Pandemic dominates list of issues facing health system pharmacy
For 2022, at least in the first quarter, the pandemic again dominates our list. The country currently has experienced over 44M cases with 800K deaths. There are signs that the delta wave has run its course and cases are declining but if we have learned anything from the past year it is that the virus is resilient and unpredictable! With a second pandemic winter to deal with, many of the country’s hospitals will need help. Overall, 80+% of hospitals are still struggling with being short-staffed and backlogged from the last wave of COVID-19 as well as challenged financially with increased expenses and decreased revenue. Hospitals are now looking at colder months with a potentially bad influenza season creating a possible “twindemic” situation, an influx of patients trying to catch up on delayed care and a depleted workforce that has had little time — if any — to regroup from the last wave of coronavirus infections. Hospitals are looking at a possible “perfect storm” of high demand, high acuity, and low staffing for the beginning of 2022.
The national vaccination rate remains below 70% and in many states below 50% despite the effectiveness of the Covid vaccines, creating significant regional variance in the pandemic impact. As a result, the country is now experiencing a pandemic of the unvaccinated with 95+% of Covid admissions due to unvaccinated individuals and 99% of deaths occurring in unvaccinated individuals. The need for continued education around vaccines and the de-escalation of political rhetoric associated with “anti-vaccination” should be a continued 2022 priority.
Financially, the hospital market segment remains in need of help with expense and revenue challenges driven by the continued impact of the pandemic. Overall, 80+% of hospitals are still struggling. Key market elements include:
- Hospitals showed improvement over this time last year (~ 25% before the delta wave), but the majorities are still not back to 2019 pre-pandemic levels.
- Non-COVID admissions, ED visits, Clinic visits and Elective surgeries are variable across the country with nationwide volumes down compared to pre-pandemic numbers. In some systems electives were up and being booked out 2-3 months; generally ED visits have not returned. However, before the delta variant wave ~ 50% were back to pre-pandemic levels, which surprised many in the industry.
- The average operating margin for hospitals nationally is unfavorable at 1-3%.
- Last year many health systems achieved or nearly achieved their budget due to CARES funding. Another $75 billion has been released to fund the hardest hit hospitals – safety net and rural. Applications for these funds must be made.
- Additionally, CMS made advance Medicare payments to hospitals to cushion the balances sheets. Those funds will be paid back over 12 months beginning this past April.
While all of this creates major challenges for the nation’s hospitals, with big challenges also come big opportunities and the pandemic continues to create opportunities for pharmacy to step up and provide material relief to the financial and clinical challenges created by the pandemic. Pharmacy can and should be a major component of the strategic and tactical hospital response plans for 2022.