The height of the coronavirus (COVID-19) pandemic left little unchanged in its wake. However, for hospitals and the healthcare system, it brought significant challenges operationally, emotionally, and financially. 

<p>
  The height of the coronavirus (COVID-19) pandemic left little unchanged in its
  wake. However, for hospitals and the healthcare system, it brought significant
  challenges operationally, emotionally, and financially. Now, despite the
  availability of vaccinations and what seemed to be the start to an end of the
  pandemic, the delta variant has once again placed hospitals and other
  facilities in the center of the storm.
</p>

<p>
  While ensuring the best possible care for the communities they serve is the
  top concern for healthcare providers and leadership, health executives are
  also mindful of the global pandemic&#39;s current and future financial
  struggles.
</p>

<h2>Financial Concerns.</h2>

<p>
  As more than
  <a
    href="https://www.cnn.com/2021/08/26/health/us-coronavirus-thursday/index.html"
    target="_blank"
    >100,000 COVID-19 patients</a
  >
  were hospitalized for the first time since January 30, healthcare facilities
  experienced both
  <a
    href="https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-summary-august-2021?utm_source=agcy&amp;utm_campaign=2021-nhfr&amp;utm_medium=pr&amp;utm_term=august-2021-nhfr"
    target="_blank"
    >patient volume declines and financial setbacks</a
  >
  in July as COVID-19 cases spiked due to the delta variant.
</p>

<p>
  Compared to pre-pandemic levels seen in 2019, hospitals saw lower margins and
  patient volumes. Despite revenues rising above 2019 levels, the gains were
  often offset by expense increases. According to a recent
  <a
    href="https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-summary-august-2021?utm_source=agcy&amp;utm_campaign=2021-nhfr&amp;utm_medium=pr&amp;utm_term=august-2021-nhfr"
    target="_blank"
    >report</a
  >, operating margin was down 7% in the first seven months of this year when
  compared to the first seven months of 2019.
</p>

<p>
  In short, hospitals could lose between $53 billion and $122 billion due to the
  lingering effects of COVID-19, depending on the speed of vaccine distribution
  and complete recovery of patient volumes, according to a repot by Kaufman Hall
  commissioned by the American Hospital Association (AHA).
</p>

<p>
  The report details several factors that will continue to depress hospital
  finances this year, stating, &ldquo;Whether recovery from COVID-19 in 2021 is
  relatively rapid or relatively slow, America&rsquo;s hospitals will face
  another year of struggle to regain their financial health while providing
  necessary care and services to a nation that is continuing to experience the
  effects of an unprecedented pandemic.&rdquo; Executives must now consider what
  the financial picture for the industry looks like post-COVID-19 and where they
  can add new sources of revenue.
</p>

<h2>Workforce Implications.</h2>

<p>
  Hospitals and health systems are concerned about having an adequate supply of
  health professionals to meet the needs of their patient population amid the
  prolonged pandemic. While some facilities have been disproportionately
  affected by the new surge in the delta variant of COVID-19, others have
  remained less impacted. As a result, demand for staffing varies widely in
  different parts of the country. Some regions are seeing tighter supply
  constraints than others, which has been exacerbated by the quarantine of so
  many healthcare professionals. All of these forces are creating additional
  pressures on wage expectations and the movement of talent.
</p>

<p>
  The supply of healthcare talent is declining across the nation as many
  providers fall ill themselves, experience burnout and fatigue, leave their
  positions due to lack of PPE supplies, or a range of other factors. With many
  nursing education programs on hold because they are unable to provide students
  with clinical experience in the current climate, healthcare leaders fear
  workforce shortages could impact the industry for years to come.
</p>

<h2>Shortage of Experience.</h2>

<p>
  One of the biggest concerns in the early stages of the pandemic was just how
  prepared were American hospitals and health systems to weather this and other
  types of disasters. In a&nbsp;<a
    href="https://www.ncbi.nlm.nih.gov/pubmed/30234908"
    target="_blank"
    ><strong>2017 article</strong></a
  >&nbsp;published in the Journal of Emergency Management, research findings
  showed that while 80% of hospitals had disaster plans in place, only 17.5%
  felt their disaster plans were &ldquo;very sufficient&rdquo; and did not
  require any revisions. While some large health systems have command centers
  already established to handle emergency management response at this level,
  many others do not have the capabilities, the resources, or the specific
  expertise.
</p>

<p>
  This situation presents an opportunity to identify best practices in emergency
  management protocol, to shore up executive training and establish ongoing
  education and recruitment practices to keep their organization ready should
  another global health crisis occur.
</p>

<h2>Concerns for Rural Hospitals.</h2>

<p>
  These challenges impact the entire healthcare sector, but rural hospitals are
  uniquely impacted. Prior to the pandemic, rural hospitals faced financial
  struggles and a dire shortage of healthcare providers. In fact, 67 percent of
  rural areas are considered Health Professional Shortage Areas, and the
  majority of areas continue to be the most underserved.
</p>

<p>
  The financial impact of COVID-19 on rural hospitals is two-fold. First, rural
  health care systems in the U.S. have unique organizational, clinical, and
  financial vulnerabilities that make it more challenging to withstand surges in
  COVID-19 cases. These vulnerabilities affect care quality and delivery and
  further hinder financial stability. Second, spending for PPE and other medical
  supplies has increased. Considering their small size and the fact that they
  already had low occupancy rates and thin margins prior to COVID-19, this
  scenario of declining revenue combined with increased expenses has created
  financial challenges for rural hospitals.
</p>

<h2>Looking Ahead.</h2>

<p>
  Despite many economic stimulus packages and bailouts for hospitals, there are
  still concerns about what the U.S. will look like after the pandemic. As
  healthcare organizations face the arduous but necessary reflection on their
  level of preparedness, successes and lessons learned while uncertainty remains
  a second wave, leaders will also need to look to the future to adjust
  practices, policies, and planning in a post-pandemic world.
</p>


Cross Country Healthcare

Delta Variant-Related Surge Exacerbates Strain On Hospital Financial Recovery

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