BDO

Streamline your referral system It’s important that you streamline the referral process to reduce hurdles and improve patient care coordination Consider exploring how maximizing the value of your EHR system can facilitate a cleaner referral process

Optimize your digital front door Your digital front door should make it easier for patients to schedule appointments, manage their health and understand the cost of their care

Proactively monitor patient acuity and outcome measures Work with the applicable payers to negotiate potential modifications to reimbursement and penalties of risk-based contracts to address the negative trend

• Demand decreases could lead to reduced revenue
• This is especially true for discretionary services
• Providers may have to cut certain services, due to both concerns with financial sustainability and staffing shortages
• Insurance coverage gaps could lead to lower reimbursement rates for providers, particularly as more patients find insurance through the marketplace or Medicaid
• Bad debt will likely increase, making it more difficult to collect payment for services rendered
• Days of cash on hand will likely decrease, leaving less liquidity for healthcare providers to work with and potentially triggering debt covenants
• Bond ratings may go down as debt covenant violations increase, resulting in higher interest rates
• Costs are likely to increase, especially labor and supply costs
• In addition, due to pandemic pressures, there will likely be fewer options to reduce expenses compared to previous recessions
• Providers may struggle to make contractual payments such as lease payments
• This is especially true for providers in the elder care space, such as skilled nursing facilities
• Private funding is likely to decrease
• In particular, we could see reductions in private grant awards in the coming months

Assess your key financial metrics Make sure you aren’t too heavily debt financed with variable rate debt

Prioritize investments and funding Ensure you’re committing funding to critical projects related to business continuity At the same time, look for projects that can be delayed It’s a good idea to re-engage with investment advisors to re-evaluate your investment allocations

Re-examine your revenue cycle Consider optimizing or investing in Clinical Document Integrity (CDI), Coding, and Revenue Integrity programs Managing denials, streamlining business office functions and analyzing third party payer contract performance are important strategies to improve revenue performance

Focus on strategic cost optimization rather than on cost cutting While there may be opportunities to identify and reduce certain high expenses, in the long-term you are likely to have more success with an optimization- focused approach

Consider whether consolidation could help you achieve long-term financial stability Explore options like M&A or consolidating real estate to see if there are opportunities to improve stability and performance

Operations and Supply Chain

• Operating costs will likely increase and options to reduce them will be limited
• Operating margins are likely to decline, especially if we continue to see high compound annual growth rates (CAGR) for drugs and labor costs and vendor contracts tied to the Consumer Price Index (CPI), forcing providers to adopt more aggressive procurement policies
• Supply shortages are likely to continue and become more severe, which could impact clinical outcomes
• Operational technology shortages are expected to continue, making it difficult for providers — especially small- and mid-sized community hospitals — to access practical tech solutions
• Certain vendors may go out of business, particularly niche vendors, further exacerbating supply difficulties across the industry

Explore how EHR optimization can reduce operating costs You may be able to simplify workflows, reduce the amount of duplicative work that’s required by both clinicians and support staff, and reduce the need for other software solutions, leading to an overall reduction in operating costs

Consider working with a group purchasing organization (GPO) Working with these organizations can support your supply chain management and help expand access to hard-to-find supplies

Explore lower-cost supplies This may entail moving away from physician preferred supplies Work with physicians to standardize supply, device and implant choices and optimize volume pricing

• New competitors may enter the healthcare space
• Privately funded, techenabled competitors may be able to offer lower costs to consumers
• Innovation priorities will likely change
• Certain innovation projects may be delayed or abandoned entirely
• Telehealth use could stall depending on payers’ willingness to reimburse for telehealth visits

Calculate the ROI of your current innovation investments Which ones will drive the most value in the immediate future? Are there any that could be particularly helpful in supporting your organization through the downturn? Shift your dollars in that direction

Consider service line and care model innovation For example, you could explore remote care monitoring and hospital-at-home solutions to expand patient access opportunities