While patient volumes aren’t the rollercoaster they were early in the pandemic, for many, they’re still difficult to pin down. But that’s just the beginning.
The vast majority of hospital leaders are bracing for a nursing labor shortage – 92% say they expect things to intensify over the next 18 months [1]. Yes, travel and contract nurses are an option, but they’re incredibly expensive. I sometimes ask whether leaders who are already using travel nurses in their staffing strategy are adjusting, since, before the pandemic, travel nurses could actually cost less than permanent nurses on an hourly basis – but their pay has skyrocketed, from between $1,000 and $2000 per week pre-pandemic to $3,000-$5,000 since [2]. And these higher-paying positions are hard to resist for employed nurses, so many institutions can expect attrition on that end.
So it’s not surprising that hospital margins are plummeting – Kaufman Hall’s Operating Margin Index is down in the negatives, at -3.3% with CARES Act funding and -3.68% without the federal aid.
What’s this all mean? It can seem like an impossibly complex question to answer, but the simplest, lowest-hanging fruit for most executives is a focus on cash flows. This means a few things, including:
- Assigning responsible leaders
- Identifying your best KPIs
- Narrowing down your specific root causes of cash flow issues using data
- Creating workable plans to turn your cash flow problems around
Your challenges could originate anywhere from low rates of clean claims, to high denials, to poor registration, to missed opportunities in your service line mix. By focusing on the points above, you can move from having a vague idea to building a laser focus on your cash flow challenges and a solid plan in rectifying them. Wherever you’re starting from, don’t wait. While the pandemic might have leveled off for a while, we’re still dealing with some ripples and now’s the time to set up your plan for bringing in as much cash as possible through updated healthcare revenue cycle management solutions – know that you’re going to need it.
Works Cited
[2] L. Lucas, “Rising cost of traveling nurses having ripple effect on area hospitals,” Alive, 21 February 2022.
Hemant Apte, Chief Executive Officer in
Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.
