The Covid-19 crisis has caused the world economy to come to a screeching halt. Employers have the very difficult task of managing both human capital and financial capital. As anesthesia providers, it feels as though we are taking a double hit in some ways. Surgery volumes are down more than 80%, many anesthesia providers are being asked to serve as intensivists and financially-speaking, all of anesthesia is taking quite a haircut. Unless you are diagnosed with the coronavirus or have a close family member who has it, the primary concern of most people is the short-term and long-term financial impact of this crisis event. Anesthesia companies, anesthesiologists and nurse anesthetists are currently enduring difficult financial times, with many providers being either furloughed or laid off. Some anesthesia groups have found ways to keep staff employed, albeit at reduced pay, until elective surgeries are rescheduled. These groups are certainly admirable for their generosity, but what if the surgery volume deficit lasts for two or three months? How long can the economy suffer and how long can anesthesia groups hold it together? Employers should consider three things to be financially successful through the crisis:
Pre-Crisis Financial Soundness
Companies that had well-managed finances during the period of time leading up to the Covid-19 crisis will be best positioned to weather this economic storm. Companies that are strangled with debt or have exhausted all of their avenues for capital are going to have a very difficult time making it through this crisis with their group intact. Groups should have funding to cover at least three payrolls in the bank in case of times like these. For larger groups, a portion of that cash could be in the form of a line of credit that is easily accessible. It is much easier to weather the storm if you enter it with a recent history of solid financials. The saying, “cash is king,” always proves to be true during tough times. Being financially overleveraged when going into a crisis can be fatal.
Early in the process, employers need to begin thinking about the end of the crisis, even though lack of visibility makes this difficult. Companies need to develop a short plan or model that carries them from current day to the end of the crisis. At the beginning of the crisis, you are forced to guess at what that end date is and looks like. However, as days and weeks pass by, this picture will become clearer. For these reasons, the short-term plan needs to be dynamic. If the crisis should happen to be shorter or last longer than anticipated, the plan can be contracted or extended accordingly. The plan should have milestones for everyone in the organization with concrete goals and timelines. These milestones should include operational, financial and contractual items. The milestones will give team members a sense of time and progress.
Finding the Opportunity
Employers will feel as though they are drowning at certain times during a crisis. Keeping your head far enough above water to see the big picture is a challenge for many. It is easy to become bogged down by so many different issues being brought to your attention daily and living in a survival mindset. However, leaders should take time each day to refresh their perspective and mindset. In times of crisis, leaders need to be looking for opportunities that will launch their company forward when the crisis ends. There are opportunities out there and employers should be intentional in seeking those out and being ready to act when they present themselves. This is how you come out of a crisis stronger than when you entered it.