Archetype in brief
Health systems in survival mode are not growing. They are trying to stave off decline. They are likely to have negative operating margins, limited non-operating investments, and negligible cash reserves.
What this archetype looks like on the ground
Health systems in survival mode were likely struggling financially before the pandemic. The drop in volume, shocks to the labor market, and spikes in cost of goods pushed their financial situation from bad to worse. Many of these systems rely heavily on federal emergency funding to prop up their finances. And when those programs end, hospitals in survival mode will face several difficult choices.
In terms of operations, hospitals in survival mode are likely to be reducing FTE count (mostly on the non-clinical side), reexamining all capital expenditures, and shutting down services.
The number one up-at-night issue for survivalist mode is staffing—particularly nursing staff. Because hospitals in this group lack cash reserves to pay for premium labor, they struggle to staff critical hospital functions. This creates a vicious cycle whereby they lack the staff to operate, which dampens their revenue. That, in turn hampers, their ability to pay competitive wages, which leads to understaffed units.
Capital investment for hospitals in this growth archetype was likely modest before the pandemic. All of these health systems are re-evaluating their capital priorities today—likely pulling them back even further. Our survey results point to growth through referrals and maximizing productivity instead of acquisition of complementary provider businesses.
What this archetype should do to succeed
- Network integrity: Maximizing the referrals to the hospital is key. This requires all access points to the system (including the ED, referring physicians, directing contracting, and direct-to-consumer) to be optimized. This is a plan won in increments, and it requires continued effort and vigilance.
- Productivity: Together with network integrity, shortening length of stay and nurse productivity help with margin pressure and ensuring that hospitals capture all available volume. Pulling forward discharge planning, and team-based unit workflow can yield clear returns here.
- Differentiated employee value proposition: Productive hospital operations are impossible without staff. Given the competition for health care talent and the cash limitations of health systems in survival mode, consider focusing on the non-monetary aspects of your employee value proposition—flexibility, individualized career progression, and non-monetary performance recognition.
- Principled service rationalization: Financial pressures can force health systems in this category to shutter services. Proactive evaluation of service lines with an eye for why they may be underperforming before shutting them down can reduce unforced errors.
What others can do to be a better partner to this archetype
- Burnout mitigation and energy management: Survey data shows that clinical staff in the acute care setting are at highest risk of burnout. Strategies, tools, and approaches to helping staff stay resilient will be well received by health systems in this group.
- Task reallocation/outsourcing: Because many health systems in this archetype are under-staffed, any resources or technologies that off-load tasks or make decisions faster are valuable.
- Cost savings/efficiencies: Vendors or partners that provide for immediate, realized cash savings will be in high demand from health systems in survival mode.