Looking ahead to a year of belt-tightening


https://mailchi.mp/92a96980a92f/the-weekly-gist-january-14-2022?e=d1e747d2d8

We’ve been having “year ahead” discussions with our health system members over the past few weeks, although it’s been difficult for some to carve out time for planning in the midst of the Omicron surge.

One common theme is that, from a financial perspective, 2022 is expected to be a more difficult year. For many systems, despite the trying COVID situation, the past two years have been financial record-setters. In 2020, systems benefited from a massive infusion of COVID relief funding from the government, and in 2021, they continued to enjoy enhanced reimbursement due to COVID, plus had a resurgence of volume as patients sought care that was previously postponed.

2022 looks to be a more “normal” year—meaning a return to the financial pressures of pre-pandemic times. Those include mounting price compression from payers, an accelerating shift of care from inpatient to outpatient settings, and increasing competition for patients from disruptors and others. At the same time, patient acuity will continue to rise, with patients presenting sicker and with more comorbidities. The cost of caring for those patients will escalate, as the workforce shortage drives labor costs higher and supply chain woes persist.

We’d anticipate a year or more of belt-tightening among many health systems, as they adjust to the post-pandemic environment.

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