Your Budget Has Been Slashed! Now What?

Your Budget Has Been Slashed! Now What?

How to Succeed in the Midst of Challenging Dynamics

By Lee Ann Lambdin

Note: This post is an excerpt from my SHSMD 2021 conference presentation. You can download the slide deck from this presentation here.

It’s true, the COVID-19 pandemic has been unlike anything our healthcare system has seen in recent history. In many cases, teams have been short-staffed and budget dollars reallocated. How can growth departments rebound from such challenges, often with no additional resources? By learning from those familiar with overcoming similar obstacles. 

Staying nimble and adaptable in the face of challenges is something many veterans know how to do well. Experienced leaders are accustomed to making adjustments when there are unplanned changes, budget reductions, or higher demands on the same few resources. 

Over the past year, I’ve worked alongside and advised numerous Stratasan clients as they’ve navigated shifting priorities and supported their staff through COVID-19 related challenges. In this post, I’ll share how I’ve seen these hospitals respond and how we can all learn from their experiences.

I’ll also share some of Stratasan’s story of rebounding from loss. I’ll provide some of the insights we’ve learned on how to focus priorities, make risk/reward calculations, and automate more.

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The COVID Impact

The COVID pandemic reorganized the strategic direction of hospitals everywhere. It led to budget cuts, resource reallocations, shifted priorities, and in some cases, layoffs or staffing moves.

One large teaching hospital shifted its focus from traditional planning and marketing to COVID education. They later shifted again to testing and vaccination work. They also implemented Epic, an EMR system, with no Epic staff on-site, making videos in-house for staff training. This hospital lost staff after the first COVID wave to agencies and travel staffing. Their strategy to make it through COVID was to focus on communication with their providers and their medical staff. They talked to physicians often about what was going on in their practices and the hospital. This helped them determine what actions they should take on education and communication.

Another one of our clients went from Manager of Business Development and Marketing to, in her words, traffic controller and condolence coordinator - determining which patients got a bed, and where, and informing family when their loved ones had passed away. Most of their marketing budget was dedicated to purchasing PPE. Much of their nursing staff left for travel nurse jobs that paid significantly more.

With one client, a large national health system, top leadership took pay cuts, and all construction not yet started was put on hold. 

Finally, another hospital dedicated all its marketing resources to COVID education. Their CMO became the “local Dr. Fauci” and was a trusted source of health information and guidance in the community. 

There are some universal themes to be found in how all these hospitals dealt with COVID. Travel was halted and growth plans were put on hold. There was a shift in focus and resources to COVID education and treatment. 

Aside from the reallocation of resources and little to no focus on growth, these hospitals had another thing in common—creativity. They had to find creative ways to deal with the quickly changing dynamics—to adapt, adjust, and reimagine how their day-to-day would look while the pandemic took over.

Staying creative, nimble, and adaptable in the face of challenges is something many veterans know how to do well. Experienced leaders are accustomed to making adjustments when there are population changes, budget reductions, natural disasters, or higher demands on the same few resources.

The tools and instincts needed to deal with COVID are not unique or limited to this particular crisis. For example, one of our clients shared about when Hurricane Michael hit the gulf coast and she was temporarily the marketing director since the position wasn’t filled during the crisis. Hurricanes or other natural disasters, like COVID, can call for fast thinking and in-the-moment pivots.

We’ve all had turbulent times in our careers. COVID is the most recent, and for most of us, including myself, the most impactful trial we’ve experienced. Knowing that these challenges will come, again and again, I wanted to share some of the ways the team at Stratasan has learned to endure and grow from them.

How Growth Departments Rebound: The Entrepreneurial Approach

Stratasan received funding in May 2011 with the goal of being the trusted source for hospitals and health systems in need of planning and marketing data analytics tools and services. We are a software company and also provide analytics and consulting services, but we weren’t the only ones. We entered a mature market with some big players. 

We’ve now reached the 10-year mark, where most new businesses would have failed already. According to the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years.

Since our founding, we’ve had some opportunities to fail, too—once in 2015 and again in 2020. In 2015 we lost 40% of our revenue when two of our clients merged with other health systems who were not working with us. We halted growth plans, only lost one employee, and hung on. We focused on supporting the clients we had, keeping morale up, and not losing employees. We got those clients back over the next year and this time they were bigger, as they were now part of larger systems. 

From March through April 2020, we received no new contracts at all and ended the year growing 40% due to the “lucky” rollout of a new product. Our new product was the Market Reimbursement Analyzer (MRA) which was created to compare reimbursement rates by payer, service lines, and providers, something hospitals and payers were both interested in even during COVID. We had no idea MRA would be the product to sustain us through a pandemic, but it just so happened to be the right product, at the right time, for our team.

