The COVID-19 recession is the first pandemic-driven downturn of the modern era. It is a healthcare crisis, leading to an economic slump. While the capacity shortages, service mix shifts, and workforce/supply chain disruption that made headlines when the pandemic took root have moderated to the point where the integrity of the healthcare system is no longer threatened, providers must still worry about what’s ahead. In a recession, they will likely see lower patient volumes, unfavorable changes in the revenue mix and diminished levels of philanthropy/governmental support.
While some hospitals have the liquidity to better weather the effects of such revenue storms than others, none are completely safe. The lack of certainty regarding the time frame and magnitude adds further complexity. The possibility that the pandemic may manifest itself in waves, is a huge complicating factor. A return to policy measures adopted to slow the transmission of the disease would again have devastating effect, especially if it curtailed elective procedures again. On the other hand, a vaccine(s) may initiate a rapid turnaround, assuming that it is widely available, efficacious and finds a willing population to be inoculated.
To say we are in uncharted waters is clearly an understatement.
However, even without a clear line of sight, it is possible to identify patterns in consumers’ behaviors that appear to be fundamental in any recession. Likewise, looking at organizations that have navigated other downturns, we can see strategies that tend to either promote or undermine financial performance during them. The important lessons gleaned from both these things can be applied, with some judiciousness, to the current situation. This series of blog posts is designed to help healthcare decision-makers mitigate the expected decline in patient volumes through best practices around marketing investment.
We will start this analysis in our next post by looking at the inflection point of any recession — consumer spending.