COVID-19 feels a lot like the occasional hurricane that crosses the Florida peninsula and takes a second bite out of Florida in the Panhandle.
It’s hard not to notice recent headlines about the resurgence of COVID-19 cases and the resumption of partial lockdowns, euphemistically know as “pauses” (the headlines are right next to the ones about an uptick in Doomsday shelters and Caribbean island purchases by the wealthy). COVID-19 feels a lot like the occasional hurricane that crosses the Florida peninsula and takes a second bite out of Florida; coming ashore again in the Panhandle.
State and Patient Imposed Pauses
Even without mandated restrictions, an estimated 40% of would-be patients remain fearful and have been delaying their healthcare. This percentage will likely rise...
It seems clear some states will experience another mandated restriction of some kind on elective surgeries. However, living in a state without restrictions doesn’t mean you aren’t seeing a drop in elective surgeries, screening procedures and office visits. Even without mandated restrictions, an estimated 40% of would-be patients remain fearful and have been delaying their healthcare (thank you Dr. Maccioli for your posted article). This percentage will almost certainly rise as additional people have a reflexive response to the news of COVID-19 spikes and pull even further back. This kind of financial stress will collapse some practices; particularly the unprepared.
Hurricane COVID-19.2 Survival 101
I’m a native Floridian and have experienced 4 direct hits from hurricanes in the last 20 years. I’ve learned the key to making it through a hurricane is based on 3 fairly simple principles:
1. Start watching tracking models as soon as there’s a named storm with a track that puts you in the “Cone of Probability.”
2. Access diverse sources of information (models range from “You’re all gonna die!” to “We may get a bit of wind and rain.”).
3. Plan and act ahead with your storm preparations (you can’t hang plywood in 120 MPH winds).
Storm Proofing Your Practice
The medical community was just reporting a steady increase in non-COVID-19 related services. However, with the uptick in COVID-19 cases and the resumption of some kind of restrictions, it appears there’s more financial pain to come. I’ve written a series of articles about surviving COVID-19 (financially) but here’s a quick summary:
Assessment and Forecasting is a Necessity
1. Reassess your Operational Cash (how many weeks/months of Operating Cash is on hand AFTER round 1 of the shutdown).
2. Use a dynamic forecasting model that recalculates and predicts Cash Flow based on constantly updated real-time data AND experimental data inputs.
Grist for the Forecasting Mill
Staffing levels need to mirror projected revenue.
1. Re-recalculate Volume: You’re closed… opened… partially closed. Whatever is going on has to be forecast/calculated in order to budget (see point 3).
2. Re-recalculate RCM: Get a handle on RCM KPIs (how fast your payments come in) based on what happened during the first lockdown and continue to monitor these closely.
3. Staffing Levels: No one wants to furlough staff (again), but if volume falls, the practice needs to have a plan to adapt. Staffing levels need to mirror projected revenue.
4. Have an Austerity Plan: If you were late in drawing up a fixed expense austerity plan for COVID-19 Version 1, there’s no time like the present to review all manner of potential cost savings (i.e., the possible cessation of non-profitable services, new lease terms, new IT and phone contracts etc.).
COVID-19.2 Survival Plan.2
It’s not too soon, or too late, to get prepared for COVID-19.2
We were all caught off guard with COVID-19 back in March. Get prepared NOW for a second wave. Given the weakened condition of many medical practice and businesses, it’s all the more important to have a survival plan for successive financial COVID-19 “storms.” In 2004, I endured 3 direct blows from 3 hurricanes in a matter of weeks. By the time the 3rd storm hit, storm preparation had been reduced to a routine. It’s not too soon, or too late, to get prepared for COVID-19.2.
Good Luck and Godspeed.
Grant Scott, President, Accord Healthcare Consulting