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The ‘new normal’ demands new front office strategies

Insights from recent KPMG healthcare provider research


By Alex Tolmasoff, Director, KPMG Sales Transformation and HCLS Lead

Have you ever wondered what hospital leaders and providers think about when patient and provider volumes will return to “normal”?

Striking statistics from recent KPMG research indicate it won’t be soon:1

  • 88%-89% providers believe there won’t be a return to pre-pandemic levels until the second half of 2023
  • Over 40% of sites cut capital budgets in 2020, with more than 20% cutting operating budgets

The COVID-19 pandemic had an unprecedented effect on patients and healthcare providers; to understand the impact and aftereffects on healthcare organizations and how the front office (particularly the sales organization) must retool itself for this “new normal”, KPMG surveyed nearly 100 providers, including surgeons, primary care physicians, and hospital C-suite leaders in mid-2022. The survey set out to gauge provider perspectives in three key areas:

In this - the first in a series of blogs exploring the survey findings – I concentrate on provider expectations related to:

  • COVID-driven “return to normal” timing of patient and elective procedure volumes
  • How leading providers are shifting capital and operating budgets to shorten that timeframe
  • Common obstacles to a “return to normal” and strategies providers are using to overcome them

COVID-driven “return to normal”

A year after the start of the pandemic, patient volumes were still down dramatically (only 70% of normal) through 2021. Volumes are slowly recovering in 2022, with only 66% of respondents expecting a return to normal volumes by Q4. Based on the research, most (~90%) providers believe a return to pre-pandemic levels won’t be until the second half of 2023 (with some even less optimistic).

Patient Volume Return to Normal

Patient Volume Return to Normal

KPMG research shows that, in light of the significant fall in patient volumes and the resultant drop in elective procedures, hospitals are far more optimistic about an early return to normal patient volume (expecting 100% return to normal in 2024 – 2027), while Physician Offices and Other Sites (e.g., ambulatory surgery centers (ASC), long-term acute care hospital (LTAC)) are more pessimistic (with 5-10% expecting patient volumes to never return to normal).

Leading providers are shifting budgets

Capital budgets reduced in 2021 but are recovering; the most common reductions during this time were in capital equipment (56%) and new facilities (37%), whereas patient engagement tech saw an increase in spend in 2021 and 2022 (38%, 44% respectively). 2022 was a recovery year, with increases in multiple capital categories – capital equipment (+21%), general IT infrastructure (+6%), and repair / remodeling facilities (+15%).

Change in Capital Budgets (Related to 2020 Budget)

Change in Capital Budgets (Related to 2020 Budget)

Operating budgets increased in 2021, and again in 2022, with a large majority of providers increasing PPE and medical supply budgets (73% in 2021 and 75% in 2022). The number of providers who increased their nursing and other headcount expenses was more than double the number who decreased spending in that area during 2021 (and nearly five times the number in 2022).

This trend continued across all researched spend areas in 2021 with the number of providers who increased spending on utilities being more than four times the number who decreased spending in this area.

In 2022, 3x-5x more providers increased rather than decreased operating budgets across all categories (>5x for medical supplies / PPE, utilities, and headcount expenses for non-medical staff, >4x for non-MD medical staff, and ~3x for MD medical professionals).

Change in Operations Budgets (Related to 2020 Budget)

Change in Operations Budgets (Related to 2020 Budget)

The large majority of leading organizations increased their operating budgets (76% and 87%, respectively) and capital budgets (55% and 65%) in 2021 and 2022, while only ~5% of laggards increased capital budgets and only ~20% of laggards increased operating budgets.

Common obstacles to a “return to normal”

Post-pandemic, it is perhaps understandable that provider burnout and patient reluctance are seen as the most harmful blocks to a “return to normal”. Supply chain disruptions, physician engagement, increases in regulation compliance, and visitor restrictions had moderate negative impacts on returning to normal

Physician Factors Helping Return to Normal (% in respondents’ top 3 rank order)

Physician Factors Helping Return to Normal (% in respondents’ top 3 rank order)

Many organizations (both leaders and laggards) are focused on physician outreach and better use of patient data to run email, direct mail, and patient portal-based marketing campaigns to attract patients back to their site of care. Leading organizations, in particular, also place a greater emphasis on social media, advertising, and marketing as they seek to reach out and reassure their patients; a number of leading organizations are also focused on stimulating routine patient screenings and preventive care as they attempt to reduce the damaging effect of patients’ reticence to return

Actions Taken to Attract Patients Back to Site of Care

Actions Taken to Attract Patients Back to Site of Care


There appears to be light at the end of the tunnel, with budgets increasing, patient volumes returning to normal, and strong investments in programs and technology to mitigate COVID-driven changes. Understanding how both leading and lagging organizations have been impacted will be critical to developing the right front-office strategies for effective sales, marketing, and service model changes.

For sales leaders in particular, you should consider the following to help mitigate the impacts of recent years:

  • Adjust your revenue forecasts and align your goals – use insights like those gathered in our study to identify when patient and procedure volumes will return to normal. Update revenue forecasts accordingly, then update sales team and individual goals and quotas. Look at headcount to ensure it aligns with productivity assumptions and update sales compensation as needed to support new goals and any new revenue growth strategies.
  • Assess capital equipment models – given capital budgets have been hit hard, it’s time to innovate the sales model. Consider new roles, such as inside sales, ecommerce, and virtual sales. Refresh your installed base data with the help of service techs and provide service lead generation incentives. Consider alternative financing models and X-as-a-service options. Evaluate talent and use the opportunity to shake up the status quo.
  • Support IT and staffing investments – even if you don’t do staffing or IT, know their landscape, and needs - this is business-critical. Train your sales teams on tech stacks that they may interact with or could influence your sales. Show sensitivity to provider staffing issues and burnout through training, program investments, education, and beneficial staffing partnerships.
  • Be prepared for pricing and contracting discussions – with operating expenses up for most providers, be prepared to be asked for price concessions and contract term changes. Ensure your rank-and-file sellers are ready for these conversations through training, tools, and process adjustment (e.g., Configure, Price, Quote (CPQ)). Make sure your product strategy and priorities are clear to sellers through communication, training, and compensation. Relook at your key account program for Integrated Delivery Networks (IDNs) and Group Purchasing Organizations (GPOs) to ensure your team is prepared with enough headcount, talent, and relevant value messaging and calculators to support value-based conversations.
  • Focus resources on patient engagement and marketing support – leading organizations are making big investments in these areas to get patients to return faster. Train sellers on patient engagement platforms and process, and partner with patient engagement platforms to support your customers. Help lagging organizations learn from what leading organizations are doing, and create programs that can help them market themselves, drive traffic, and connect with current and future patients. Ensure your sales and marketing teams know how to effectively work together to support these programs for the benefit of providers and patients.

See the next blog in our series on how technology will shape future operations in light of COVID impacts.

  1. Source: KPMG Pulse Survey, Summer 2022

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