For-profit systems fare better than nonprofits in weathering COVID-19 cash crisis, MedPAC says

https://www.fiercehealthcare.com/hospitals/medpac-for-profit-systems-do-better-job-than-nonprofits-weathering-covid-19-cash-crisis?mkt_tok=eyJpIjoiTlRJM05qVmhOVEptWm1ZNSIsInQiOiJaRHlaWHpyaHVZUHlvTFwvZmRaZDZKUVY2aEJka25ncStYSmcxZXo3bTR5TzV3NFE0YzdpYlpGMGRrbUxkcWVYT0Z4ZTVMa0VPN3BuSElkMldQRXBpTk1pbnN1T3VoalNXd0JzTU9aYngwazltVXRud0hISVppZnF2OHU0bFwvVzN6In0%3D&mrkid=959610

For-profit health systems have been better able to weather a financial crisis caused by COVID-19 than their nonprofit counterparts because they could reduce more expenses, a new analysis from the Medicare Payment Advisory Commission finds.

The analysis released Thursday during MedPAC’s monthly meeting comes as providers struggle to recover from low patient volumes stemming from the COVID-19 pandemic. The report also explored how physician offices have fared.

Hospitals faced a massive dip in patient volume in March and April at the onset of the pandemic, which forced facilities to cancel or delay elective procedures. Patient volumes have since recovered to near pre-pandemic levels, MedPAC found.

But the recovery has been mixed depending on the hospital system.

MedPAC looked at earnings for three large nonprofit systems in the U.S. and four large for-profit systems in the second quarter and found a variation in how they handled the decline in revenue.

Aggregate patient revenue for the nonprofit systems declined by $1.5 billion and this led to a $621 million loss for the systems in the second quarter compared to the same period in 2019. Overall the systems had operating profit margins ranging from negative 13% to positive 5%.

The four for-profit systems saw a $3.5 billion decline in patient revenue. However, the systems posted an increase of $634 million in operating income.

This led to a range of operating margin increases of 1 to 14% in the second quarter compared to 2019.

The for-profit systems got more relief funding ($1.9 billion compared with $782 million) from a $175 billion federal provider relief fund created by the CARES Act.

But the biggest difference between for-profit and nonprofit systems was how they handled expenses.

“For-profit systems substantially reduced expenses in the second quarter, in aggregate reduced by $2.3 billion and that made up for lost revenue,” said Jeff Stensland, a MedPAC staff member, during the meeting.

Nonprofit systems only saw a $13 million decline in expenses.

The analysis comes as some larger for-profit systems like HCA Healthcare generate profits in the second quarter, while nonprofit systems such as Providence posted losses.

MedPAC did not name the systems that it analyzed nor did it delve into what expenses were reduced and how.

Some systems have taken to furloughing employees but all systems have faced increased expenses for personal protective equipment and some staff.

The analysis also looked at the financial impact of the pandemic on physician offices. MedPAC found that federal grants, loans and payment increases offset a majority of the revenue lost in March and May due to patient volume declines.

MedPAC estimated physician offices lost between $45 to $55 billion. However, offices got $26 billion in loans from the Paycheck Protection Program, which don’t have to be repaid if the majority of the funds go to payroll.

Physician offices also received $5 billion out of the $175 billion provider relief fund passed as part of the CARES Act.

Physicians also got $1 billion in savings from the temporary suspension of a 2% decline in Medicare payments created under sequestration.

 

 

 

2020 Hospital Operating Margins Down 96% Through July

https://www.prnewswire.com/news-releases/2020-hospital-operating-margins-down-96-through-july-301116888.html

Ship in a Storm | ICOExaminer

Hospital Operating Margins have plunged 96% since the start of 2020 in comparison with the first seven months of 2019, according to a new Kaufman Hall report, as uncertainty and volatility continue in the wake of the COVID-19 pandemic.

Those results do not include federal funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Even with that aid, however, Operating Margins are down 28% year-to-date compared to January-July 2019.

Operating Margins fell 2% year-over-year in July without the CARES Act relief, according to the latest edition of Kaufman Hall’s National Hospital Flash Report. Hospitals also saw flat year-over-year gross revenue performance in July, continued high per-patient expenses, and a fifth consecutive month of volumes falling below 2019 performance and below budget.

From June to July, however, hospital Operating Margins were up 24%, likely due to a backlog in demand resulting from the shutdown of many non-urgent services in the early months of the pandemic.

“COVID-19 has created a highly volatile operating environment for our nation’s hospitals and health systems,” said Jim Blake, managing director, Kaufman Hall. “Hospitals have shown some incremental signs of potential financial recovery in recent months. Unfortunately, there is no guarantee these trends will continue, and hospitals still have a long way to go to recover from devastating losses in the early months of the pandemic.”

