The Financial Health of Hospitals

by Roger Wilkerson
Jun. 4, 2020 | Back To Explore

COVID-19 has had an enormous impact on individuals, communities, the economy, and the nation’s hospitals and health systems. Maintaining financially healthy hospitals is critical to having healthy communities, and although this time of crisis saw an influx of COVID-19 related patients to our hospitals, the reality is, healthcare systems are losing money.

According to a May 5, 2020 report from the American Hospital Association, COVID-19 is having a historical financial impact on America’s hospitals and health systems. The report states that over a four-month period from March 1, 2020, to June 30, 2020, hospitals and health systems are expected to experience an estimated $202.6 billion in losses. Hospital revenues have declined dramatically due to the cancelation or postponement of non-emergency surgeries and individuals have opted to postpone care ranging from primary care visits to elective surgeries.  

While healthcare-related revenue has been declining, expenses have been increasing. In addition to the increased cost of providing care during the pandemic, bad debt and charity care have increased by 13 percent over the previous year in March. The actual increase in cost is still being calculated and will include increased costs ranging from supplies to overtime pay for employees. Another financial hit has been to capital markets. Many hospitals carry large investment portfolios that have been negatively impacted during the early stages of the crisis.   

At Little, we are exploring how hospitals, especially those impacted by infectious diseases, can maintain financial health during periods of atypical operation. Below are a few ways design can impact financial sustainability:

  • Testing deployment, processes, settings, and supplies are the first line of demarcation and must be thoughtfully considered during the planning of all care settings. 
  • Recent growth and acceptance of telemedicine can help. We have a previous article discussing telemedicine and the role it can play with forward triage.
  • Beyond testing, we are looking at ways of separating functions and specialties. For example, can different specialties such as Children’s Hospitals or Cancer Hospitals be freestanding and self-sustaining when other areas of the medical center are focused on an infectious disease crisis?
  • We’ve seen an increase in the number of smaller community hospitals and health care centers closing over the last several years. Through creative planning, a focus on operational protocols, and increased forward triage, we anticipate these facilities can continue to operate and provide traditional care to their communities.
  • Additionally, recent events have brought to light the extreme demands placed on our healthcare workers.  As designers, we can impact the negative effects of staff burnout and anxiety.  For example, as we plan new facilities, we are considering options such as the inclusion of respite rooms, ergonomically designed charting areas, biophilic connections, and collaborative physician “think” spaces.  

Our focus is always on positively impacting lives and one way we do this is by designing solutions that result in healthy hospitals.

For additional healthcare articles, see links below:
Supporting Our Healthcare Heroes
The Sudden Rise of Telemedicine
Addressing the Design Needs of Healthcare Workers
Rethinking the Outpatient Waiting Room Experience