Healthcare’s Covid-19 Catch-22

Posted on:
09-21-2020

The Covid-19 pandemic has put healthcare providers at the heart of a global crisis – and focused their resources on front-line care. But it’s also demonstrated the need for greater efficiencies in non-clinical process, which will only bear the brunt of temporary cost reduction measures for so long. The problem? Finding budget during a clinical crisis to invest in those long-term gains…

It’s an unenviable time to be working in the healthcare sector. For clinicians and other front-line staff, the Covid-19 pandemic has taken a terrible toll, in terms of stress, workload and even mortality. Care-givers and medics around the world have rightly received plaudits for their hard work and bravery in the face of a disease that’s claimed so many of their number.

Behind the scenes, hospital administrators and other non-clinical teams are also grappling with challenges. Not only are they facing similar challenges to all businesses –lockdowns, socially distanced working, unpredictable workloads and uncertain revenues – they’re also having to come to terms with the sheer cost of administering treatments around the pandemic itself.

 

Catch-22: makes you sick
At the heart of the problem is a Catch-22. Healthcare providers need viable strategies to optimize their processes and cut down on non-clinical expenses so they can prioritize patients. But they often struggle to find the funds to make the investment to streamline their processes because they need to deploy their capital on optimizing clinical outcomes.

So while the benefits of automation within a healthcare setting are clear, it’s hard to get CFOs to prioritize the investment in the short term.

The Catch-22 situation – we can’t invest to save money and speed up processes because we’re short of money and are too busy fire-fighting transaction volumes – has been made worse by the (totally justified) need to prioritize clinical staff during the Covid-19 pandemic.

That’s meant healthcare providers have seen revenue falling – thanks to Covid-19 cases displacing the usual income-generating treatments. So they’ve needed to trim back office costs (and staff). In many cases, this has massively increased workload on remaining finance and admin teams – reducing their capacity to address poor processes or bring in new tools such as automation.

 

Healthcare’s unique problem
Covid-19 driven challenges have certainly hit other sectors. In financial services, for example, many banks faced an overwhelming growth in transaction processing and call handling as a result of government and corporate measures to address the economic impact of the pandemic. But we saw many fast-tracked automation projects that made a big difference.

Healthcare faces many of the same issues – but as yet has been more reluctant to investigate automation as a solution. That’s partly about scale (especially in smaller healthcare networks); capacity for IT projects is a huge issue, too, particularly right now.

Data security is also incredibly sensitive in healthcare – more so, even, than in financial services (which has had years to build highly secure, high-capacity systems at a scale). Delivering faster, more efficient processes that will drive down operating expenses is important – but the implications of a data breach mean testing and auditability are always going to be paramount for healthcare providers.

 

Building the case for change
Longer-term solutions that might address clinical inefficiencies and recover some of the revenue lost during Covid-19 – such as telemedicine – are seeing some traction already. But while having a video call with a doctor might be fine from a medical perspective, for the patient it’s bound to feel like a less valuable interaction. So, investing here is both important and probably doesn’t solve longer term problems.

That throws the ball back onto cost savings and efficiencies. And it’s here where healthcare leaders have a chance to break the Catch-22.

The big question is how would an automation project get off the ground? It has to demonstrate that the short-term investment can deliver hoped-for aims. And that could be a challenge in itself.

After all, it’s not uncommon to hear requests for fast implementation, quick ROI and creative, tailored solutions (even in a sector as process-heavy and complex as healthcare). But any project manager will explain, you can’t beat the ‘iron triangle’. Lower cost usually means less creative and slower. Fast means more expensive and more standardized. Innovative means… well, you get the idea.

But you have to start somewhere. What we typically find is that a healthcare CFO will prioritize ‘time to implement’ – so that’s where automation has to deliver. There’s a natural reluctance to spend too much money on up-front consultancy (which feels wrong given the clinical priorities). They don’t have the time to explore unexpected wins by empowering citizen developers. And they need reliable solutions.

Uncovering the more predictable and standardized ways that automation can help is the clear value play. And the good news is, it actually dovetails with clinical outcomes, too…

 

Standard fixes for specialized outcomes
Some of the solutions automation offers come straight from the established base:

  • HR – the typical administrative benefits, in addition to streamlining processes around clinician capabilities and accreditations.
  • Supply chain – healthcare networks are often criticized for management of ordering, seeking discounts on, and reconciling invoices, all areas where automation can help.
  • Accounting – often a rich field, including reporting to the general ledger, consolidating financial and operational data and managing often complex payroll processes.

We’d never recommend a ‘drag and drop’ strategy of other organizations’ solutions into any environment – much less a critical one like a hospital – but the frameworks and logic are there.

Then there are spill-over effects from better admin into clinical outcomes. Take, for example, automating admissions and routine patient care. Machine-managed import of historical and current clinical data, plus basic information about a patient. And a hospital ought to be able to generate timetabled protocols for care. We’ve heard examples where costs spike thanks to avoidable bed sores, for example, because routine interventions weren’t built into work schedules or reports.

Automating data consolidation and providing single tools around functions such as procurement could offer these providers not just lower administration costs, but also better deals in their supply chain. That kind of interoperability could offer clinical benefits, too.

 

The long game
And while that key issue around data security and privacy might lead some to caution on automation, in fact this is an area where healthcare has a lot to gain. Reducing rekeying errors; minimizing human contact with sensitive records; ensuring the right treatments are delivered; and correct cost and medical data is attached to the right patients – they’re all areas where long-standing issues can be addressed with automation.

The other big driver both pre- and post-Covid 19 is consolidation in the sector. We’ve seen plenty of mergers, but many hospitals and networks struggle to consolidate systems – creating huge inefficiencies and hurting potential economies of scale.

Over time they’ll develop unified systems. But as they look to find the needed capex funds (or the right outsourced solutions, if opex is the preferred accounting objective), automation offers a way to knit together systems and generate useable reports as well as process efficiencies.

No-one doubts that healthcare – in the US especially – is a fragmented and complex sector. Additional layers – such as government oversight and the insurance providers – further tax the experience for patients, clinicians and healthcare administrators. And during this global pandemic, both the drain on networks and the importance of clinical outcomes have rightly been paramount.

But there remains much to be gained from breaking through this specific Catch-22. Lower costs, better patient outcomes and great efficiency are all possible. When the Covid-19 dust finally settles, we may have a rare opportunity to break the industry’s circular logic.

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