https://mailchi.mp/0622acf09daa/the-weekly-gist-december-2-2022?e=d1e747d2d8

2022 has disproven the old trope that “healthcare is recession-proof”. With the average family deductible nearing $4,000, a significant portion of healthcare services are exposed to consumer concerns about affordability. Reflecting the impact of the recession, health systems nationwide have reported sluggish volumes, particularly for elective cases, in the second half of the year.

One COO recently shared, “We’re 15 percent off where we expected to be on elective cases…We didn’t see the usual pick-up in early fall, after summer vacation. I’m not sure if it’s related to the economy, or whether demand changed during COVID, but this decline has eroded any possibility of a positive margin for the quarter.” The recession hit just as providers mostly finished working through the backlog of cases delayed by COVID in 2020 and 2021. 

To determine whether demand declines are related to the current economic environment, or signal real shifts in care patterns, health systems are looking closely to see if the usual end-of-year swell of demand for elective care materializes, as patients max out their deductibles. But even if the demand is there, some systems are worried about being able to accommodate it: “We’ve been so short-staffed for nurses and surgical techs, we’ve had to intermittently take some ORs and units offline…If we get a big December spike in elective care, I’m not sure we’ll have the staff to accommodate it.” Facing the triple threat of sky-high costs, sluggish demand, and a worsening payer environment, the ability to accommodate this demand will be critical to securing margins as providers move into 2023.