Kenneth Kaufman (left) and Eric Jordahl
For five months, hospital leaders have been responding to what will likely be the biggest challenge of their careers: managing the operational and financial threats from the COVID-19 pandemic.
An already difficult environment is likely to become even more challenging this fall and into 2021. Surges and resurges of infection, ongoing macroeconomic threats and widespread uncertainty about the stability of regained volumes and revenue are likely to persist for some time to come.
Against this backdrop, achieving credit and rating “success” will require significant performance improvement. Given revenue uncertainty and potential volatility, the focus must be on containing expenses and carefully allocating capital and resources. More than ever before, success in these areas will be a rating differentiator.
The right skill sets
Preparing for these realities starts with critically assessing every aspect of the organization’s toolkit — from financial resources to decision-support infrastructure to management capabilities. This preparation itself will yield clarity, which can help guide a more proactive and productive next conversation with rating agencies, investors and other external constituents. The difference in outcomes between preparing well and preparing poorly will be material.
The ability of executive teams to successfully multitask will be a core driver of success. In this context, multitasking refers to the ability to both confront the myriad of new pressures COVID-19 is producing right now and reposition the risk profile of the organization to be prepared for what is coming next. Organizations have no choice but to address these two priorities simultaneously. And their success will heavily influence whether they thrive or struggle in a post-COVID-19 environment.
Not all healthcare leaders and organizations possess the full range of multitasking capabilities needed. Those that do will be in a good position to succeed in the current and emerging environment, whereas those that do not will likely struggle. The first order of business for CEOs and hospital boards, therefore, should be to critically assess where their organization resides on this key skill continuum and how to build those skill sets and improve the organization’s performance.
Integrated analytics and decision support required
Enterprise-oriented frameworks that bring analytics and decision-support under a common umbrella are another critical element of improving multitasking. These frameworks, ideally limited to just a few critical needs, can create clarity around resource utilization and risk management, offering senior executives the greatest amount of management leverage. Ultimately, CEOs should be then able to create a “multitasking enterprise,” where downstream activities roll up to a manageable and common number of decisions regarding how to deploy resources and manage risk.
As part of this approach, organizations that embrace predictive methodologies can begin to better understand the potential long-term impact of various externalities. At the same time, such methodologies can help identify internal actions to mitigate those external risks. For example, through careful financial planning, organizations might realize the need to move swiftly to secure financing for the next 18 months, or address looming expense problems before they wreak havoc.
In the early days of the COVID-19 pandemic, many disciplined, resilient organizations quickly and simultaneously tackled a wide range of unexpected clinical needs. At the same time, these organizations addressed a rapidly deteriorating financial picture and crafted strategies for the post-COVID-19 world.
An imperative for addressing unprecedented challenges
As the external environment grows even more uncertain, hospitals will need to take their multitasking to an even more sophisticated, enterprisewide level. Moving forward, success will require continuous and coordinated monitoring of the external environment, timely evaluation of the associated implications and proactive steps to mitigate the many varied and unpredictable risks of a world that is more volatile than any we have ever experienced.