Firm News

Partner Kristina Wesch was quoted in the HealthLeaders‘ article, “Trends That Will Add To Financial Distress at Many Hospitals in 2022.” The article analyzes three financial trends that will significantly impact hospitals in 2022.

Kristina explains, “The number one issue that will have a financial impact is the pandemic itself. We’re going on almost two years now. Everybody knows that there was a tremendous loss of revenue for hospitals and health systems due to the postponement of elective surgeries. Even now, many people who would be able to have elective surgeries are not feeling comfortable going into a hospital environment and are choosing not to move forward.”

With a majority of the nation’s hospital and ICU beds being occupied with COVID-19 patients, many people are delaying or canceling elective procedures, which typically generate a great deal of revenue. “We hear a lot about how hospitals are overwhelmed and overflowing with patients. It’s a little counter-intuitive, but I guess if you don’t work in this space you’d be wondering, well, if hospitals are so busy, how could they be financially distressed? But the type of care that COVID patients require generally does not generate high reimbursements.”

Finally, hospitals are in need of new strategies to diversity operations, facilities, and locations while forming partnerships that can generate profits from nontraditional sources. “We’re seeing a lot of that, where hospitals and health systems get into spaces that may be related, but not considered traditional in the past,” Kristina explains.

For hospitals that are already in financial distress, Kristina recommends looking at your lenders as a partner rather than an enemy, considering potential opportunities for expansion, and conducting a critical analysis of what is broken within your organization. “Obviously, we have to treat COVID patients, and we can’t fix the fact that they’re not going to generate a tremendous amount of revenue. But really getting a handle on what is threatening your business plan. Seeing with fresh eyes what works and doesn’t work is often a much better strategy than just jumping into something new,” Kristina concludes.

To read the article, click here.