When asked once whether a spike in business would lead a company to hire more staffers and build out its infrastructure, the company’s chief executive replied, “You don’t build a church just for Christmas.” While hindsight is 20/20, this may have been good advice for the healthcare industry, which is going to grapple with a reduction in patient volume once the coronavirus pandemic is over, according to several published reports.
It is becoming increasingly clear that businesses, especially those in the healthcare industry, are never going to go back to the way things were and this changed landscape is going to be the name of the game when the coronavirus pandemic is finally over. For healthcare providers, that means patient volume that is somewhere between 90% and 95% of what it was before the pandemic hit, according to a study conducted by Strata Decision Technology. While it might not sound like much, a drop of a much as 10% in volume is not something that just can be absorbed into a company’s operations.
While many providers were caught off-guard by the pandemic, and many are still focused on managing themselves during the crisis, they need to also prepare themselves for the future, and that future clearly has fewer patients than the provider had in the past.
Outpatient volumes — which declined by 56% when the pandemic hit the United States in March — have rebounded, but inpatient volume and emergency room visits are still well below pre-pandemic levels, according to the study.
Lower patient volumes place more strain on a provider’s operating margins, which were already razor-thin to begin with. A drop in revenue means that providers will have to reduce expenses to offset the lost money coming in the door. Providers have furloughed staff or taken other measures to reduce expenses, but those are short-term band-aids and not the long-term solutions that are needed. And many of the short-term gains were eaten up by having to spend more in other areas, like personal protective equipment.
A drop in revenue means that healthcare providers are also going to have to optimize their bad debt collection and revenue cycle management operations, to collect as much as possible. This is even more important given the increasing number of individuals who are now without health insurance.
Nobody wants to be the grinch at this time of year, and with proper planning, nobody may have to.
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