Many hospitals who were ahead of the game with their telehealth strategy—having begun to build out this offering in 2019 or earlier—experienced a similar amount of luck during COVID. Those hospitals looked like geniuses in March 2020!  

However, what if your hospital wasn’t one of the lucky ones? What if your organization had just spent $8M in capital expenditures for equipment to provide some great new surgical offering, and then surgeries dropped 30% in Q2 2020? 

Whether your team falls in the category of having experienced a few lucky wins in 2020 or not, I have some entrepreneurial advice to share on how to bounce back from tough times, learn from the experiences of the last 18 months, and shift gears back into growth mode. Here are three tips for how to endure, successfully (check out these webinar slides for two bonus tips!):

  1. Reorganize priorities and shift focus: If you lose staff during times of crisis, or staff has to focus somewhere outside their normal role, you’ll have to figure out how to grow services at your hospital or health system with fewer resources. To begin, you’ll have to reorganize priorities. For instance, if you were planning a surgery center that has now been put off until 2023, your priorities must shift to services that people need right now. Focus on service lines that provide the most profit, volume, or whatever’s most important to your organization and needed by the community.

    As the COVID crisis fades in your community, you can return your focus to service lines that have been postponed. You can do this by leveraging your differentiators effectively. If you’re known for cardiac for instance, focus on getting those patients back first. If you have a well-known and respected cancer center, focus on cancer screenings people put off during COVID. If you’re a women’s hospital, you can also focus on screenings women may have put off as well. Whatever differentiates you in the market, focus on that first, then move to other areas over time as COVID continues to subside. 

  2. Make risk/reward calculations: Developers use the philosophy of a Minimum Viable Product (MVP). An MVP is a version of a product with just enough features to be usable by early customers who can then provide feedback for future product development. A focus on releasing an MVP means that developers potentially avoid lengthy and unnecessary work. Software companies (typically) use this concept, but hospitals and health systems can use it too with the rollout of new offerings such as telehealth, making risk/reward calculations as they go. What’s the risk of releasing something that’s at an MVP stage? What’s the potential reward of being the first to market? Is the risk worth the reward?

    We have a client with a hospital in New Jersey who worked with a risk/reward mindset during COVID. They had nurses traveling from their other hospitals to New Jersey early in COVID who jumped in and began work with no orientation. Orientation is usually a month or so long. They made a risk/reward calculation. The reward of having enough nurses was worth the risk of skipping orientation. 

Additionally, this same hospital in New Jersey had staff reuse masks. At the end of a shift, they put their masks in a paper bag with their name on it. Hospitals don’t typically “reuse“ hardly anything! This was huge. But the reward of being protected was higher than the risk of reusing a mask. 

  1. Automate: Automation accelerated during COVID. One of our clients shared that their Operations and Service Lines Group got a request from their CMO: he needed three reports that he received at three different times during the day, combined into one report.  The analytics department hooked into the three sources and created one report, which is now produced and auto-email delivered to their CMO’s inbox every morning.

    Another report this team automated was their quarterly market share report by product line. They used Alteryx to combine automated text with a Tableau dashboard and created push emails to all of their executives. The report picks out the big trends with large volume or revenue drops.

    Especially in times of crisis when demands are filing in from every direction, looking for opportunities to increase productivity through automation is key. Teams must find ways to work smarter, not harder, as the saying goes. The important part of automating is finding out what is important to your executives and building from there.

    With Stratasan’s market data visualization tool, you can update your market share by service line, product line, or by sub-product line, and these reports will automatically update as new data is available. If you need help setting this up, your Customer Success Manager can help you build this report—we’ll guide you through the process, and then it can run, on its own behind the scenes, without you having to worry about it again. Click here to read a first-hand account of how this automated market share reporting is benefiting the team at Lexington Medical Center.
    Check out this post for more ideas on how to “automate your busy work.”

The Takeaway

While the COVID pandemic is the most recent, and for most of us, the most impactful experience of our lifetime, it certainly won’t be the last difficult time we’ll endure. I believe we can learn from the past though, and pull wisdom from these tough times. We can look back and see how we overcame, identify what worked and what didn’t, and then move forward more equipped to handle the next crisis. 

I hope the stories of other hospitals, shared in this post, will help you and your team feel less isolated and even a bit encouraged—we’re all in this together and can find courage in our common experiences. I also hope that these entrepreneurially-minded tips will provide inspiration for how your team can grow in the months ahead as we (hopefully) draw closer to the end of this current crisis.

Again, this post is an excerpt from my SHSMD 2021 conference presentation. You can download the slide deck from this presentation here.

Article by Lee Ann Lambdin, FACHE, SVP Healthcare Strategy for Stratasan 

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