As Eisenhower Health reopens following the peak of COVID-19, leaders are leaning on technology and strategies that improve efficiency to ensure health system financial stability during the recession.
When COVID-19 really hit the Coachella Valley area of California in mid-March, volumes dropped by as much as 60 percent at Eisenhower Health. For a health system primarily relying on public payers, this drop was a threat to health system financial stability in the coming recession.
Health system leaders initially predicted a nearly $100 million loss over the next six months. But by June, Eisenhower Health was noticing improvements in patient volumes and consequently its bottom line.
In its most recent month, the health system was operating at about 90 percent on the inpatient side compared to the previous year. The emergency department and surgery service lines were also at about 75 and 85 percent, respectively.
Since the recovery, health system leaders are now forecasting a $70 million revenue shortfall over the next fiscal year.
“When I look nationally, we are a little ahead of the curve,” Eisenhower Health’s senior vice president and CFO Ken Wheat said in the latest episode of Healthcare Strategies, an Xtelligent Healthcare Media podcast.
Hospitals lost $60 billion a month between March and June of 2020, according to estimates from the American Hospital Association (AHA). And the hospital group anticipates losses to continue well beyond that period.
Eisenhower Health, however, is on the path to recovery largely thanks to the health system’s efficiency journey.
While the health system made necessary spending reductions, implemented telehealth visits, and received funding from the CARES Act and philanthropists to stay afloat during a recession, Wheat and his team are now leaning on the data they have been curating for years to ensure financial stability.
“We’re ready, we’re poised, and we’ve got better data than we’ve ever had in terms of our knowledge of our costs at a very detailed level,” Wheat stated.
Over the last three years, Wheat and his team have transitioned away from legacy cost accounting systems, which provided high-level accounting akin to Medicare cost reporting. The organization is now using a more advanced platform that can provide real-time, interactive data on utilization, costs, and other metrics providers need to know to achieve efficiency.
“I’ve always found that if you can give them the information, they’re more willing to help us become more efficient as a health system,” said Wheat.
Wheat pointed to an example from the recent past in which providers were given information on the use of an IV drug treatment versus an oral treatment. The data showed the finance team that this was an opportunity to save $800,000 a year. To realize savings, however, the team put that data into the hands of clinicians who were able to review patient outcomes for the two treatment options as well as cost and utilization practices.
Hospitals and health systems will need to leverage these cost-saving opportunities as much as possible as the COVID-19 recession continues and a potential second wave of the virus looms ahead. In the meantime, Eisenhower Health is starting the process of resuming elective care, engaging patients, and recovering lost revenue by leveraging technology to realize efficiency throughout the health system.
“One strategy that we see as key for us over the next fiscal year is really pushing that information and data into the hands of our clinicians and our providers,” Wheat stated.