{"id":10124,"date":"2020-05-12T12:14:00","date_gmt":"2020-05-12T16:14:00","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=10124"},"modified":"2026-02-06T09:24:51","modified_gmt":"2026-02-06T14:24:51","slug":"covid-19-the-prescription-to-recover-faster-financially-in-healthcare","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/covid-19-the-prescription-to-recover-faster-financially-in-healthcare\/","title":{"rendered":"COVID-19: the \u201cPrescription\u201d to recover faster financially in healthcare"},"content":{"rendered":"
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\n\t\t\t\t\t\tCOVID-19: the \u201cPrescription\u201d to recover faster financially in healthcare\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Brian\t\t\t\tBrian Bogie<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Everyone has spent the last few weeks reacting to the COVID-19 crisis, both personally and professionally. However, as new virus cases start to flatten, and states begin to reopen, people are starting to think about the recovery<\/a>. And anyone who is thinking about recovery likely wants to recover as fast as possible: mentally, physically, emotionally, financially, etc. Companies are also looking to recover faster: their employees, customers, finances and growth. While there is no way to know what the true economic impact to businesses will be, research indicates that we can position our organizations to recover faster, but the time to act is before the crisis ends<\/em>.<\/strong><\/p>\n\n\n\n

In a Harvard Business Review (HBR)<\/a> study of 4,900 companies across several recessions (economic shocks like this crisis), the authors found that the optimal strategy being a combination of balanced cuts (play defense) with selective investments (play offense) before the shock or crisis is over. This approach leads to a 76%[1]<\/a> higher chance of pulling ahead of the competition when times get better than just cost-cutting. Unfortunately, most companies tend to focus on cost-cutting only during the crisis and make offensive moves too late, after the crisis ends.<\/p>\n\n\n\n

So what investments should you consider before the crisis end? To uncover best practices for healthcare organizations, I spoke with many healthcare finance professionals about how they are preparing their organizations to recover faster. Jane Bray Sidler, Chief Financial Officer at Accelerated Claims and Dr. Virginia Jones, COO at Village Family Dental provided some especially insightful examples that I will share.<\/p>\n\n\n\n

Let\u2019s review the 4 proactive moves that healthcare organizations can do before the crisis ends<\/em> to ensure a faster recovery:<\/p>\n\n\n\n

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    Double down on remote work<\/strong><\/h2>\n<\/li>\n<\/ol>\n\n\n\n

    As the news of COVID-19 became a clear risk to ACI, Jane did not delay in getting her employees out of the office and securely working from home. \u201cThis took a concerted effort of obtaining additional equipment and engaging our entire IT staff to ensure every employee had what they needed to be successful at home. Because we were able to implement this in less than a week, there was no down time for processing our claims for our customers which will not only ensure ACI\u2019s financial success but also help our customers continue to have a revenue stream during such a tumultuous time.\u201d<\/p>\n\n\n\n

    Jane has seen an increase in productivity of 15% <\/strong>across the board because of the shift and plans to expand remote work to recover faster. \u201cThis has proven to our shareholders that remote work is in fact feasible, profitable and beneficial, and because of this we are capable of eliminating some office space<\/strong> and have more flexibility in a telecommuting environment for future recruiting<\/strong>.\u201d<\/p>\n\n\n\n

    Jones added that having cloud applications, especially for accounting, in place during these unprecedented times has been a \u201clife saver\u201d, since it allows her lean accounting staff to keep financial operations humming from the comfort of their own homes.<\/p>\n\n\n\n

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      Enhance Visibility to \u201cSense and Respond\u201d Faster<\/strong><\/h2>\n<\/li>\n<\/ol>\n\n\n\n

      Understanding the clinical, financial and operational metrics of your business is vital to coming out of the pandemic posed for growth. According to a McKinsey article on recessions<\/a>, \u201cDon\u2019t let a good crisis go to waste \u2026seize [the] opportunity.\u201d Most importantly, you should plan for the end of the downturn now. As Bain & Company authors Tom Holland and Jeff Katzin wrote in Beyond the Downturn: Recession Strategies to Take the Lead<\/a>, \u201cThink of a recession as a sharp curve on an auto racetrack<\/strong>\u2014the best place to pass competitors, but requiring more skill than straightaways<\/strong>. The best drivers apply the brakes just ahead of the curve (they take out excess costs), turn hard toward the apex of the curve (identify the short list of projects that will form the next business model), and accelerate hard out of the curve<\/strong> (spend and hire before markets have rebounded<\/strong>).\u201d Thus, being able sense and respond faster is critical to a faster recovery, rather than being caught flat-footed.<\/p>\n\n\n\n

