With Hindsight Truly 2020, the Path to Financial Recovery is Clear.

Financial Recovery
By:
Cross Country Healthcare
Posted:
May 04, 2021 05:10 AM (GMT-04:00)
Categories:
Updates

As healthcare organizations and the rest of the world anxiously awaits the universal rollout of the COVID-19 vaccine to bring some sense of normality, the reality is the future will look anything but “normal.” We have a long way to go to rebuild the healthcare sector, to learn from the spotlight it shown on existing problems in the healthcare system and to apply innovative, disruptive thinking to the new challenges it has presented.

Perhaps one of the most fundamental aspects of recovery is financial in nature. Regaining pre-COVID revenue and embarking on the discovery of new revenue streams is front and center. As Cross Country Healthcare examined detailed research, interviews, and analysis to identify six crucial trends impacting healthcare recovery in its newly-released white paper, Forever Altered: Adapting to a Post-Pandemic Healthcare Landscape, it became clear the path forward must be paved with new delivery channels, operational advancements, and a hard look at changing patient behavior and expectations.

The Financial Fallout for Healthcare.

Calling it the “greatest financial crisis in our history,” the American Hospital Association estimated that healthcare providers would lose at least $323 billion in 2020 – and that was before the country was hit with a late-year surge in COVID-19 cases. Further, a direct estimate from the BlueCross BlueShield Association found that 3.1 million people lost their employer-sponsored health insurance between March and September of 2020.

Due to the drop in employer healthcare spending in 2020, PriceWaterhouse’s Health Research Institute (HRI) is projecting 2021 several medical cost trends relative to 2020 healthcare spending:

  • High-spending scenario: Spending grows significantly higher (10 percent) in 2021 after down in 2020.
  • Medium-spending scenario: Spending grows at roughly the same rate (6 percent) in 2021 as it did from 2014 to 2019 and was expected to in 2020.
  • Low-spending scenario: Spending remains dampened (4 percent) in 2021.

As healthcare leaders develop their go-forward plans based on any number of medical spending scenarios, there is evidence pointing to several revenue streams poised to drive much-needed revenue into the healthcare system this year.

  1. Telehealth.

Telehealth has been gaining ground slowly for years. COVID-19 forced its rapid adoption by both consumers and clinicians, many of whom had never used it before. In 2021, HRI expects telehealth to settle in as a viable and desirable alternative to in-person care.

Providers will need to redesign the patient experience for a post-pandemic world around a heavily virtual system that can address chronic conditions and more complicated patients. They will need to redeploy resources and workforces to cater to virtual health.

  1. Mental Health.

Demand for mental health services will likely grow even faster due to COVID-19 and the associated economic impact. A study by the Kaiser Family Foundation conducted in March 2020 (after the pandemic had triggered stay-at-home orders, widespread layoffs, and general anxiety), 45 percent of adults reported their mental health had been negatively affected. Further, in a recent survey by HRI, 12 percent of consumers with employer-based insurance said they sought help for their mental health due to the pandemic.

Healthcare systems and providers should consider building out virtual mental health services and integrating them with broader primary care services to improve outcomes and spending on individuals with a comorbid mental health condition. Screening for depression and anxiety has become more critical than ever. Providers should consider expanding screenings beyond annual checkups and do them during all patient visits.

  1. Screening, Testing, and Tracing.

Healthcare organizations will need to consider the required workforce to continuously deliver vaccines to the U.S. population over the next 11-12 months. In fact, during 2009-2010, state and local vaccine programs had to triple the number of providers they had a relationship with to distribute 2009-H1N1 vaccines. An already-taxed healthcare staffing market going into upcoming mass vaccination efforts will likely create a workforce demand surge that healthcare organizations will need to prepare for.

Electronic tracking and contact tracing will also become more prevalent. Health systems will need to determine whether to use these by faculty and staff to better manage subsequent workplace infection waves.

  1. Elective Procedures.

Rebuilding clinical capacity, especially for the small subset of procedures and services that drive revenue, is top of mind for many hospital leaders. Now that most states have lifted restrictions on elective surgery, hospital leaders across the country have been rushing to implement ramp-up strategies. In addition to addressing the growing patient backlog, the motivation to restart elective surgery includes tempering revenue shock from the decreased surgical volume, a substantial contributor to the margin of hospitals and medical centers.

Instilling patient confidence in resuming these procedures and ensuring the capacity and supplies necessary for elective services is key to generating much-needed revenue during and after the pandemic. One recent study predicts that the post-pandemic backlog will exceed one million cases for spinal fusions and joint replacements in orthopedic fields.

Recover and Rebuild.

Just how much healthcare spending rebounds this year is subject to many variables complicated by the pandemic and a strong recovery won’t be automatic or take place overnight. It will demand careful, smart planning that takes into consideration the many evolving challenges and opportunities in a post-pandemic world.

There are, however, bright spots for spending and recovering revenue in the year ahead. To assist organizations in moving forward with operational and strategic changes as the pandemic starts to wane, sign up to receive our extensive, evidence-based guide – Forever Altered: Adapting to a Post-Pandemic Healthcare Landscape.

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