The big squeeze: Navigating the confluence of post-COVID challenges

jerome_pagani_squareHealth systems are feeling the squeeze from all sides. Many are still reeling from the revenue losses incurred during the height of the COVID-19 pandemic. The labor shortage has created a positive feedback loop with what looks to be a permanently higher baseline wage for many clinical care professionals. Supply chain issues and inflation continue to drive the cost of both durable and non-durable medical goods higher, even as interest rates are making debt more expensive. Healthcare organizations will, now more than ever, have to figure out how to do more with less – across the enterprise. By prioritizing investments in technology, people, and processes that address multiple factors at once, healthcare organizations can freeze the squeeze and start to thrive. Healthcare leaders can ensure the success of these projects by funding them and involving champions from multiple departments.

The COVID-19 pandemic created a surge in demand for health services, which mostly had to be delivered on top of other types of essential care. This put health systems in the position of having to meet greater demand for services with fewer resources, including people, space, and, in the U.S., financial assets. There are also hints that the care burden (beyond acute COVID-19 infections) is going to be an enduring problem: a recent study in Nature Medicine pointed to an increased risk of cardiovascular disease in those who had recovered from even mild cases of COVID-19 in numbers greater than the current health system can easily support. Cardiovascular disease may be the tip of the iceberg: there are a number of reports of pulmonary, metabolic, and mental health sequelae following recovery from COVID-19. Health systems will need to find better ways to manage chronic conditions (with an eye toward prevention and maintaining health) and ensure individuals are living up to their personal health potential. That requires a modern data infrastructure and, in some cases, the analytic tools that come with a shift to the cloud.

In the U.S., revenue pressures – always tight to begin with – have only worsened. Spikes in case rates have led to COVID-19-specific care that has displaced less urgent, revenue-generating procedures. Hospitals’ operating margins were still negative in the first month of this year (-0.1%, including Cares Act funding) even as case rates have started to fall from their peak. Other countries face challenges that are not directly financial, but that still create pressure on the system. In the U.K., for instance, the backlog in care will not begin to fall for two years. Similarly, in Canada, more than half a million fewer surgeries were performed in the first 16 months of the pandemic. More than ever, optimum performance of operational and clinical functions is essential. Health systems around the world need to make the most of their own data so that they are delivering the most efficient and effective care possible.

The great resignation is hitting healthcare hard all over the world. Even as the demand for skilled and unskilled workers has increased, the number of unfilled positions has grown. In the U.S., the number of healthcare workers who left their jobs increased by 52,000 in November 2021. By 2030, global demand for health workers will outstrip the supply, resulting in a worldwide net shortage of 15 million health workers. Health systems can build technologies and care delivery models that are already in use, including things like the virtual ICU, command centers for monitoring and delivering care, and a shift to the home for less acute types of care that still require clinical professionals (if not a clinical setting). A blended virtual/in-person strategy that brings these technologies out of the hospital and into the home or other non-traditional settings prepares the enterprise for the decentralized care ecosystem as well as delivers efficiencies needed today.

While healthcare organizations are no stranger to the balancing act of delivering high-quality care amidst enormous cost pressures, recent events have created increased pressure on multiple points at once. A key component of every strategy needs to be looking for solutions that address multiple factors at once. Fortunately, we have reached the part of the virtuous cycle of infrastructure modernization where the combination of people, data, and technology are creating changes to what is possible in healthcare. Health systems should look to maximize the investments they have made in data infrastructure, virtual care, and analytic capabilities to optimize operations and efficiently deliver care. This includes carefully considering not only clinical and operational optimization, but how a combination of upskilling existing internal functions and outsourcing can bend the cost curve and allow internal resources to focus on mission-critical functions.

Topics: featured, COVID-19

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