3 changes to better position your hospital for the next pandemic


Researchers at Boston-based Harvard Business School and Durham, North Carolina-based Duke University shared three ways hospitals can be better prepared for a future pandemic in a June 10 report published in Harvard business review.

The COVID-19 pandemic has exposed the inefficiencies of hospital financial models. Even as hospitals were filled to capacity, many hospitals suffered severe revenue losses. There is no efficient model where demand increases but incomes fall, the authors said.

The American financial model relies on expensive, highly reimbursed services, such as joint replacements, cardiac procedures, and other elective services. The COVID-19 cases used a lot of hospital resources, but they offered lower profit margins than the lucrative procedures, which were postponed until the start of the pandemic. The authors suggest that changes in hospital financial models may better position hospitals for a future crisis.

Three ways for hospitals to better prepare for the next pandemic:

  1. Expand into new services.
    Although it is difficult to increase the number of beds in a hospital, hospitals can increase patient services, such as the home hospital. Many organizations should be able to provide remote care with monitors, sensors, and clinicians who can make home visits. Humana and Phillips have already invested massive amounts in the home hospital field.
  2. Share resources with hospitals in difficulty.
    Banks compete with each other, but also lend to each other when one is faced with a liquidity crisis. Hospitals can work in a similar fashion with systems of mutual referral and equipment sharing in the event of a shortage. Instead of stockpiling supplies such as personal protective equipment and ventilators, hospitals should have shared their supplies with hospitals in need.
  3. Encourage plans for surges in demand.
    Payers can influence hospitals to have a well-developed plan in the event of increased demand and could advertise these hospitals to encourage this behavior. Patients who need constant access to care, such as the elderly, may be drawn to these facilities because they know they will always have access to services in a crisis.


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