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A recent headline from the Kaiser Family Foundation should make all healthcare provider executives sit up and take notice: “Early 2021 Data Show No Rebound in Healthcare Utilization.”
As of April 2021, hospital admissions were almost 15% below the level expected based on historical patterns, according to KFF’s analysis of almost 10 million admissions in the Epic system. And if you exclude COVID-19 cases over that time period, admissions were in fact almost 20% below the expected level.
In June of 2021, spending on hospital and ambulatory care combined was 7% below the expected level, according to KFF’s review of Bureau of Economic Analysis data.
These findings are serious business for provider executives. First, this study quantifies the financial hit that hospitals and health systems continue to take from the changing utilization patterns caused by COVID’s public health and socioeconomic effects. Second, the study suggests the possibility of a long-term diminution of inpatient and outpatient utilization, with the serious revenue consequences that shift poses. Third, the study raises the specter of negative health consequences for those who have avoided or missed care during the pandemic.
All of which makes it more important than ever for executives to do the following:
- Achieve bold and continuous improvements in long-term cost structure to match the decline in patient revenue
- Build a product portfolio to take advantage of the accelerating movement from fee-for-service to value-based payment
- Transform the core delivery business for the truly exceptional clinical and financial performance that is required by a more competitive marketplace
The stubbornly persistent effects of this pandemic remind us that the organizational goal in 2021 and beyond is NOT to find the way back to a pre-COVID comfort zone, but rather to negotiate and navigate toward being the best performing healthcare organization possible within a fast-changing and uncertain post-COVID business environment.
Get monthly updates on hospital performance from Kaufman Hall’s National Hospital Flash Reports.