The Importance of Healthcare Revenue Recovery

At the beginning 2020, no one would have predicted the outcome. 

Now we are halfway through 2020, and hospitals have been going through the uncertain times of the COVID-19 Pandemic.

It is unfathomable that patients have been asked to avoid healthcare facilities when possible, and encouraged to have appointment visits via smartphones and laptops versus in exam rooms. 

Also, some providers transformed hotels, sports arenas, and park spaces into makeshift hospitals, and others called on staff who once had schedules packed with surgeries and other procedures to sew cloth masks and gowns.

And these are just a few examples of how hospitals and other healthcare organizations have adapted to a world in which the COVID-19 contagious and deadly virus exists.

The pandemic has been an unprecedented public health crisis in the US as well as across the world.  The US currently leads the world in both the number of confirmed cases and deaths. 

Throughout all of the chaos, it continues to challenge their bottom lines and future financial stability which have taken a massive hit as they uncover new ways to ensure safe access to care during a pandemic.

Canceled surgeries, personal protective equipment costs, workforce support, and other expenses have already cost hospitals $50.7 billion a month between March and June 2020, according to estimates from the American Hospital Association (AHA).

Efforts to maintain operations during a pandemic, including telehealth implementation and compassionate patient billing, have helped the bottom line from bottoming out for some hospitals. Despite all the efforts healthcare revenue is still suffering.

Unfortunately, the AHA shows hospitals are slated to lose at least another $120.5 billion in 2020 from pandemic-related expenses. Also, losses could get worse if COVID-19 cases surge again, the industry group warns.

Unlike the first wave of COVID-19, however, healthcare organizations may be more resilient. Stabilizing finances and leveraging capabilities developed during the pandemic, like telehealth and patient-friendly collections, providers can help their revenue cycles recover and adapt to a post-pandemic world.

STABILIZING THE HEALTHCARE REVENUE CYCLE

As of now, the most important thing healthcare organizations need to do is stabilize the revenue cycle. 

It’s important to rebuild the clinical capacity, especially for the small procedures and services that drive revenue, this is at the top of mind for hospital leaders coming off the heels of the initial wave of COVID-19.

Also, it is essential to instill patient confidence in resuming these procedures, as well as to ensure the capacity and supplies necessary for elective services. This is key to generating much-needed revenue during and after the pandemic.

It is important to note that healthcare organizations also need to rebuild their financial capacity after such dramatic revenue losses.

Playing defense by assessing liquidity and taking another look at investment plans for the rest of the year will be key to stabilizing the revenue cycle following volume and revenue declines. 

This strategy requires cost reductions across the organization, such as layoffs, furloughs, and other workforce changes. Others may also have to cancel planned capital projects to ensure cash is still king during the recession.

However, these measures are designed to get providers back on their feet. 

Healthcare organizations also must leverage telehealth and other capabilities core to the hospital’s COVID-19 response efforts can help to offset drastic spending reductions with revenue generation now and after the pandemic.

TELEHEALTH DURING AND AFTER THE PANDEMIC

Telehealth has become one of the biggest changes to healthcare delivery coming out of the pandemic.

Telehealth has been a lifeline for hospitals faced with declining volumes and subsequently revenues. But with communities starting to reopen in the face of declining COVID-19 numbers, in-person volumes are slowly creeping back up, but will telehealth remain?

According to hospital leaders, telehealth capabilities have not only become a tool in the back pocket but also a way to rebuild clinical capacity, especially in the aftermath of the pandemic.

Telehealth is a challenge financially because reimbursement rates do not support the level of investment needed to fully develop capabilities.

CMS and other payers increased telehealth reimbursement rates during the pandemic, oftentimes on par with payments for in-person care. CMS is currently assessing new rates after COVID-19 passes but providers are still unsure if payments will be enough to keep robust telehealth utilization going.

In the meantime, hospitals plan to leverage telehealth to smooth out longstanding revenue cycle bumps made worse by the pandemic.

Are we building the next generation of care?

Whether you support the term “new normal” or not, there is no question that the healthcare system and the revenue cycle will not be quite the same after the pandemic ends. COVID-19 has upended the way providers deliver safe, effective care and how they collect revenue for it.

It is imperative for healthcare leaders to develop capabilities during the pandemic like telehealth and community partnerships to help healthcare organizations withstand future crises, as well as align operations with new priorities and demands emerging from the COVID-19 pandemic.

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