Nearly all respondents to a Kaufman Hall survey have experienced challenges in supply procurement.
The COVID-19 pandemic continues to impact the healthcare industry as supply chain issues, patient volumes, and staff shortages restrain the sector’s recovery.
According to a news release, the Kaufman Hall 2021 State of Healthcare Performance Improvement Report reveals an industry in need of transformative operational changes with bold, new thinking needed in nearly every area of operations.
The survey found that 99 percent of respondents have experienced challenges in supply procurement leading to shortages of key items and significant price increases. All respondents say that they have faced staff burnout, trouble filling vacancies, wage inflation, and high turnover rates. A further 92 percent say it is difficult to attract and retain support staff, while nearly 90 percent have increased base salaries.
Experts are pushing hospital leaders to rethink the approach to performance improvement by revisiting the premise that nor-for-profit hospitals and health systems can lower costs while maintaining control over all aspects of operations, the release says.
“The pandemic has created a perfect storm of increasing expenses and decreasing revenues,” Kaufman Hall Managing Director Lance Robinson, who leads the firm’s performance improvement practice, says in the release. “For most institutions, navigating today’s financial and operational challenges and positioning for future growth requires radical change that is achieved only with new thinking and partnerships. Now more than ever, hospitals need to build relationships with physician groups, insurers, retailers, vendors, and other providers. It’s increasingly apparent that most organizations don’t have the resources they need to evolve on their own.”
Other notable findings in the survey results include:
The results of this survey comes hot on the heels of another Kaufman Hall analysis which estimated that hospitals across the country will lose about $54 billion in net incomes this year.
Specifically, the analysis projects that median hospital margins could be 11 percent below pre-pandemic levels by the end of the year, but warns that the recent increase in COVID-19 cases tied to the Delta variant was not a factor considered in the study.
The actual performance results show that the percentage of hospitals with negative operating margins had decreased from the first to second quarters, the analysis see it improving to 35 percent in the third quarter and then stay flat in the fourth. It’s worth noting that the surge in cases tied to the Delta variant was also not included in this analysis, according to the report.
Contributing factors to the continued losses are: