Although healthcare organizations remain focused on managing the day-to-day realities of COVID-19, they are also eyeing the future and thinking through how the crisis will impact them clinically, financially and operationally. To gain a better understanding of healthcare executives’ perspectives on the pandemic, the Healthcare Financial Management Association (HFMA) surveyed 174 industry leaders in early May. Participants included C-level executives, vice presidents and directors across hospitals, health systems and group practices. Guidehouse analyzed the research conducted by HFMA, and the following sections discuss key takeaways.
Most leaders anticipate major revenue and volume drops
Nearly nine out of 10 healthcare executives predict their organizations’ revenues will be lower at the end of 2020 as compared to pre-COVID-19 levels. While almost two-thirds expect decreases of greater than 15%, one in five forecast decreases of more than 30%. On the positive side, respondents expect the long-term view won’t be as grim, foreseeing only 3% lower revenue one year from now.
One of the reasons behind the revenue decreases is the precipitous drop in elective procedures as organizations have had to cancel nearly all non-emergency activities to keep patients and staff safe. “Although organizations are starting to schedule these procedures as states open up and stay-at-home orders lift, the volume remains relatively low,” says Rick Gundling, senior vice president, healthcare financial practices for HFMA. “In some cases, this is because people are hesitant to visit a healthcare facility and are delaying non-emergent procedures until they feel more comfortable. In other instances, they have lost insurance coverage due to job loss and are delaying elective procedures until such a time when they can better afford them.” It is unclear when volumes will be restored. Half of executives surveyed anticipate it will take through the end of the year or longer for pre-COVID volumes to return.
Figure 1: How do you expect your future revenues to compare to pre-pandemic revenue levels?