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Surgical volumes are still down. A data-first strategy is the key to recovery. 

Michael Woods, MD, MMM
Policy
June 12, 2021
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Due to COVID-19, hospitals were forced to reevaluate and rework systems and processes that had been around for decades. From managing the increasing demands for testing and treating patients with the coronavirus to acquiring necessary medical equipment to keeping beds available, hospital administrators, providers, and staff showed true heroism. At the same time, the constant ebb and flow of COVID-19 surges caused hospitals to experience significant financial challenges, and new data reveals just how hard hospitals were hit throughout the course of the year — and importantly, what they’ll need to do to recover.

Surgery is the financial engine of health care organizations, a fact that the COVID-19 crisis has only magnified. It accounts for more than half of all hospital revenue, and any impact on surgical services, positive or negative, can have a disproportionate effect on a hospital’s financial health.

The state of surgery during the COVID-19 pandemic

Research from McKinsey & Company released in October 2020 painted an illuminating picture of the general trends in surgical caseloads during the first several months of the pandemic. From March through July 2020, hospitals saw, on average, a 35 percent decline in surgical cases compared to 2019. It is estimated that hospitals will take up to two years to work through the resulting backlog, even operating at 110-percent capacity. In large part due to this decline in surgical caseloads, hospitals lost upwards of $122 billion in 2020.

New research from my colleagues and I adds context to this narrative. After Centers for Medicare and Medicaid Services (CMS) recommended postponing non-emergent surgeries in April 2020, elective case volumes, in particular, fell a staggering 193 percent compared to 2019. As cases dipped and many restrictions lifted throughout the summer, hospitals worked through much of the backlog, and elective surgeries rebounded — although still under 2019’s numbers.

While elective cases rebounded, urgent cases continued a constant downward trend throughout the year, with 33-percent fewer cases in December 2020 compared to December 2019. There are a few possible explanations why. Some studies suggest a meaningful drop in cases due to patient fear of infection and delayed diagnoses due to deferred care. It’s also possible that the initial cancellation of elective surgeries allowed surgeons to work through any existing backlog of urgent cases.

Importantly, this research also revealed that urban hospitals bounced back much quicker in the second half of 2020 from surgical caseload drops than rural hospitals. In April 2020, rural and urban hospitals both saw staggering declines in surgical volume: 126 percent and 123 percent compared to 2019, respectively. By October 2020, however, rural hospitals were seeing a 19 percent decline, while urban hospitals were experiencing only a 14 percent drop.

The path forward post-pandemic: Drive with data

Despite the direct link between procedural volume and hospital financial health, less than 50 percent of health care organizations surveyed by McKinsey & Company indicated a willingness to take necessary steps to increase surgical capacity and address the growing backlog. Paradoxically, however, 80 percent of those same systems believed they could grow market share in the next year. Making no changes and expecting a quick recovery isn’t a viable solution. One cannot put their head in the sand and simultaneously plan where they’re going.

The first step to hospital recovery is the collection and analysis of data. Organizations that effectively leverage data to optimize surgery can see rapid, quantifiable, and sustained improvements in metrics that directly link to operational efficiency and associated financial benefits. The current situation presents a unique opportunity for hospitals to implement new tools to recalibrate how surgical services are evaluated, delivered, and experienced by the patient and provider. Doing this now will accelerate resolving the backlog, better positioning the organization to handle the day-to-day schedule moving forward with unprecedented confidence and clarity.

Heading down the path now to leverage historical and current data will enable health care organizations to create a robust, data-driven, surgical management plan to overcome the backlog created by the pandemic. A data-first strategy will also allow hospitals to better prepare for future disasters and re-establish a solid revenue stream sooner. Who knows? They may even grow market share.

Michael Woods is a health care executive.

Image credit: Shutterstock.com

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