How is healthcare reacting?
Healthcare organizations are responding with a heightened sense of urgency. At the time of this writing, many are experiencing peak effect of the infection in their communities, while many more are bracing for impact. Preparing for the COVID-19 pandemic to reach a community, while caring for their patients and staff is a monumental task.
However, surviving the COVID-19 crisis for hospitals and health systems will not depend solely on the quality of clinical care. Understanding the financial impact of public health emergencies, like the COVID-19 pandemic, is imperative. This article discusses the key facets of financial operations healthcare leaders need to think about now.
How does this information impact the financial status of a healthcare organization?
This is a complicated question because there are many unknown variables. Simply put, however, when the peak of the COVID-19 pandemic has passed, hospitals and health systems will face negative margins.
Quantifying the impact of COVID-19 on your organization is imperative.
However, surviving the COVID-19 crisis for hospitals and health systems will not depend solely on the quality of clinical care. Understanding the financial impact of public health emergencies, like the COVID-19 pandemic, is imperative. This article discusses the key facets of financial operations healthcare leaders need to think about now.
What are the most important considerations?
It is important to first categorize your patient population by medical condition, and relative volumes, as well as to distinguish between elective (E) and non-elective (non-E) procedures/services for each category. For each of the new groupings of medical condition (E and non-E), it is necessary to understand expected volume case-mix variance through reviewing historical data.
Additionally, you must analyze the variance of relative expenses – direct vs indirect – to understand what could potentially flex down and up.
Lastly, from a resource consumption and cost perspective, consider the skills and training of your employees. Can clinical staff that traditionally manage elective procedures provide patient care in other areas?
How is COVID-19 impacting hospital operations?*
Here’s what we know now:
(*) This information was collected directly from hospital providers and the sole purpose of this data is to provide insights on the potential financial impact (cost/revenue) of COVID-19.