COVID-19’s financial toll is beginning to reveal itself. Many health systems are seeing revenues slashed in half and supply costs surging. There’s uncertainty about when and how quickly service volumes will return. Health systems and the provider community will especially be impacted economically and financially for years to come.
In the meantime, early impacts are startling. Consider, for example, that the Mayo Clinic projected a USD 3 billion revenue shortfall in 2020 and is expected to experience a USD 2 billion loss this year. In contrast, last year, they broke a financial record with nearly USD 1 billion in operating margin, according to Oliver Wyman Health & Life Sciences Partners Minoo Javanmardian, PhD, and Ashley Smith and Dan Shellenbarger, Global Head, Provider in Oliver Wyman’s Health & Life Sciences Practice.
News like this hits at a time when things like employment, consumer preferences, and where and how people receive care are all being turned upside down. The future of what a post-pandemic landscape holds means a return to the status quo operating model is not a viable future option. Hospitals and health systems must systematically rethink operations and transform their business models.