How Healthcare Providers Can Prepare for the Impact of Inflation
April 12, 2022
In the beginning of the year, the U.S. inflation rate hit 7.5% (the highest it’s been in 40 years). The impact of this surge has been felt in every corner of the economy. While gas prices and groceries have topped the headlines, healthcare isn’t far behind. Rising costs have primarily been delayed across the healthcare industry but are expected to become an area of concern as institutions wade through labor and supply shortages while re-entering price negotiations with insurers.
In the event that inflation begins to take its toll on the healthcare industry, it will impact costs for both providers and their patients – costs that will ultimately trickle down to patients. And while there’s no simple solution to prevent inflation from coming into play, there are steps healthcare providers can take to better navigate these unpredictable times.
For most healthcare practices, supply chain issues result in shortages or slowed delivery times. In the past, stockpiling and bulk buying have been go-tos to stay ahead of supply chain challenges. These approaches can work in the short term, but as a more sustainable solution, providers could start building relationships directly with suppliers to establish rapport and potentially devise an agreement to stabilize costs and ensure the continued availability of critical supplies. Also, be open to exploring new suppliers. Alternative options emerge every day and reevaluating your partnerships can help you find better pricing and products.
Let tech lend a helping hand
From filing to planning to budgeting and managing supplies, roughly a quarter of the $4 trillion spent on healthcare annually in the U.S. goes toward administrative work. While this essential work cannot be eliminated, optimizing it with new technologies could help providers save on spending as inflation drives costs up.
Providers could consider automating administrative processes like scheduling, patient portal management and billing. Productivity tools that utilize artificial intelligence could also streamline clinical workflows and simplify documentation. By supporting these processes with new technologies, providers can establish a more streamlined and budget-friendly workflow.
Prepare for insurance impacts
Providers should take into account that inflation may soon increase the premiums patients pay for coverage. Some may have dodged an increase this year due to the end-of-year cutoff for certain types of plans, but in case higher costs are on the horizon, be prepared to answer questions or point patients to the resources they need.
While you can’t control the cost of health insurance, you can make sure your patients have the tools they need to handle any shifting costs. Providing patients with affordable and flexible financing options can aid them in navigating cost uncertainty and help ensure they’re able to cover the cost of treatments.
Prioritize your people
Almost one in five healthcare workers have left their jobs since the start of the COVID-19 pandemic. This exodus certainly left a gap in coverage, but more importantly, it highlighted the need for a close look at working conditions and expectations in the healthcare field. As providers emerge from the pandemic and look to manage the impact of inflation, it will be essential to not lose sight of the lessons of COVID-19. Remember your employees are facing the effects of inflation too.
While salary increases may be one of the more efficient (yet, costly) solutions, there are additional steps you can take to support your team. Emphasizing well-being and work-life balance, along with offering tools and opportunities for career growth and advancement are all great first steps. By providing for your staff, you’ll ensure they’re in the best position, mentally and physically, to provide the best care for your patients.
Navigating an uncertain landscape
Inflation has made the road ahead an uncertain one for most industries, and healthcare is no exception. By building a strong foundation that allows for flexibility during these unpredictable times, healthcare providers can stay resilient today and for years to come.
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