Weekly News Roundup: September 18, 2020
An Urgent Imperative for Health Systems
As the coronavirus continues to threaten the financial stability of health systems, there is an urgent imperative to formulate an effective financial response. In this week’s news roundup: inside the trillion dollar quest to bring hospital care to your home; three ways to leverage data for an effective financial response; how hospitals’ financial recovery is tied to the health of the economy; and why the pandemic has had dramatically different financial consequences for payers and providers.
The $1 Trillion Quest to Bring Hospital Care to your Home
Few would argue that hospitals aren’t important—see: the coronavirus pandemic. But one major concern with hospitals, and the hospital business, is that all those hospital buildings end up adding to the total cost of providing healthcare. Hospital buildings add a huge amount to medical bills. Moving care to people’s homes could dramatically reduce those costs.
An Effective Financial Response to COVID-19: Three Ways to Leverage Data
In a stable healthcare environment, financial leaders generally use historical data to create a financial strategy, forecast volumes, and predict community needs. For example, a chief finance officer would use data from previous years to predict next year’s budgets, as well as which services to offer and where to provide them. With a novel coronavirus challenging health systems like never before, it is time for a new financial response to COVID-19.
Hospitals’ Financial Recovery Will be Tied to the Health of the Economy, Before and After COVID-19
Financial Futures are at stake as hospitals continue to grapple with the COVID-19 pandemic and widespread unemployment has gripped the country.
Typically, a hospital’s budgeting processes aren’t affected by widespread unemployment, but in this prolonged economic downturn, two factors — the loss of employer-sponsored health insurance and reduced consumer spending — has greatly hindered the financial performance of the nation’s hospitals.
Why the Pandemic has had Dramatically Different Financial Consequences for Payers and Providers
About 1.4 million healthcare workers lost their jobs in April. The American Hospital Association said that collectively, the country’s hospitals suffered $200 billion in financial losses because of COVID-19 from the beginning of March through the end of June. Based on a sampling of 800 hospitals, it’s estimated that hospital operating margins fell by nearly 300% in April 2020 relative to April 2019. Of course, for payers the lack of utilization had just the opposite effect on their finances.