There’s no way around it. The coronavirus pandemic has created a perfect storm that, even as we progress through the vaccination phases, continues to impact the financial stability of the healthcare industry, specifically hospitals.
“Hospitals across the country have faced higher prices for extra staff, especially travel nurses, to ensure enough capacity to fight the virus,” according to Fierce Healthcare. “Hospitals faced plummeting revenues at the onset of the pandemic after they were forced to cancel or postpone elective procedures to preserve capacity to fight the virus. But major cost controls, liquidity and federal relief funds have helped to plug the financial shortfalls caused by the pandemic.”
The healthcare industry is troubled by financial instability in any given year, but the uncertainty has been multiplied and exacerbated by the pandemic. These are some of the pandemic-related challenges we’ve identified; there are, naturally, others that may be more specific to your organization.
“Under an optimistic scenario, hospitals could face a $53 billion total revenue loss in 2021. Under a pessimistic scenario, hospitals could face a $122 billion total revenue loss in 2021,” according to an American Hospital Association (AHA) report. (These numbers consist of outpatient, inpatient and emergency department revenue.)
One of the largest challenges for hospitals throughout the pandemic has been the cancellation or postponement of elective, in-patient procedures. Scheduled hospitalizations for elective procedures continued to decline as the pandemic raged on. “In November 2020, as COVID-19 cases surged, non-COVID-19 hospitalizations started to decline again and were about 80% of predicted hospitalizations by the end of the month. This suggests that people may once again be delaying or forgoing care due to the pandemic, in some cases likely due to hospital capacity constraints,” KFF found.
Throughout the pandemic and today, even as the end seems in sight, hospitals continue to experience:
- Reductions in elective procedures: Typically, the highest revenue service lines, elective surgeries have been outright canceled or severely reduced
- Increases in operating costs: Higher PPE use and higher cost PPE, setting up COVID-19 units, bringing in more bedside staffing
- Shifts in the insured population: Many patients seeking care are newly uninsured as businesses closed or workers lost jobs.
The pandemic caused the healthcare marketplace to change dramatically and contract almost overnight, leaving many hospitals to adjust their business on-the-fly with some more successful than others. Effective or not, the financial and human strain was real. “In 2020, COVID-19 cases and hospitalizations put intense pressure on hospital staff and resources with steep declines in non-COVID-19 patient volume leading to sharply lower revenues,” according to Healthcare Finance News.
Times in the healthcare industry are tough and will remain so in the near-term. Where can organizations begin to recover their losses? Here are a few ideas that can help hospitals not only weather the pandemic storm, but also help improve revenue during this difficult time.
Revisit service lines, add new ones
On any given day, hospitals face many operational challenges, whether it is responding to the competitive landscape vis-a-vis industry consolidation, supply chain disruptions or business lines providing marginal returns on investment.
“COVID-19 disrupted virtually every area of the economy in 2020. As businesses across all sectors hunkered down and focused on core operations and ways to mitigate risk, most health care providers did the same: They concentrated on essential services to treat patients who contracted the virus while temporarily postponing many nonemergent services,” according to the AHA.
It became clear early in the pandemic that some service lines would become severely underutilized while others overutilized. In many cases, hospitals felt ill-prepared to make the shift and simply went into survival mode.
Through its aftermath, the pandemic has shined a light on underperforming business lines.
Now is the time to take action.
We suggest hospitals consider these ways to improve services and add new ones to help drive revenue and quality patient care:
- Review operational expenses in detail and tighten up wherever possible.
- Revisit service lines with marginal returns and close, as necessary.
- Embrace COVID-19 care as a potential new service line or special unit within the hospital. (Tampa General Hospital recently announced plans for a permanent, purpose-built COVID-19 unit.)
- Expand and invest in telehealth services beyond primary care; look toward offering mental health, family medicine and pediatrics.
- Move more outpatient services away from the main hospital and into the community.
These are a few ideas that may help your organization get through post-pandemic times. The underpinning of each idea is data. To help ensure you’re making the right decision at the right time, you must understand the foundational numbers on which the choices are based.
Make the data work for you
No matter how your organization responds to pandemic- or business-related challenges, collecting, understanding and acting on data is the best way out of this financial hole. Without the right data analytics solution in place, the organization can quickly become mired in overwhelming amounts of data that are difficult to access, aggregate or decipher.
Oftentimes an emergency demonstrates just how much more work remains to solve a problem. The pandemic is one such emergency. While EHRs are standard in many healthcare settings, the pandemic made clear that the data within is extremely difficult to access, which can cause clinical, financial and operational challenges.
“Although some health systems are beginning to draw on EHR data to spot coronavirus trends and beneficial treatments, most health organizations around the country cannot readily do so,” according to a KHN article. “Medical data has been hard to tease out because much of it resides in electronic ‘silos’….”
We agree. Data silos remain a significant challenge for those who provide healthcare services. While the pandemic has laid bare the frequent inefficiencies in harvesting data for immediate use, it’s not too late to do something about it.
Integrated data analytics solutions are ready to help hospitals make improvements throughout the business. By applying data analytics to the entire enterprise, hospitals can continue to improve multiple service lines, grow the business by adding new ones, help staff better manage work time, lower costs and improve operations.
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