      Jones noted that she benefits from having everything she needs on her custom COO dashboard and can drill into whatever she needs. This includes all sorts of critical performance indicators, from the dental group\u2019s EBITDA, cash balance, cash flow statement, collections per month, production per month, daily net income, and weekly A\/P, to operational data like its number of cases for the month, equivalent operating room days, cost per case, revenue per case, and performance versus budget. And since it\u2019s no longer a chore to get consolidated financial statements out the door, Jones now puts her energy into answering questions like, \u201cWhat is this telling me? Who made what? How do I know which provider and provider types are most profitable? What practice areas generate the most costs?\u201d<\/p>\n\n\n\n

      \u201cOur financial reporting by location is accurate and real, which is huge for us,\u201d said Jones. \u201cWe can identify which offices or service lines are making money, which ones aren\u2019t, and then quickly determine the cause and where we stand. For instance, after we decided to start offering new lines of business like frenectomies and sleep apnea services, we were able to evaluate each one\u2019s profitability and determine whether it was a good or bad idea<\/strong>.\u201d In another instance, she remembers, \u201cWe had a specialist who was producing very large dollars. However, once we got down to all the costs associated with him\u2014including his fees, the number of assistants he required, and the fact that his equipment and supplies were more expensive\u2014we discovered that he was our lowest profit provider, so we figured out ways to improve the situation.\u201d<\/p>\n\n\n\n

      At ACI, Jane developed a new daily productivity report to assist managers in tracking the progress of their teams so as to provide coaching opportunities where needed. In doing so, using dashboards and tracking throughput and revenue per FTE on a weekly basis allowed her to closely monitor future profitability and potential downside to the impact of COVID-19 to our business.<\/p>\n\n\n\n

      \u201cWith this crisis, our opportunity to become a stronger force in the marketplace was only enhanced. While it was inevitable that incoming business would be disrupted by this situation, this forced period of adaptation has unintentionally provoked us to be creative and take advantage of this time<\/strong>. We used this opportunity to really take the time to evaluate our processes in place and look for specific areas in need of improvement. We have already found plenty of opportunities to restructure some team workflows or capitalize on implementing new technologies.\u201d<\/p>\n\n\n\n

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        Find New Opportunities<\/strong><\/h2>\n<\/li>\n<\/ol>\n\n\n\n

        In Seize Advantage in a Downturn<\/a>, David Rhodes<\/a> and Daniel Stelter<\/a> write, \u201cInaction is the riskiest response to the uncertainties of an economic crisis. But rash or scattershot action can be nearly as damaging. Rising anxiety (how much worse are things likely to get? how long is this going to last?) and the growing pressure to do something often produces a variety of uncoordinated moves that target the wrong problem or overshoot the right one. A disorganized response can also generate a sense of panic in an organization. And that will distract people from seeing something crucially important: the hidden but significant opportunities nestled among the bad economic news. To paraphrase Alexander Graham Bell, when one door closes, another opens. As we have seen several weeks into the pandemic, many healthcare organizations have found new ways to operate, evolve and grow their businesses .<\/p>\n\n\n\n

        \u201cI think the current environment may generate opportunities for consolidation and efficiencies of scale in the dental industry<\/strong>. There are practices that were looking at from a performance and profitability perspective before COVID-19 hit, and because we had detailed information on key performance indicators of each practice, we have been able to react quickly. Because of this, we may be in a position to acquire some existing practices<\/strong> for our portfolio, which has always been our growth model,\u201d said Jones.<\/p>\n\n\n\n

        \u201cUltimately, we understand that our partners are dealing with unimaginable dilemmas as COVID-19 continues to interrupt their business; however, we have taken this opportunity to dive into our current clients’ needs. We saw the opportunity to expand our scope of work to encompass Veteran Affairs coupled with our complex claims mode<\/strong>l. We realize that our current clients would like to delegate these difficult claims to vendors to lighten the burden on staff,\u201d offered Jane.<\/p>\n\n\n\n

        Some other ways healthcare organizations can evolve and grow their businesses in response to the \u201cnew normal\u201d:<\/p>\n\n\n\n