COVID-19: Cash Management Strategies to Implement Now


For the typical health system, approximately 80 percent of its procedural volume is considered elective. Currently for most providers, these procedures — which drive 30–40 percent of net revenue and a considerable portion of net operating income — have been eliminated to create capacity for the incoming surge of COVID-19 patients and reduce risk of transmission. Furthermore, it is not yet entirely clear what reimbursement will be provided for COVID-19 care and associated costs. On the cost side, the current crisis is both driving up supply and resource costs and adding unanticipated costs such as standing up alternative care locations.

With revenues declining and costs increasing, cash will quickly be in short supply. It is important that organizations take steps now to conserve cash to deal with immediate demands as well as for future financial health and sustainability.

Maximizing cash flow at this critical time is a priority. A targeted effort focused on cash acceleration and conservation can help organizations get through this time of severe financial strain. Key action items include:

Optimize Cash

Target Revenue Cycle and Finance Interventions

Flex Staff Where Possible

Rebalance Productivity

Prepare for Demand Rebound

Most organizations are not yet sure when they will see the surge of COVID-19 impact. However, as the immediate crisis begins to dissipate, health systems must prepare to accommodate previously deferred elective cases.

The COVID-19 pandemic is disrupting life — and healthcare delivery — as we know it and the financial exposure will be significant for providers. Staying focused on cash management and conservation is essential for all health systems to keep pace with demands now and to return to a strong financial position after the crisis.

Authors

Pamela Damsky
Director
[email protected]

Rob Gamble
Director
[email protected]

Prashant Karamchandani (PK)
Principal
[email protected]

Catharine Wilder
Revenue Cycle Senior Practice Manager
[email protected]

COVID-19: Cash Management Strategies to Implement… - The Chartis Group