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April 30, 2020 Article 9 min read
Healthcare providers dealing with surges of COVID-19 patients struggle to look beyond the current crisis. But the actions leaders take now will set the stage for how they emerge from the crisis. Our guide can help.
Doctor sitting at a table looking at a tablet

The COVID-19 pandemic is unlike anything we’ve seen. It’s affecting communities in every state and nearly every country around the world. Some hospitals, health systems, physician practices, and senior care and living organizations are dealing with surges of COVID-19 patients, while other specialties have seen a drastic reduction in visits. These situations may make it hard to look beyond the current crisis, and yet, leaders of those organizations must begin to consider how they’ll emerge from the current battle and what must be done now to ensure long-term sustainability.

Since the early days of this pandemic, we’ve been assessing the business impact of the crisis so that we can help our clients respond to immediate health and financial impacts while preparing to ramp back up to normal (or rather, “new normal”) operations when appropriate. Crisis management in the age of COVID-19 consists of three phases:

Phase 1 — Respond: Patient and workforce experiences are amplified during a crisis. The actions you take today and how they affect your people, patients, and their family members will be remembered forever, positive or negative.

Phase 2 — Restart: After an initial response plan is in place, organizations must prepare a plan to get back to business. But the transition will not be cut-and-dried. Expect to keep a portion of the leadership team focused on responding to the crisis, even as others start working on the important task of moving the organization forward.

Phase 3 — Be ready: The saying goes that you should never let a crisis go to waste. Understanding what worked and didn’t work during the COVID-19 pandemic should inform healthcare organizations’ long-term strategies and models of care so that they’re prepared for the next crisis.

Successfully navigating the transition will require bold and sensitive leadership. Those who fail to provide that leadership may risk exasperating staff, providers, and patients, and falling behind competitors. 

While it seems to be in the distant future, we will emerge from this crisis — and healthcare organizations will need to rethink everything about how they operate in the new normal of social distancing and medical distancing. Successfully navigating the transition will require bold and sensitive leadership. Those who fail to provide that leadership may risk exasperating staff, providers, and patients, and falling behind competitors. Here we’ve highlighted some critical actions to put your organization on a path to full recovery.

Leadership and governance

As you start to move beyond response management, remember that restart scenarios won’t be perfect. In a recent article on how perfectionism will slow you down in a crisis, Dr. Michael Ryan, head of the World Health Organization Health Emergency Program, says, “If you need to be right before you move, you will lose. Speed trumps perfection.” As leadership teams make the difficult decisions necessary to move beyond the current crisis, it’s important that C-suite members embrace what’s good about these imperfect ideas, rather than dwell on what’s wrong, and work together to find an effective path forward.

It’s important that C-suite members embrace what’s good about these imperfect ideas, rather than dwell on what’s wrong, and work together to find an effective path forward.

The current crisis is challenging C-suite members to leave their silos and stretch new leadership muscles. That means being willing to listen to different voices and speak up when they have insights about domains outside of their areas of expertise.

Critical actions:

  • Maintain constant communication and collaboration so your executive team is complementing, rather than tripping over, one another.
  • Consider partnering with other healthcare organizations — for example, share staff or pool funds to acquire necessary personal protective equipment (PPE).
  • Review updated annual budget and three- to six-month rolling cash flow forecasts to assess the impact of lower elective volumes, increased COVID-19 spending, and impact of CARES Act relief programs.
  • Contemplate different scenarios for continued COVID-19 impact on patient volume, staffing, and supplies.
  • Determine at what point to bring back furloughed departments, restart elective procedures, and make capital investments.
  • Review and update applicable policies and procedures, such as those for remote working arrangements and telehealth. Consider new policies to maintain appropriate social distancing, such as protocols for in-office visits by patients as well as vendors and others who visit the facility.

Workforce

In the midst of chaos and uncertainty, people crave decisive leadership. Leaders who are seen as indecisive will lose the battle for talent as the industry recovers.

In the midst of chaos and uncertainty, people crave decisive leadership.

During the restart phase, one of the most critical decisions is when to bring back furloughed departments and restart elective procedures. Leaders must balance several factors to make those restart decisions, including demand from patients and provider burnout. Most importantly, be completely transparent about how and why you bring some service lines back before others.

Critical actions:

  • Prioritize employee safety, always.
  • Instill confidence in leadership through honest, open, and frequent communication.
  • Cross-train clinicians to achieve twin goals of providing coverage in case of a future emergency and decreasing the number of interactions with a patient in each given process.
  • To address and manage continued low volumes and reduced revenues, consider additional furloughs, mandatory paid time off (PTO), negative PTO balances, layoffs, or across the board salary reductions for managers and above.
  • Assess how your culture has helped or hindered your response to the current pandemic. Reinforce what has worked and work to change what has been a liability.

Financial performance

With the short-term aid available to healthcare organizations, it’s critical not to have a false sense of security. Based on an understanding of repayment periods and terms, financial leaders must put in place strategies to maximize financial aid and manage overall cash flow. Otherwise, their organizations will be debilitated by future cash shortages made worse by unanticipated carrying costs.

