Leading with Digital to Drive Financial Performance Post-COVID19

June 2, 2020

A digital-first strategy is a way to navigate through the COVID-19 storm.

Healthcare providers are facing the immediate priority of providing safe care to patients and also the existential threat of staggering financial losses. Estimates now point to industry-wide losses of $200 billion and revenue declines of up to 70% because of reduced ambulatory volumes, deferred surgeries, and elective procedures. Compounding the situation is the expectation that the payer mix will tilt towards less-profitable Medicaid patients due to the shocking increase in unemployment and loss of employer-sponsored insurance.

To address these financial challenges, healthcare providers have rapidly implemented digital solutions, which can deliver care with greater safety, scale, and flexibility than health systems ever could through traditional means. Progressive systems view digital as a long-term driver of financial performance, not just a tool to manage COVID-19. A digital-first approach will help health systems create the foundation for a financially sustainable business model to emerge stronger from this crisis and future-proof them for what lies ahead.

This long-term, digital-first business model looks like:

● Delivering a significantly higher proportion of care virtually, responding to a permanent consumer shift and meaningfully lowering the cost to serve
● Optimizing care triage, navigation, and treatment to deliver the right care at the right time in the most convenient, lowest-cost setting
● Automating the revenue cycle to reduce costly bottlenecks from prior authorizations and denials and patient payment processes
● Using analytics to drive predictable, faster, and consistent outcomes for populations, creating a foundation for success in value-based care and lowering the total cost of care
● Creating a hyper-personalized experience for consumers that drives new growth and loyalty
● Unleashing a digital workforce by automating repetitive, administrative tasks, increasing capacity and reducing clinician burnout

While health systems work towards this long-term, digitally enabled future, there are actions they can take now that lay the groundwork for financial success and digital prowess.

Immediate opportunities include:

● Forecasting and budgeting. Revisit plans and account for new near-term needs and long-term uncertainty. Be purposeful and precise when modeling the substitution of in-person visits with virtual visits in service line financial planning, taking advantage of expanded reimbursement and changing consumer expectations.
● Asset management. Reevaluate the real estate portfolio and other fixed assets. Consider eliminating outpatient office space that may no longer be required with a permanent increase in virtual visits.
● Reimbursement for digital utilization. Make sure to continuously monitor CMS and payers for new reimbursement rules and limits. While consumers have responded to digital solutions with enthusiasm and demand, reimbursement rules have been slower to catch up.
● Operations and throughput. This is a chance to get smarter and leaner. Health systems can utilize existing digital tools within the EHR or other digital solutions to support tracking of bed and equipment availability. Look to implement capacity management solutions to manage capacity across a system’s entire footprint in a market, including inpatient beds, emergency departments, retail clinics, pop-up testing facilities, and outpatient offices. These solutions will prepare systems to re-start ambulatory and elective procedures and will be invaluable to prepare for a potential second surge.
● Partnership and vendor network. Review existing digital vendor contracts to understand costs and timing to scale existing pilot projects for key tools like virtual visits. Take advantage of any license and implementation discounts being offered by digital solution companies for key solutions. Work with your vendors to prioritize and fast track implementations for key digital services such as virtual health or remote monitoring.

This is a critical time for leaders to catalyze enterprise transformation efforts that radically improve the financial performance, consumer reach, and operational sustainability of the organization. Seize this moment to reimagine and revamp the business and operating model of healthcare to lead with digital.