In early March, American hospitals began bracing for what would become the worst public health crisis in more than a century. Leaders put elective surgeries on hold to increase capacity for the potential surge of COVID-19 patients as clinicians got up to speed on treatment protocols. For hospitals in viral hotspots, many worst fears were realized.
Healthcare’s response to this crisis has been heroic, and the toll on the system is substantial and unfolding. The road to recovery will be long. Many hospitals were already operating on thin margins before the arrival of COVID-19. Now, with revenue-generating procedures on hold, the scal ssures they faced have spiderwebbed.
Becker’s recently spoke with two healthcare strategy experts from Strata Decision Technology, a company that helps hospitals plan, analyze, and perform using its cloud-based nancial analytics and performance platform. Here Liz Kirk, senior vice president of strategic services, and John Baker, senior director of continuous improvement, answer questions about the biggest challenges healthcare organizations will face on the road to COVID-19 recovery, the best strategies for resuming elective surgeries and how leaders can position their organizations for success in the wake of tragedy.
Note: Responses have been edited for length and clarity.
Question: What are the biggest challenges hospital leaders are likely to face as they work to help their organizations recover after the first COVID-19 surge?
Liz Kirk: Recovery is going to be incredibly dif cult. Healthcare leaders are going to have to gure out how to open beds and operating rooms and limit the spread of COVID-19 while managing a staff that’s probably exhausted, fearful and has maybe been impacted personally. At the same time, hospitals are going to have to make up for lost revenue and try to bring in patients.
At Strata, we work with hospitals across the country to help them with nancial planning, so we’re really focused on the nancial aspect of this recovery. What we’re seeing is whether hospitals are in a COVID-19 hotspot or not, they’re experiencing a nancial strain because they’ve cleared out their inpatient cases, minimized outpatient visits and halted elective cases. We’re seeing net revenue decline across the board and, at the same time, we saw operating expenses increase in most health systems in March. We expect to see a decrease in operating expenses in April month-end nancials, but don’t expect that they will drop nearly as much as the top line declines. We’re seeing operating margins in the red across the country — no one is in the positive. Hospitals will need senior leaders steering the ship toward nancial recovery. They cannot return to business as usual. Business as usual won’t get these organizations out of the hole.
Q: As the funding is being made available by the federal government, how can hospital leaders ensure that they receive the full amount of reimbursement they are due?
John Baker: They’ve got to be diligent and they’ve got to be organized in the way they are documenting the treatment of COVID-19 patients and their expenses related to COVID-19. The cleaner they are on their data capture and the management of their analytics, the easier it will be to not only acquire the necessary funding but defend their documentation down the line.
Q: With regards to resuming elective surgeries, how can leaders prepare their organizations to resume them safely?
JB: They’ve got to understand all the different variables involved. They have to account for all the contingencies down the road to make the approach smart from both a safety and nancial perspective. I don’t want our clients to think that to get out of this crisis, they need to staff way up and churn patients through. This could result in further losses. This approach has to be much more nuanced than that, and we’re working on models to account for all the different variables so our clients can be as nancially smart and safe as possible.
LK: With the current levels of unemployment, I think the likelihood of all deferred surgical cases coming back is low. So, from a nancial perspective, it’s going to be important for organizations to have exible staf ng models that account for that change in case volume so staf ng makes sense from a nancial perspective.
Q: How can hospital leaders ensure their strategy sets their organization up for success?
LK: Once things begin to settle, leaders need to come back together and have an honest conversation about what was learned during this crisis and how these lessons might translate into greater ef ciency moving forward. I think this is really going to be a turning point for many organizations. They are going to have to make some tough decisions, take rm actions and hold people accountable. They need to take a command-and-control approach to nancial recovery just as they took a command-and-control approach to COVID-19 preparedness, otherwise they will realize the nancial results they need.
JB: There’s that saying that if eighty percent of success is showing up, then twenty percent is following up. I honestly think that applies here. Leaders just need to show up, be engaged and make themselves available to their teams. I don’t want this to come across as overly simplistic, but if you’re the leader of an organization and you want to have an impact, show up, display that leadership and folks will start to fall in line behind you to rally to the new challenges presented by COVID-19.
Healthcare organizations moved mountains to get ready for this crisis, and leaders are going to have to harness that same focus and energy and bring it into the recovery process.