Hospital CFOs are facing unparalleled financial challenges as COVID-19 forced the suspension of revenue-driving elective services. The rapid decline in patient volumes has prompted furloughs, pay cuts and other cost-cutting measures, but as recovery efforts begin, a new set of challenges will arise.
During a May 4 webinar hosted by Becker's Hospital Review and sponsored by BRG | Prism, Brad Fetters, a managing director of BRG | Prism, asked the CFOs of Madison, Wis.-based UW Health and LCMC Health in New Orleans about how COVID-19 has affected their respective fiscal landscapes. Topics included sustainability, ramping up elective services and investment strategies.
Here's a snapshot of their conversation:
Brad Fetters: What immediate steps have you taken to ensure sustainability?
Jenny Barnett-Sarpalius, CFO of LCMC Health: We are developing and updating rolling financial projections to understand the short-term and long-term impact of COVID-19. We are monitoring elective procedures and volumes relative to our projections and the level of COVID-19 patients who remain in our hospitals. We are continually managing cash flow and liquidity requirements.
Robert Flannery, senior vice president and CFO of UW Health: This pandemic has challenged some things that before might have been unheard of to consider, but from my perspective, much more is on the table now. I've been convinced there are elements of our organization and workforce that can stay remote. We have to start having conversations about who really needs to come back to the office.
BF: Now that hospitals have started to reopen, what does this look like for your facility?
JBS: We don't know if and when there will be a resurgence. What we do know is that there is no vaccine. We also know that we are prepared if there is another resurgence.
BF: What does your strategy for reopening elective procedures and reengaging your patients look like?
RF: As we've loosened the definition of essential care, we're working with our physicians to identify which of those cases need to come back online sooner and prioritizing those items. Through our hospital instant command system, we established a group called "essential services" that has been looking at ambulatory, ancillary, surgical and other areas. Each of those areas are putting together business plans in terms of what they need from a staffing and PPE perspective, and what protocols need to be in place.
JBS: It depends on the case of [each patient], but it is a combined effort of our leadership, our physicians, and our marketing and communications teams. Messaging and communications to the community are critically important for our patients.
BF: As you start ramping up services, how are you viewing capital expenditures and investments?
JBS: Technology, during this time, has never been more critical and essential. Virtual health and telehealth — that's here to stay now and will cause us to rethink the way healthcare is delivered and how our employees work. We also immediately re-evaluated our capital budgets, re-prioritized some capital, and deferred capital, in some cases.
To view a recording of the webinar, click here.
To learn more about BRG | Prism, click here.