July volumes continued to fall year-over-year, but showed some signs of potential recovery month-over-month. Adjusted Discharges were down 7% compared to July 2019, but up 6% compared to June 2020. Adjusted Patient Days were down 4% year-over-year, but up 7% month-over-month. Adjusted Discharges are down 13% and Adjusted Patient Days are down 11% since the start of 2020, compared to the first seven months of 2019.

Hospital Emergency Department (ED) volumes have been hardest hit, falling 17% year-to-date compared to the same period in 2019, down 17% year-over-year, and 13% below budget in July. Surgery volumes saw some gains with the continued resumption of non-urgent procedures pushing Operating Room Minutes up 3% month-over-month and 4% above budget in July, but they remain down 15% year-to-date.

Not including CARES Act relief, Gross Operating Revenues were essentially flat year-over-year and 2% below budget for the month, but have fallen 8% year-to-date compared to the same period in 2019. Inpatient Revenue is down 5% year-to-date and fell 3% below budget in July, but increased 1% year-over-year. Outpatient Revenue is down 11% year-to-date, 1% year-over-year, and 2% below budget.

Hospitals nationwide also continued to see higher per-patient expenses despite having fewer patients. Total Expense per Adjusted Discharge has jumped 16% year-to-date compared to the same seven-month period in 2019, and rose 9% year-over-year and 5% above budget in July. Labor Expense per Adjusted Discharge is up 18% year-to-date and rose 9% year-over-year and 5% above budget in July. Non-Labor Expense per Adjusted Discharge has increased 15% during the first seven months of 2020 and jumped 11% year-over-year and was 5% above budget for the month.

The National Hospital Flash Report draws on data from more than 800 hospitals.

 

 

 

 

AdventHealth posts $799M operating loss in Q2

https://www.beckershospitalreview.com/finance/adventhealth-posts-799m-operating-loss-in-q2.html?utm_medium=email

AdventHealth Acquires Top Cardiovascular Surgical Group - Orlando ...

AdventHealth, a 46-hospital system based in Altamonte Springs, Fla., reported a decline in revenue in the second quarter of this year and ended the period with an operating loss, according to recently released unaudited financial documents

The health system reported revenues of $2.8 billion in the three months ended June 30, down from $2.9 billion in the same period a year earlier. The decline was attributed to lower patient volumes from mid-March through early May. On a same-facility basis, hospital admissions were down 29 percent year over year in April, and surgical volumes were down 66 percent.

Expenses climbed 2.8 percent year over year, and AdventHealth ended the second quarter of this year with an operating loss of $799 million. In the same period a year earlier, the system posted operating income of $190.9 million.

After factoring in nonoperating items, including a $291.8 million gain on investments, the system reported net income of $290.8 million in the second quarter of 2020. In the same period last year, the system posted net income of $372.8 million.

Looking at the first six months of this year, AdventHealth reported a net loss of $287.7 million on revenues of $5.8 billion. That’s compared to the first half of 2019, when the system recorded net income of $865 million on revenues of $5.9 billion.

 

 

 

Revenues and volumes have fallen ‘off a cliff’ hospital executives tell American Hospital Association

https://www.healthcarefinancenews.com/news/aha-releases-case-studies-us-hospitals-and-health-systems-highlighting-financial-challenges

Revenues and volumes have fallen 'off a cliff' hospital executives ...

Eight health systems in AHA case study are asking Congress for more relief funding.

The American Hospital Association has released eight case studies from hospitals and health systems across the country that highlight how systems of different shapes and sizes are reacting to the financial challenges posed by COVID-19.

The case studies include Kindred Healthcare and TIRR Memorial Hermann in Houston; AdventHealth Central Florida Division in Orlando, Florida; the Loretto Hospital in Chicago; Kittitas Valley Healthcare in Ellensburg, Washington; Washington Regional Medical Center in Fayetteville, Arkansas; Banner Health in Phoenix; UR Medicine Thompson Health in Canandaigua, New York; and the Queen’s Health Systems and the Queen’s Medical Center in Honolulu.

Across the board, every case study revealed that hospitals and health systems are asking Congress for more relief funding.

“We are begging for more assistance and more help because we can’t keep moving forward,” said Michael Stapleton, the president and CEO of UR Medicine Thompson Health in New York.

WHAT’S THE IMPACT?

In Texas, the state with the third most COVID-19 cases, Kindred Healthcare and TIRR Memorial Hermann have begun to rely on inpatient rehabilitation facilities and long-term acute care hospitals to treat COVID-19-positive and medically complex recovering COVID-19 patients.

“In particular, as communities and hospitals struggled to meet ICU capacity needs, these hospitals stepped forward to take care of COVID-19-positive patients and others to help provide beds for more COVID-19-positive patients,” the case study said.

