No crystal ball has enough power to make predictions for 2021 since the pandemic is still surging in parts of the world. As we slowly return to some sense of normalcy, however, you might be wondering about the outlook for your organization’s revenue this year.
Will this year be better than the last?
Here we’ll review a report showing the financial implications COVID-19 might have for health organizations in 2021. We’ll also provide some strategies you might want to use to improve your revenue cycle.
How quickly healthcare organizations see a healthy bottom line depends on several things.
A new report from KaufmanHall released in Feb 2021 outlines three factors that are important to consider to understand the financial health of a healthcare organization. They include:
- Recovery of hospital volumes: The degree and pace at which inpatient, outpatient, and emergency department volumes return.
- COVID-19 vaccine progress: The availability of vaccines, the speed of distribution, and the prioritization of different populations for vaccination.
- A decline in COVID-19 cases: The degree and pace at which COVID-19 cases decline, based on public use of social distancing and achievement of herd immunity.
This report provided optimistic and pessimistic scenarios to estimate the amount of revenue that hospitals and health systems could expect to lose in 2021.
The Optimistic Scenario
This assumes that hospitals experience a consistent, complete recovery of patient volumes, vaccine distribution and administration go smoothly, and the country sustains a continued ramp-down of COVID-cases. If that happens, hospitals and health systems could face a $53 billion total revenue loss in 2021.
The Pessimistic Scenario
This assumes that hospitals and health systems see a slow, partial recovery of patient volumes, vaccine rollouts are delayed with continued logistical challenges and the country experiences continued cyclical COVID-19 surges. If this happens, hospitals and health systems could face a $122 billion total revenue loss in 2021.
You read that correctly, both the optimistic and pessimistic scenarios project revenue losses.
An article in Health Affairs summed it up this way, “We expect suppressed spending to continue at least into 2021 until a significant portion of the US population is vaccinated.”
Faced with increased spending on staff and equipment, plus a loss of income from canceled surgeries, many healthcare systems are looking to streamline their billing and collection process. After all, this is not the time to have a lot of aging claims.
Improving Revenue Cycle Management
There are numerous ways to improve your organization’s revenue cycle. First,start with clear communications with your patients. If they understand their bills, they are more likely to pay promptly. Next, stay current with the constant regulatory changes. For example, does your billing staff understand the new telehealth billing guidelines?
Often, healthcare organizations realize outsourcing their revenue cycle management will provide the best outcome. If that’s the case for you, read this first to learn the three questions to ask before partnering with a revenue cycle vendor.
Contact Us For Your Revenue Cycle Management Needs
To learn more about Credit Management Company and how we can help you improve your revenue cycle, contact us.