COVID-19 Revenue Recovery: Four Steps to Successful Program Launch
For hospitals across the country, their budgets and financial plans for this year have been complicated by COVID-19. These hospitals are now facing a hit to their revenue, increased expenses, and even liquidity concerns, in both COVID-19 “hot spots” and outside of them.
According to a recent Strata Decision Technology poll, 75% of finance leaders report that their organizations are already actively planning or executing COVID-19 revenue recovery strategies now. However, 70% of executives also said their recovery target hasn’t been calculated or defined well.
To add another layer of complexity, 55% of finance leaders expect that their facilities will not return to the same levels of elective surgery cases they experienced before the virus until Fall 2020 or early- to mid-2021.
As hospitals are now actively planning or executing these revenue recovery strategies while continuing to take on COVID-19, these programs must do much more than simply increase OR hours to account for lost volume. Your hospital’s COVID-19 recovery program will need to be comprehensive in scope and built on a strong foundation in order to be successful.
Four Steps to Building a Successful COVID-19 Recovery Program
Having helped over forty-five organizations build their continuous cost improvement programs, we have seen what works when it comes to improving overall financial health. We have also identified three key components of a successful recovery program: agreeing on a priority for savings, establishing an accountability and governance structure, and determining actual “boots on the ground” project resources who will carry out the financial improvement projects.
For healthcare organizations to successfully navigate the aftermath of COVID-19, their efforts will need to be amplified. Under ordinary conditions, establishing and engaging the entire organization in cost savings programs can be incredibly difficult for hospital leaders.
But today, many of the necessary components will be compromised by what was just a taxing crisis. Front line and financial team leaders will be exhausted by the efforts of the last few months. It is key for organizations to consider this when establishing a crisis team and plan for the months ahead.
Step 1: Establish Leadership and Owners
It is key for you to begin thinking through who will become the leaders and owners of your cost recovery program and their projects. This will set the tone for the improvement process and creates a level of urgency. With sponsorship from the CFO and COO, as well as CMO and CNO leadership, you will be able to remove barriers and avoid hesitation or indecision. Engagement from this level will also ensure that the organization is held accountable to these initiatives and efforts.
Your team will also need to identify a dedicated, full-time central point of coordination for program leadership and management. As mentioned earlier, the strongest candidates for this role will likely be the same people you have depended on throughout the crisis. They are also likely exhausted. You will want to select another strong leader for recovery management. This leader will need to have an executive presence and strong analytical, facilitation, and communication skills, with demonstrated experience in change leadership.
Step 2: Set the Target
Your team will need to set a financial target and establish a core graphic or visual to help show the reason for the established recovery target, like a margin gap. It will be imperative for you to explain the target to create organizational buy-in at all levels.
Arbitrary targets that don’t resonate with staff won’t gain their engagement and will result in minimal commitment to your program, so it’s important that you are able to effectively communicate. Consider alternative communications to help different audiences understand the importance of the project, including messages like “we need to reduce the cost per case,” “we need to drive margin,” etc.
Step 3: Brand the Program
If you want the program to be memorable, you need to name and brand it. Be creative and have fun with it. Effective branding helps with communication and creates buy-in and secure engagement. It also aids in program logistics, like meeting invites. An example could be an acronym you’ve created or something like “Financial Stewardship, MY33, Thrive Together,” etc.
Step 4: Establish Guiding Principles
At the end of the day, your recovery program should improve the operations, quality, and staff satisfaction, not just grow your margin.
To make that a reality, you will need to create guiding principles, the organization’s “true north” for any financial improvement opportunities. Keep these principles front and center, posted on the walls inside your organization where staff see it, both during brainstorming and planning. Be sure to include the goal time frame, such as “something we can activate within three to six months.”
These guiding principles can be short, succinct, and comprehensive. A few examples include:
“The patients will always come first.”
“We will incorporate lessons learned from our COVID-19 response and challenge conventional wisdom.”
“The full recovery target will be achieved.”
“Projects will be thoughtful and thorough, thinking cross-functionally.”
These guiding principles will be critical in helping your organization orient their actions around a few key creeds. To shepherd your organization through recovery will require the same urgency and energy that your teams brought to the preparation leading up to COVID-19.
Check out our on-demand webinar to learn more about how organizations are beginning to map their recovery plans and visit our COVID-19 Help page for additional resources for you and your team.