The impact of the economy on healthcare
"We've been working very hard to understand how can healthcare come back," says Jonathan Blum of CMS.
From left: Moderator Anne Snowdon of HIMSS and panelists Andrea Fiumicelli of Dedalus Group, Dawn Samaris of Kaufman Hall, Jonathan Blum of CMS and Paula Chatterjee of the Perelman School of Medicine discuss the impact of the economy on healthcare, at HIMSS23.
Photo: Susan Morse/HFN
CHICAGO - Hospitals have taken a financial hit from continued COVID-19 headwinds, especially due to labor shortages.
Moody's Analytics Chief Economist Mark Zandi, in a preview of his HIMSS23 session on Friday asking if more turbulent times are ahead for healthcare, said that, indeed, tough times are ahead for healthcare, at least near term. His advice to executives is to focus on labor productivity in the tight market. Hospital leaders have that in focus as sessions this week show an increased interest in artificial intelligence and other technology to make the most out of fewer resources.
How inflation and the economy have contributed to financial pressures was the focus of a Views from the Top session at HIMSS23 on Tuesday, moderated by HIMSS Chief Research Officer Anne Snowdon.
"We've been working very hard to understand how can healthcare come back," said Jonathan Blum, principal deputy administrator and COO for the Centers for Medicare and Medicaid Services.
Three years on from the start of the pandemic, actuaries have been pouring over data on the health of healthcare.
"It's been validated by care visits," Blum said. "It's not come back to pre-pandemic levels."
Yet when CMS representatives go to healthcare facilities, emergency rooms are backed up and care providers can't find space, particularly for children, Blum said.
"What they say is, they don't have the beds open," he said. "They can't find the workers. This workforce challenge will take years to come back from."
Inflation has held back capital investment, according to Dawn Samaris, managing director of strategic and financial planning for Kaufman Hall. Kaufman Hall's findings show access to capital and external debt is down, Samaris said
"Borrowing is 20% of normal level," Samaris said. It begs the question, she said, "Are they making the investments in infrastructure that their communities need?"
Kaufman Hall is having more difficult conversations with healthcare executives today, as to what is the path forward, she said. One silver lining is an increased interest in forming partnerships.
Hospitals feel their role is to care for their communities, and they want to do everything as far as what they offer for services, Samaris said. This role may no longer be financially sustainable. They may need to differentiate what they do and offer, she said.
This advice also was raised by Alvarez & Marshal Managing Director Peter Urbanowicz earlier this year. To cut expenses, it may be time for hospitals to rethink being all things for all people, he said saying "CEOs and CFOs must determine how to balance their service offerings against dwindling financial resources."
Paula Chatterjee, assistant professor of medicine at the Perelman School of Medicine, University of Pennsylvania, talked about the challenges for the healthcare safety net.
"A lot of the financial challenges were really prominent for safety net providers that were providing a lot of uncompensated care," Chatterjee said. During the pandemic, a Philadelphia safety net hospital closed, she said, in a move related to market pressures.
Andrea Fiumicelli, CEO of the Dedalus Group, expanded the conversation to the economic impact worldwide, such as the effect of global supply chain disruptions.
Blum suggested a new focus on value-based care to be able to serve those patients most affected by economic and financial challenges in healthcare.
"We have shifted much more care delivery for managed care companies, Medicare and Medicaid," Blum said.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
Mark Zandi will offer more detail in the HIMSS23 session "Keynote: Are More Turbulent Times Ahead for Healthcare? An Economic Outlook (Part One)." It is scheduled for Friday, April 21 at 8:30 a.m. - 10:15 a.m. CT at the West Building, Level 3, Skyline Ballroom, room W375.
