The financial challenges caused by the COVID-19 pandemic are forcing healthcare organizations and physicians across the nation to explore ways to cut costs and recover lost revenue.
Lower patient volumes, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for healthcare organizations. U.S. healthcare organizations are estimated to lose more than $323 billion this year, according to a report from the American Healthcare organization Association. That total includes $120.5 billion in financial losses the AHA predicts healthcare organizations will see from July to December.
Congress has allocated $175 billion in relief aid for healthcare organizations and other healthcare organizations, but it isn’t enough to cover the lost revenue and higher expenses some are experiencing due to the pandemic. To help close the gap, many healthcare organizations and other types of providers applied for and received Medicare advance payments in the first quarter of this year as a lifeline during the pandemic, and they’re now required to repay those funds.
Though the path to financial recovery isn’t clear for healthcare organizations because the duration and intensity of the pandemic is unknown, there are several steps healthcare organizations can take now to help offset financial damage tied to COVID-19. Below is an overview of some of those steps and key initiatives.
1. Healthcare organizations must leverage RCM technology. The financial strain caused by the COVID-19 pandemic makes it more important than ever for healthcare organizations to get paid for the services they provide. From avoidable errors that occur during registration to filing claims for payment outside of the timeframe established in the payer contract, there are many reasons healthcare organizations see their claims denied. Healthcare organizations should leverage technology to automate processes, such as prior authorizations, to help avoid claim denials.
Healthcare organizations can also leverage technology to provide a more patient-centered RCM process. For example, advanced technologies such as predictive analytics and artificial intelligence can help determine which patients would benefit from a payment plan. Healthcare organizations and other healthcare providers should focus on eliminating any unnecessary friction to create a convenient payment and billing experience for patients.
2. Telehealth capabilities are a must-have moving forward. More Americans are using telehealth services due to the COVID-19 pandemic, and these services are poised for growth. The telehealth market is set to be valued at nearly $176 billion by 2026, according to a report by Global Market Insights. For healthcare organizations and physicians, telehealth is now a must-have. In fact, 36 percent of consumers said they would leave their current physician for one who offered access to virtual care, according to a survey by Black Book Market Research and Sage Growth Partners.
3. Healthcare organizations tasked with convincing patients it’s safe to come back. Healthcare organizations across the nation saw patient volumes and revenues sharply decline due to the COVID-19 pandemic. In late June, hospitals and health systems reported average declines of 19.5 percent in inpatient volume and 34.5 percent in outpatient volume, relative to baseline levels, according to an AHA report. Though most healthcare organizations have restarted elective procedures that were suspended earlier this year, they’re now faced with the challenge of ensuring patients feel safe seeking care in the midst of a pandemic. Patient communication is key to overcoming this challenge. Healthcare organizations should send patients specific information about cleaning routines, patient volume restrictions, screening practices and other processes in place to ensure their safety.
4. Healthcare organizations cut costs to help offset losses. Healthcare organizations across the nation are looking for efficiencies and cutting costs. Delaying capital projects, temporarily reducing executive compensation and furloughing or laying off workers are all steps healthcare organizations are taking to recover from the financial damage linked to the pandemic. Though it’s necessary for some healthcare organizations to implement cost reduction initiatives, most explore all other options before cutting jobs.