Uncertainty remains in health care sector due to pandemic

The COVID-19 pandemic has hospitals, health systems, and physician groups still on shaky financial ground as margins and patient volumes remain low and costs remain high.

According to a news release, a pair of reports from Kaufman Hall found that healthcare organizations are still in a precarious position more than a year into the pandemic even as year-to-date margins increased in March and volumes continued to decline.

“We expect to see additional margin gains in the months ahead, especially in comparison to record-poor performance in the early months of the pandemic,” Jim Blake a managing director at Kaufman Hall and publisher of the National Hospital Flash Report, says in the release. “Over the course of 2021, however, we project hospital margins could be down as much as 80 percent and revenues down as much as $122 billion compared to pre-pandemic levels as hospitals continue to feel the dire repercussions of COVID-19.”

Physician groups saw volatility throughout 2020 leading to productivity, compensation, and revenues for the year fell below where they were in 2019 while the average investment required to supplement physician revenues rose, the release says.

"Healthcare leaders should take a balanced approach with regard to meeting patient demand as they look to grow their physician strategies moving forward," Cynthia Peters Arnold, a senior vice president at Kaufman Hall, says in the release. "This will require rethinking the investment needed to pay physicians, setting clear clinical quality and economic targets, and establishing a physician management system with accountability for both physicians and administrators."

This article was originally published by Medical Economics.