Covid-19: Results of the new PwC hospital study

© Spitalstudie PwC

The study “Swiss hospitals: How healthy were the finances in 2020” by PwC Switzerland addresses the financial, strategic and operational traces that Covid-19 has left on service providers. The fact is: The pandemic has put enormous strain on the healthcare system.

Schmetotal damage

As a result of the pandemic, Swiss hospitals and clinics had to accept total financial losses (before cantonal contributions) of CHF 1.3 billion to CHF 1.5 billion in the 2020 reporting year. The service providers came under great pressure on the income side. Akutsomatik recorded a sharp decline in sales due to the ban on elective interventions in spring 2020. This was particularly pronounced in the inpatient area with a drop in sales of minus 4.2% compared to the previous year. In the outpatient area, the decline was much less pronounced at minus 0.5%. In psychiatry, sales were only slightly below the previous year’s level, while sales in rehabilitation fell significantly.

Profitability collapsed

The EBITDAR margin of acute hospitals fell from 7.0% in the previous year to 5.3% in 2020. It was thus well below the minimum value of 10% defined by PwC and at the lowest level in the last five years. A similar picture emerges with the EBITDA, EBIT and net profit margins 2020. Only 28% of the acute hospitals examined showed a positive annual result for 2020; for 2019 it was 60%. Covid-19 has made it clear: Financial target values ​​and sufficient profitability in normal years are central to building up reserves for difficult years and coping with crises independently. Swiss hospitals should be able to survive on their own earnings power.

Backlog in digitization

The pandemic has accelerated the digitization of the Swiss healthcare system. The Federal Office of Public Health (BAG) has set an important milestone with the digital Covid certificate. Lukas Engelberger, President of the Conference of Health Directors (GDK) evaluates the digital tools for combating pandemics that have been developed at short notice as a quantum leap in the digital transformation of the healthcare industry. At the same time, he sees a lot of catching up to do, for example with the electronic patient dossier.

Supplementary insurance market on the move

The service providers must develop additional service concepts in a timely manner in order to describe their innovative services in an understandable manner. In the study, Philomena Colatrella, CEO of CSS Insurance, speaks about the potential of flexible and dynamic insurance products with a strong focus on treatment quality.

Future tariff systems

Based on the history of the Swiss tariff landscape, the authors reflect on the outpatient tariff system of the future. For almost a decade now, inpatient service providers have been using flat rates per case according to “Diagnosis Related Groups” (DRG). In the interview, Dr. med. Simon Hölzer, CEO of SwissDRG AG, believes the targeted further development of the DRG catalogs has great development potential (see here, page 36). The experts agree that a tariff system of the future must eliminate false incentives between outpatient and inpatient interventions and ensure the permeability of inpatient and outpatient with outpatient flat rates.

An initiative on behalf of those affected

With the Patient Empowerment Initiative, two insurers and two hospitals want to set a milestone in the direction of quality-oriented remuneration. You want to set an incentive in a pilot project to enable patients to make fact-based and thus more targeted decisions. Because the prevailing volume competition in the Swiss healthcare system creates false incentives, according to which treatment decisions are not always optimal for those affected and, in the worst case, harmful. The tariff system aimed at by the Patient Empowerment Initiative focuses on the quality and benefits of treatments and aims to reduce excess or incorrect care. Affected people take on a more active role in making decisions about their treatment.

Press release PwC

About the study: The study “Swiss Hospitals: Insight into Finances 2020” by PwC Switzerland was carried out in September 2021 on the basis of the annual reports of 45 acute hospitals and 13 psychiatric clinics. For a deeper insight into practice, the study contains various interviews with industry representatives and excursions on special topics.

For more information on the PwC hospital study: www.pwc.ch/de/publications/2021/spitalstudie-2021.pdf

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