An analysis prepared by Kaufman, Hall & Associates, LLC and released by the American Hospital Association (AHA) in March 2021 highlights the ongoing consequences of the COVID-19 pandemic on the financial stability of hospitals and health systems, threatening their ability to continue to provide essential services to their patients and communities. 

The American Hospital Association estimates a budgetary impact of $202.6 billion in lost revenue for America's hospitals and healthcare systems, or an average of $50.7 billion per month during 2020. In addition, Kaufman's report forecasts that total hospital revenue in 2021 could be down between $53 billion and $122 billion from pre-pandemic baselines.

These numbers create a pressing need and opportunity for health reform that helps achieve better access, affordability, and equity. The National Academy of Medicine's Vital Directions for Health and Health Care: Priorities for 2021 initiative organized their recommendations around five policy priorities: accelerating the transition to value-based care, advancing home-based care, expanding insurance coverage, improving the affordability of drugs and other therapeutics, and developing a high-value workforce.  

Accelerate Transition to Value-Based Care

Accelerating the transition to value-based care necessitates more than new payment models. Redesigning care delivery to provide more value to patients requires new tools, competencies, and infrastructure.

Advance Home-Based Care

Improvements on the internet, video, and remote monitoring capabilities increasingly allow for delivering health care services in more cost-effective, patient-centered settings. Patients now can receive home-based acute care, primary care, and behavioral health services of equal or better quality compared with facility-based delivery and at a lower cost

Undoubtedly, we will see a rise in digital health in the coming years; according to an S&P Global Market Intelligence survey, healthcare professionals plan to invest in technologies that enable patient monitoring and telehealth. Also, U.S. President Joe Biden has proposed a $100 billion investment in high-speed broadband, which, if approved, may have implications for telehealth.

So far, 2021 could be a dynamic and changing year in the dynamics of the healthcare industry and its adoption of technology to improve processes, reduce cost and offer a better quality of care for the patients.

References:

Hallam, K. COVID-19 Impact & Recovery: Healthcare Outlook for H2 2021.S&P. Global Market Intelligence. May 2021

Shrank W. Health Costs and Financing: Challenges and Strategies for a New Administration. Health Affairs. Vol 40. No 2. Jan 2021

Kauffman H. New analysis shows a continued negative impact of Covid-19 on hospital and health system financial health in 2021. American Hospital Association. March 2021.

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