2021 State of Healthcare Performance Improvement Report
The COVID-19 pandemic continues to undermine performance improvement efforts at hospitals and health systems across the country. Supply chain disruptions and shortages have driven up prices and forced a return to the costs of carrying larger inventories of needed supplies. Labor shortages and high employee turnover are pushing up base salaries and recruitment costs and have led many organizations to implement retention bonus programs. Volumes in many service lines remain below pre-pandemic levels, putting downward pressure on revenues; clinical staff shortages make recovery even more difficult.
Signs of longer-term change are evident in the responses to our survey. A strong majority of respondents predict that the pandemic will result in permanent changes to the workforce, with 66% saying that the ratio of administrative staff working remotely will continue at levels reached during the pandemic, and another 11% predicting that the percentage of remote workers will continue to increase. Almost half of respondents say the pandemic has driven their organization to adopt new processes, positions, or departments that will be continued going forward.
Hospitals and health systems have had little reprieve from the pandemic as new surges in infections have continued to stretch their resources. Still, the changes that have occurred to date—workforce realignments, a rapid push into telehealth and digital care delivery, shifts in utilizations and volumes—point to the need for transformative change that touches most facets of operations. Hospital and health system leaders will need to address questions of access to care, supply chain management, patient throughput, workforce deployment, service line development, and physical footprint.
Few health systems will have the resources to take on these challenges alone. A fundamental question will be what they need to control and where they can seek out strategic partnerships—with independent physician groups, payers, retailers, third-party vendors, community organizations, and others—that enable them to focus on their core business strategy while expanding the services and optimizing the efficiency, accessibility, and affordability of care they provide to their communities.
- 100% of survey respondents face issues with clinical staff, including burnout, difficulty filling vacancies, wage inflation, and high turnover rates.
- 99% have experienced challenges in supply procurement, including shortages of key items and significant price increases.
- 92% are having difficulties attracting and retaining support staff, and almost 90% have increased base salaries.
- 75% have experienced adverse revenue cycle impacts during the pandemic, including a higher percentage of Medicaid patients and increased rates of denial.
- 54% identify a “pain point” at an investment (or subsidy) per physician of $250,000 or less. The average investment per physician at the end of Q2 2021 was $232,583.
- 23% say that the ratio of administrative staff working remotely is likely to return to pre-pandemic levels. 66% said the ratio will remain at levels reached during the pandemic, and 11% said the percentage of staff working remotely will continue to increase.
- 22% have seen pediatric services return to pre-pandemic levels, while 16% say pediatric volumes remain below 75% of pre-pandemic levels. Cardiology and cardiovascular services have seen the most significant rebound, but even here, just 44% of respondents have seen a return to pre-pandemic levels.