Patients are more receptive to technological advances than ever, thanks to the rapid growth in telehealth over the past two years.
Hospitals and health systems are seeing better revenues than in 2020, but overall performance is still below pre-pandemic levels.
It’s no secret that COVID-19 has delivered a serious financial blow to health systems nationwide, one that has persisted beyond expectations. In 2020, hospitals stopped almost all non-urgent, non-COVID care. The result was a drastic decrease in volumes and revenues, with expenses remaining high. Over the course of 2021, the nation dealt with further waves of the Delta variant and Omicron variant, pushing back recovery even farther.
Compared with other sectors, health care margins have always been razor thin, with the median operating margin in the United States hovering at about 3.5%. This lean position doesn’t leave much cushion for dramatic upheavals like a prolonged nationwide pandemic. Hospitals experienced hundreds of billions of dollars in losses in 2020 alone.
While some sources of revenue all but disappeared, others, like telehealth, have flourished. This trend continued over 2021 as the Delta, then Omicron variants spread across the country, causing renewed fear, stopping outpatient and elective procedures, and squeezing even more out of a weary health care system.
The Long Way Back
With Omicron now waning in mid-2022, outpatient volumes and revenue have finally seen the bump they have been waiting for, adding hope that the months of negative operating margins will soon be over.
Kaufman Hall’s National Hospital Flash Report (April 2022) is optimistic in several areas:
- Median changes in operating margin rose 32.7%.
- Adjusted discharges increased 18%.
- Gross operating revenue was up 14%.
- Total expense per adjusted discharge decreased 9%.
The median Kaufman Hall year-to-date Operating Margin Index was still at -2.43% in March 2022. This was due, in part, to the January Omicron surge, but hospitals are still struggling with several other issues, some that have spun off from COVID-19. Inflation is causing increased supply costs and as supply chain issues persist, a national labor shortage presents a daily struggle.
Recovery from the pandemic years is proving to be slower than hoped for, with less-than-favorable conditions continuing. It’s essential now for organizations to boost efficiency, using technology to make smart use of slim staffing pools and resources. Solutions like tele-triage in busy emergency departments make the best possible use of resources to move patients through the system without sacrificing patient safety or satisfaction.
Today every operational decision matters when it comes to putting hardworking health care organizations back in the black. As much as recovery depends on the return of patient volumes, it also depends on saving on expenses and creating new efficiencies, strategic initiatives that can be effectively targeted and sustained with the right data analytics solution.
Looking Toward the Future
Any current discussion about increasing the efficiency of health care organizations involves talk about technology. Solutions often are complex and don’t always integrate well. The challenge is carefully evaluating the technological innovations that most benefit both clinical workflows and patient outcomes.
Health care is an ecosystem, one that has untapped potential to benefit greatly from technology. Patients are more receptive to technological advances than ever, thanks to the rapid growth in telehealth over the past two years. The future of health care means using every opportunity to reshape health care systems into patient-centric workflows that not only get us back to where we were, but that dramatically improve patient and provider experience.
For more information about how to create efficiencies that translate into better financial margins, more efficient workflows, and safe patient outcomes, contact d2i. You can speak to our domain experts or request a demo to get an under-the-hood look at our powerful performance analytics solutions.