Though the pandemic may be fully in the rearview, healthcare organizations continue to feel the impact. While hospitals and clinics initially dealt with the immediate surge of COVID-19 cases, they are now grappling with lasting effects on revenue, operational costs, and overall financial stability. The prolonged period of reduced revenue and increased costs resulted in new "Long COVID"—an extended financial impact stemming from the crisis.
In the wake of the pandemic, many healthcare organizations experienced a dramatic decline in non-COVID patient volumes. Routine procedures, elective surgeries, and preventative care visits were postponed or canceled, leading to significant revenue losses. Although the numbers for last year are promising, illustrating an increase in admissions and preventive screenings over that of pre-pandemic levels, higher volumes in certain areas, such as emergency departments, are proving difficult to manage.
Better patient volumes should be a cause for celebration, but the reduction in the workforce brought on by the pandemic has caused growing care demands to become a crisis. Since 2020, high turnover rates have led to increased hiring and training costs, and providers are compelled to offer better wages and benefits to attract and retain talent, putting further strain on operational budgets. Though we've added a million workers, the industry still faces a deficit of 100,000 in 2028. A reality that will continue to impact financial viability for years to come.
The financial hardship brought on by COVID isn't limited to care.
General operational costs and shifts in reimbursement models that contributed to the burden during the pandemic are still an issue. The high inflationary period that formed in reaction to the COVID economy will have a delayed impact on the healthcare sector (historically 2-3 years), putting providers in line to feel the full effect of the exacerbated price of medical supplies, equipment, and prescription drugs in the coming years. Payer-provider contracts, which were already leading to uncertainty around revenue streams due to their persistent reevaluation, will have to be renegotiated to cover these costs. However…
A 2 or 3% increase, which is often what most payers will agree to, may not even cover the full impact of inflation if they agree to any increase at all.
These lingering effects make it difficult for healthcare organizations to return to pre-pandemic profitability. Moving forward, striking a balance between delivering quality care and maintaining fiscal sustainability will be essential for long-term success. Providers must focus on sustainability and operational efficiency to help offset the financial strain. Many organizations can find relief by embracing technology and third-party partnerships—whether by enhancing care models with innovative services or optimizing processes to reduce the burden of full-time employees (FTEs). In this fully transformed operational landscape, healthcare organizations must think outside the box to recover from "long COVID."
Small strategic changes can have a significant impact. Connect with a solution consultant today to learn how automation technologies and targeted access services could reduce the burden at your practice.