CFOs must push themselves to remain hopeful and optimistic, and to embrace imperfection.

Most CFOs are in their comfort zones when it comes to financial projections, expense reduction, and liquidity management. But the restart phase is a new frontier that will challenge CFOs to look ahead and help the organization chart a path forward in an uncertain future. CFOs must push themselves to remain hopeful and optimistic, and to embrace imperfection.

Critical actions:

  • Update annual budget and establish a three- to six-month rolling cash flow projection to reflect the impact of continued lower volumes of elective procedures, increased COVID-19 spending, and CARES Act relief funds and repayments over appropriate timelines. Assess and communicate how different timelines for recovery may impact the ability to repay advances and loans.
  • Consider turnaround and restructuring activities to help put the organization back on solid footing.
  • Draw on outside perspectives regarding likelihood of a resurgence of infections, as well as different scenarios for when area businesses will go back to work.
  • Continue to focus on core financial management, including implementing a cash preservation strategy, revisiting and revising the capital expenditures plan, optimizing revenue cycle performance, and proactively reaching out to vendors and creditors to discuss issues with debt covenants or timely payments.'
  • Diligently capture all COVID-19 related costs for the purpose of supporting CARES Act relief funds received, which will either be forgiven or repaid based on the terms and conditions of the funding source.

Operational efficiency

Operating in the pandemic likely shed light on ways to improve efficiency and better prioritize resources. As you begin to work through the backlog of elective surgeries and procedures, even small improvements in efficiency can make a big difference in the number of patients you can effectively serve in a day.

Consider ways to better deploy talent for greater operational efficiency. While most healthcare leaders would say that they’re operating as lean as they possibly can, given that labor makes up 50 to 60% of healthcare organizations’ expenses, it’s worth taking another look to make sure you have the right people in the right place at the right time.

For hospitals and physician practices, scheduling and prioritization of patients will soon take center stage.

For hospitals and physician practices, scheduling and prioritization of patients will soon take center stage, and these decisions could make or break the organization. Do you have a plan for which patients will get priority? This prioritization plan might include factors such as the patients’ health risks and comorbidities, the source of referral, payer type, and provider availability. However you prioritize these visits and procedures, make sure you're ready to handle the increase in volume. Stubbing your toe on these delayed procedures could be disastrous for patients and for your organizational reputation.

Critical actions:

  • Reassess staffing levels based on volume by unit, department, or office.
  • Assess vulnerabilities in the supply chain, especially for critical PPE, and reconsider the conventional wisdom of a just-in-time approach to supply chain management.
  • Evaluate strength of referral network for critical services that are needed alongside your organization’s procedures.
  • Step up cross-training efforts, considering all qualified care givers and other staff.
  • Continuously review margins in all operating entities, including clinics and other ancillary providers, and eliminate discretionary expenses as much as possible to reduce cash flow burden.
  • Proactively develop a “back-to-work” plan that can be deployed upon elimination of restrictions.
  • Participate in peer collaboratives to learn and share strategies.

Technology

The COVID-19 pandemic has given us a glimpse of how technology can be used to improve healthcare. Patients are far more willing to allow technology into the healthcare equation, and the remote monitoring and telehealth visits that are happening now will only increase. What does that mean to your workforce, your policies, your procedures, your patient relationships — even your physical office space? Healthcare providers must stay focused on the investments that will be necessary to maintain a competitive edge in the recovery. However, keep an eye on the long-term horizon for new and innovative technology applications. As patients and providers have successful experiences, their expectations about technology-enabled healthcare will continue to open up. But beware: Unless proactively addressed, privacy and security concerns can create a major barrier that stops many patients from adopting new technologies.

Critical actions:

  • Optimize telemedicine capabilities.
  • Implement long-term work-from-home programs for all eligible staff members.
  • Perform an IT review now to identify and clear roadblocks that might otherwise cause problems when volume picks back up.
  • Update EHR and patient financial systems as necessary to accommodate new COVID-19 clinical coding and documentation requirements.
  • Review compliance with cybersecurity and privacy guidelines.
  • Make sure your organization is on track to comply with interoperability rules.

Moving from crisis to restart isn’t an overnight event. In fact, a potential resurgence of the virus this fall could put many of our organizations right back in crisis mode. But keep in mind that you don’t have to go it alone. The global nature of this crisis is creating a heightened need and opportunity for collaboration. Reach out to other healthcare organizations in your region and in other regions, as well as the advisors and associations that can help provide feedback on crisis management plans and strategies.

For the first time in our lives, everyone is fighting the same enemy.

For the first time in our lives, everyone is fighting the same enemy. As we let our collective guard down and work side by side with organizations that we previously viewed as competitors, let’s all consider how we can make this new level of collaboration effective and permanent.

We’re here to help. Visit our COVID-19 healthcare resource center.

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