The Covid-19 pandemic has strained the financial health of healthcare providers and healthcare systems around the world. Northwell Health, a 19-hospital health system based in New York, reported a loss of $329m in H1 2020. Also in H1 2020, Cleveland Clinic, an 18-hospital health system based in Ohio, had an operating loss of $241m. As the pandemic continues to affect patient volumes in emergency departments and elective surgeries, healthcare providers will continue to struggle to maintain revenue streams in the face of rising costs.
Northwell Health reported that although its H1 2020 revenues rose to $6.3bn from $6.1bn in H1 2019, it also saw a 10% rise in costs coupled with a 10% drop in patient revenues, resulting in a net operating loss. Northwell Health attributes the financial strain to the Covid-19 pandemic, and more specifically to the drop in patient volume. The health system has received $1.2bn in funding under the US Coronavirus Aid, Relief, and Economic Security (CARES) act, which has helped offset these losses. Other health systems have been forced to furlough workers, such as Cook County Health in Chicago, which saw a $187m budget shortfall for FY 2021. Cook County Health noted that increased demand for charity care pressured their budget for next year.
A recent public poll conducted by GlobalData between May 1 and July 16 suggests that while patient volumes are recovering, there is a high demand for elective procedures to start back up within the next two months, as 81% of respondents indicated that elective procedures should start immediately, within a month or two, or after a couple of months.
As patient volumes begin to recover and health systems are able to increase patient confidence in their services, GlobalData expects that providers will focus on increasing patient volumes and cost-cutting measures to protect their financial health during the prolonged Covid-19 pandemic. GlobalData expects that increased telehealth adoption and use will continue throughout the pandemic and beyond. Additionally, healthcare providers and health systems that are successfully able to leverage technology to provide more efficient population health measures, increase staff productivity, and streamline revenue cycle management will be better positioned to weather the financial hit from Covid-19.