscal year ending June 30, but instead ended up more than $47 million in the black. The organization's investments also soared to new heights, and are expected to yield a massive windfall independent of the hospital's financial performance.
It's good news for the independent hospital, which braced not only for not only a slower recovery but subsequent waves of new COVID-19 cases dampening down on profitable activity like elective surgeries. Hospital finances are already notoriously hard to predict, and factoring in when and how badly coronavirus cases would surge in Santa Clara County made it all the more difficult.
"The budget was made in a period of significant unknowns," said Carlos Bohorquez, El Camino's chief financial officer. "Clearly the organization rebounded a little bit quicker than anticipated."
It was hard to be optimistic at the start of the pandemic. Between mid-March and May of last year, the number of patients showing up for care plummeted by anywhere from 60% to 70%, Bohorquez said, while essential supplies like personal protective equipment (PPE) skyrocketed to as much as eight times the cost. All told, he said the hospital has spent $40 million in extra costs in response to the pandemic.
Hospital officials were able to partially offset the spending spree with $19.7 million in federal financial relief from the first CARES Act, passed in late March 2020.
The budget assumed that El Camino was going to be in deficit spending through January this year, and wasn't likely to to break even by June. Instead, it posted a surplus starting in July 2020 and has stayed profitable since, with a spring-loaded return of patients once Santa Clara County ended its lockdown and elective surgeries resumed.
Regional COVID-19 case counts spiked last summer and over the winter, but not to the degree and the length that hospitals elsewhere in the country experienced. And while the hospital's designated intensive care unit for the virus was packed during December and into January, it never reached the same level of desperation in other hospitals.
People were quick to come back for routine medical procedures, Bohorquez said, but he hesitated to describe it as a return to normalcy. Emergency room visits, for example, have lagged behind and remain 21% lower than last year. And the patients who do show up are sicker than before, indicating people may be delaying care.
While hospital officials can only speculate on the reason for the decline, he said it could have to do with lingering safety concerns during the pandemic -- something he said patients should not worry about.
"We have committed a significant amount of effort to ensure that every protocol is followed, and our patients, physicians and staff feel like the hospital setting is clean and in many cases better than any other place in the community," he said.
Where El Camino shined the brightest financially this year was in its investments, specifically its massive reserve fund that's tied to the performance of the stock market. It may have lost ground when the stock market tanked in March 2020, but it has since climbed to its largest annual windfall in the hospital's history. As of March 31, El Camino's non-operating income -- which largely captures its investment performance -- was estimated to be just shy of $175 million. That's seven times as much as officials were expecting this fiscal year, and already surpasses the $132 million record in 2018.
The investment money is typically added to the reserve and used to fund new equipment or pay for capital projects, which have been ongoing at El Camino Hospital's Mountain View campus. Now in the latter stages of developing the campus, El Camino Health's board of directors approved $149 million for the expansion of the Women's Hospital building, and recently completed construction of a new behavioral health building.