Hospital Financial Recovery from COVID 19 – Focus on the Core Business
Hospitals and health systems are under siege from multiple fronts during this pandemic. Those in virus hot spots are stretched thin with full beds of COVID-19 patients, dwindling supplies, and burned out caregivers. Some systems have adequate supplies and are effectively managing the increased census. And in some areas, hospitals have very few COVID patients leading to unused capacity and burning questions around if the spike will ever come.
What is universal is that COVID-19 care is undercompensated and the hiatus of elective surgeries has stung hospital financials in a way that will make it hard to recover. This situation has caused the furloughing of workers and the shuttering of ambulatory care sites. According the Wall Street Journal, the hospital industry is in a tail spin contracting at a rate of $45 Billion per month. Moreover, recovery will be neither swift nor consistent.
Of course, in this “Captain Obvious” moment I’m not telling you something you don’t already know. The go-forward strategy must include a business building approach to keep the core businesses operating effectively. What exactly does that look like? These areas of focus can aid in an accelerated recovery:
Medically triage the patients – Elective doesn’t mean unnecessary. Patients with a need have to been seen and prioritized.
Financially triage the service lines – Those with the highest contribution margin should be restarted first. It’s no secret that these service lines bear the load of most of the organization's profitability.
Optimize access for safety and availability - Certainly, the virus will still be present but ambulatory care sites are usually a safe and effective off campus location to minimize contagion and ensure trust in patients. Further, ensuring every OR suite is running at full capacity, maybe even 24 hours a day, is important.
Prioritize the referrals – Give the most important physicians and specialty groups priority access to care. Align the referral targeting to those of the service line priorities and drive the referral volume to the most important service lines.
Of course, FTE reduction and resource cuts will not make this easy. It will be a long road back that will require patience, making due with less and extreme planning. By sticking to the basics of what is important for growth, these fundamental ideas may offer a starting point for turning the corner to financial recovery.
About SystemCare Health
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SystemCare Health is leading the way in physician productivity strategies offering strategic ramp up services, business planning, strategic physician relations, referral development and ROI measurement. Clients include: Geisinger, Valley Health (VA), Hackensack Meridian Health, UHS, Vanderbilt Health, Guthrie Health and MedStar Health.