A&M’s “Barometer of the Post-COVID Healthcare Economy” report unveils 2020 market data and trends of top 25 not-for-profit health systems.

Leading global professional services firm Alvarez & Marsal (A&M) has released an exclusive, in-depth report, detailing the “drastic impact” of COVID-19 on healthcare providers. A&M’s Healthcare Industry Group analyzed data from the top 25 not-for-profit U.S. health systems, to assess the significant impact the pandemic had on the economy and healthcare organizations, in particular.

A&M’s report, “Barometer of the Post-COVID Healthcare Economy: Financial Trends and Insights from the Top 25 Not-for-Profit Health Systems,” shows how the COVID-19 pandemic affected the financial and operating performance of some of the nation’s largest health systems. 

Peter Urbanowicz, former Chief of Staff of the U.S. Department of Health and Human Services, and currently Managing Director and Co-Head of A&M’s Healthcare Industry Group, authored the report along with Managing Director, John McLean, III, and Senior Associate, John Hazel. Their analysis covers more than 1000 hospitals, about one-third of all non-profit hospitals in the nation.

“Many of the near- and long-term effects of the COVID-19 pandemic on hospitals and the healthcare industry are only now being understood as the historic program of federal government financial aid expires. Despite an onslaught of COVID-19 patients, other patient volumes dropped precipitously during the pandemic and revenues plummeted for nearly all of the large not-for-profit hospital systems,” said Mr. Urbanowicz. “The results of our study should be of interest to all hospital system leaders as they continue to navigate their return to pre-pandemic volume levels, while they look to use the pandemic experience as turning point to drive longer lasting improvements to their bottom line.”

The “Barometer of the Post-COVID Healthcare Economy: Financial Trends and Insights from the Top 25 Not-for-Profit Health Systems,” research and analysis found that:

• Net Patient Revenue plunged almost 20 percent from the fourth quarter of 2019 to the second quarter of 2020 as the country locked down.
• The infusion of federal CARES Act funding enabled revenue to recover at the end of the 2020 calendar year to a drop of just 3 percent from 2019 to 2020.
• Operating income declined 11 percent from 2019 to 2020.
• Discharges decreased 18 percent (4th quarter 2019 to 2nd quarter 2020) and 9 percent year to year (2019 to 2020).
• Patient Days dropped 13 percent (4th quarter 2019 to 2nd quarter 2020) and 4 percent year to year (2019 to 2020).
• Length of Stay increased 7 percent (4th quarter 2019 to 2nd quarter 2020) and 6 percent year to year (2019 to 2020).
• Surgeries fell 36 percent (4th quarter 2019 to 2nd quarter 2020) and 11 percent year to year (2019 to 2020).
• Emergency Room visits declined 31 percent (4th quarter 2019 to 2nd quarter 2020) and 17 percent year to year (2019 to 2020).

According to the report, the drop of almost 10 percent in inpatient discharges while the length of stay increased by six percent, suggests a higher level of acuity in admitted patients, presumably from sustained COVID-19 volumes. “What will be more telling, as health systems continue to recover, is the impact from declined surgical and emergent volumes, which are down 11 percent and 17 percent, year over year, and in particular, what actions we see on the part of health system executive teams to either ‘bring back’ or offset these deflated volumes”, said John McLean.

A&M will continue to analyze the sustained impact of key revenue drivers and innovate on solutions to address resulting challenges. By generating this report quarterly, A&M will remain engaged and monitor trends driving the health system economy and recovery, stemming from the unique market dynamics of 2020.

About Alvarez & Marsal

Companies, investors and government entities around the world turn to Alvarez & Marsal (A&M) for leadership, action and results. Privately held since its founding in 1983, A&M is a leading global professional services firm that provides advisory, business performance improvement and turnaround management services. When conventional approaches are not enough to create transformation and drive change, clients seek our deep expertise and ability to deliver practical solutions to their unique problems.

With over 5,400 people across four continents, we deliver tangible results for corporates, boards, private equity firms, law firms and government agencies facing complex challenges. Our senior leaders, and their teams, leverage A&M’s restructuring heritage to help companies act decisively, catapult growth and accelerate results. We are experienced operators, world-class consultants, former regulators and industry authorities with a shared commitment to telling clients what’s really needed for turning change into a strategic business asset, managing risk and unlocking value at every stage of growth.

To learn more, visit: AlvarezandMarsal.com. Follow A&M on LinkedIn, Twitter, and Facebook.

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Kelsey Eidbo, Infinite Global, +1 415-505-0392

Sandra Sokoloff, Senior Director of Global Public Relations, Alvarez & Marsal, 212-763-9853