American hospitals and health systems are facing financial struggles like never before.
From the cancellation of non-emergency surgeries to disrupted supply chains and historically high unemployment rates resulting in higher numbers of uninsured patients, the pandemic has created tremendous financial turmoil.
The strategy that more than 70% of hospitals and health systems are turning to is embracing telehealth and other digital approaches, according to a survey conducted by the Healthcare Financial Management Association.
WHAT’S THE IMPACT: WHAT HEALTH SYSTEMS CAN DO TO RECOUP LOST REVENUE
“Telehealth is an area that, in some ways, is going to erode some of the financial hardships that providers may be experiencing by allowing them to resume a lot of those much needed medical services,” said Richard Grape, the director of market planning for LexisNexis Risk Solutions – Health Care, in an interview with Healthcare Finance News.
Grape points out that using telehealth services can allow providers to continue to meet with patients while minimizing the risk of exposure to illness during the pandemic.
Once the pandemic is over, technology will continue to be a key aspect in financial recovery, according to Tim Costantino the VP and head of product for AdvancedMD. He told Healthcare Finance News that telehealth services will be able to help hospitals and health systems handle the increase in demand for care once the backlog of procedures releases.
“So then the technology has two purposes,” Costantino said. “One is to just help the folks that aren’t comfortable [going in to see their doctor] but two, it will help capture more of that revenue when that bounce back comes in.”
Technology is just one aspect of the complete financial recovery, according to Ryan Pollard, the director of product management at AdvancedMD.
Pollard and Constantino agree that the key for practices to regain their financial footing is to be as flexible as possible.
“COVID is creating new constraints on everybody,” Constantino said. “And if you take those restraints and you add a flexible mindset, then that can really lead to innovation for the practice to be successful.”
Practices can be flexible by keeping a stocked resource reserve, being efficient in every process system-wide, making sure that the practice’s priorities are front and center at all times.
Beyond flexibility, Pollard says that making sure patients have positive engagements with the health system is critical.
“The offices that didn’t invest time and realize the opportunity in how they engage the patient are the ones that will probably suffer the most coming out the other end,” he said.
Data transparency is another method that Grape pointed out that can help health systems get back on track. Having access to claims volumes and other clinical information for systems within the region or that have faced similar struggles can lend advice to health systems as they create recovery plans.
“All of those things are very important and require access to data that often is outside the scope of a single health or hospital system’s view,” he said.
Grape expects to see data sharing continue to expand because it leads to quicker, more informed decisions.
When hospitals and health systems will see a full financial recovery from the pandemic remains uncertain.
Within the scope of the pandemic, the number of individuals affected varies by geographic region and these are seeing surges at different rates.
THE LARGER TREND
The American Hospital Association estimates a financial impact of $202.6 billion in losses for America’s hospitals and health systems, or an average of $50.7 billion per month between March and June of this year.
The federal government allocated $175 billion in the Provider Relief Fund of the Coronavirus Aid, Relief, and Economic Security Act and the Paycheck Protection Program and Healthcare Enhancement Act. In an attempt to stabilize hospitals’ finances during the pandemic and ensure that every American could get tested and treated. The Department of Health and Human Services distributed a little more than $100 billion – $50 billion in a general allocation and more than $60 billion in targeted allocations for hot spot hospitals, tribal, rural, skilled nursing, safety-net hospitals, sole Medicaid providers.
HHS is set to give providers another $15 billion later this year.
Even with the relief funding, the AHA recently called for more, citing a projected $323 billion in losses industry-wide due to the ongoing COVID-19 pandemic. AHA President and CEO Rick Pollack said that due to factors such as staffing inadequacies, the cancellation of elective surgeries and shortages of personal protective equipment, U.S. hospitals are anticipating about $120 billion in losses from July to December alone.
Without adequate funding from the government, hospitals will have to rely on their own strategies to recover financially from the pandemic. The HFMA survey found that only 11% of health systems believe that federal funding will be enough to cover COVID-19 costs.
It also shows that 89% of executives expect their organizations’ revenues to be less than they originally predicted for the end of 2020. Half of the respondents don’t expect elective surgeries to resume at pre-pandemic levels until at least the end of the year.
ON THE RECORD
Hospitals are doing “everything that they can” to support patients, Grape said. “There’s at times been a perception of chaos but I don’t think that’s necessarily an accurate reflection of all the hard work that different healthcare practitioners have been doing across the U.S.”
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