Health system leaders aim to bolster resilience and readiness in preparation for a potential recession, but most CEOs and CFOs do not see an economic downturn as a barrier to growth, according to Mercer's "2023 Executive Outlook" survey.
C-suite leaders at hospitals and health systems are most worried about staffing shortages and how they will affect patient care, while the rising costs of supplies and labor and how they will affect margins are also concerns. However, tenured executives are determined to lean on their experiences leading through previous crises to overcome the inflationary and labor challenges facing them today.
The CEOs of Northwell Health and Trinity Health discuss how a potential recession this year would affect health systems:
Note: Responses were lightly edited for length and clarity.
Michael Dowling. President and CEO, Northwell Health (New Hyde Park, N.Y.): Even if we do have a recession, it doesn't mean that people don't get sick. In fact, people's problems increase. Our business does not slow down if we have a recession; our business will probably increase. On the revenue side, it won't necessarily affect our government reimbursement, which we don't do well on anyway. The things you worry about during a recession is if employers give up the coverage of their staff. Then those employees with no insurance may go on a state Medicaid program, and that might affect hospitals.
In the healthcare sector, even in a recession, the need for hospital services actually increases. No recession could be as bad as what we experienced during COVID, yet we managed it. We had a problem that we didn't even understand, and we worked through it. I think healthcare deserves an extraordinary credit for what was done during COVID. If there is a recession, we will deal with it. It's just one of those things that happens, and we will respond to it in as comprehensive a way as we can. I can't control it, but I can control our response.
Mike Slubowski. President and CEO, Trinity Health (Livonia, Mich.): We've been living with boom-and-bust cycles through the pandemic — surges of patients, people not coming in for routine care, not having enough staff to accommodate volumes, inflationary impacts up the wazoo, etc. — so it's not like we're not prepared for more uncertainty. Anybody running a health system or any business right now, you've got to build into your plans the capability to manage uncertainty and respond quickly.
So, we are closely monitoring our capital spending and maintaining our facilities and services for safety for our patient and member experience, but we are also focused on capital spending in areas where we see a more immediate return on investment. We're doing a ton of work on process redesign to bend the cost curve, going back to FirstChoice, TogetherTeam and our common platform work.
I think we're in a continuous cycle of being hopeful amidst uncertainty. You have to be able to move quickly, but at the same time, in terms of long-term planning, we have to bend the cost curve. Everything we're focused on is how do we improve care and outcomes at a lower cost level and viewing everything that we do around that framework.