However, even with assistance from local facilities, post-acute care providers have incurred increased costs to prepare for and treat COVID-19-positive patients and complex post-COVID-19 patients.

“When you look at lost revenue and volumes, and the additional costs of ramping up to prepare for COVID-19, whether it’s personal protective equipment, respiratory systems, medications or facility infrastructure changes, there are significant dollars associated with that,” said Jerry Ashworth, the senior vice president and CEO at TIRR Memorial Hermann.

AdventHealth in Florida has taken financial hits from declining elective procedures and purchasing personal protective equipment. The company says it has lost $263 million since the start of the pandemic and has spent $254 million sourcing PPE.

“Florida is in the middle of the crisis,” said Todd Goodman, division chief financial officer of AdventHealth. “Our current COVID numbers are four times higher than the peak that we had back in April. We are bringing in higher-priced nurses and staff from other parts of the nation, because of a rapid increase in inpatient census. We are in a different place today than we were even six weeks ago.”

COVID-19 has disproportionately affected communities of color across the country, but especially in Chicago, where 30% of the population is Black. Forty-six percent of all COVID-19 cases and 57% of all deaths are Black people.

Despite having 70% of its admissions being related to COVID-19, the Loretto Hospital in Chicago has not received any funds from the Coronavirus Aid, Relief, and Economic Security Act hot spot distribution.

“Our COVID-19 unit is full and has been for the last three months; we’re now at 296 COVID-19 patients [on July 16] and yet we’ve not received any of the COVID-19 high impact ‘hot spot’ payments,” said George Miller, the president and CEO of the Loretto Hospital. “We got the Small Business Administration loan to help keep our team members employed.”

Kittitas Valley Healthcare in Washington was among the first in the country to feel the impact of COVID-19. The rural delivery system and its critical access hospital postponed elective surgeries and many other nonessential services in response.

“Our revenues and volumes fell off a cliff,” said Julie Petersen, the CEO of Kittitas Valley Healthcare. “Our orthopedics programs, our GI [gastrointestinal] programs and cataract surgeries evaporated.”

Now, the hospital is off its original 2020 net revenue projections by $8.4 million.

After seeing a 12% rise in COVID-19 cases over a two-week period in Fayetteville, Arkansas, the Washington Regional Medical Center had 96% of its 40 intensive care unit beds occupied, a 20-bed COVID-19 ICU was completely full, and 298 of the facility’s 315 adult beds were occupied.

Taking care of these patients put the health system in a financial crisis. Its net patient revenue declined by $14 million in April. It furloughed 350 of its 3,300 employees and reduced the hours of 360 full-time workers, according to Larry Shackelford, the president and CEO of Washington Regional Medical Center.

On July 12, Banner Health in Arizona had more than 1,500 inpatients who either tested COVID-positive or are suspected of having COVID-19, representing 45% of the COVID-19 inpatient hospitalizations in the state, according to Dr. Marjorie Bessel, the chief clinical officer at Banner Health.

Banner expects operating losses of $500 million for 2020, compared to its initial expectations, with expected revenue losses approaching $1 billion for the year, according to the case study.

By mid-March, New York had 15 times more COVID-19 cases than any other state, according to the case study. Like the rest of the state, UR Medicine Thompson Health shut down many of its services, resulting in “insurmountable” financial losses and staff furloughs.

“Our first projection was a $17 million loss through the year-end,” Stapleton said. “We lost half of March, all of April and half of May. The hospital has received only $3.1 million from the CARES Act tranche payments.”

Although the Queen’s Health Systems and the Queen’s Medical Center in Hawaii are starting to reschedule appointments, surgeries and procedures that had been delayed by COVID-19, patients aren’t coming back as anticipated.

Even with the pent-up demand for elective procedures, minimally invasive and even short-stay procedures are still down by about 18%. We are seeing our in-person clinic visits down by about 14%, and the emergency department (ED) is the one that surprised us the most – down by 38%,” said Jason Chang, president of the Queen’s Medical Center and chief operating officer of the Queen’s Health Systems and the Queen’s Medical Center.

The systems lost $127 million between March and May, according to Chang. He says the projected losses are about $60 million for 2021, but could reach $300 million if Hawaii experiences a second wave of COVID-19.

THE LARGER TREND

The AHA has cited $323 billion in losses industry-wide due to the ongoing COVID-19 pandemic, with U.S. hospitals anticipating about $120 billion in losses from July to December alone.

It was joined by the American Nurses Association and the American Medical Association to ask Congress to provide additional funding to the original $100 billion from the CARES Act. In a letter sent in July, the organizations asked for “at least an additional $100 billion to the emergency relief fund to provide direct funding to front line health care personnel and providers, including nurses, doctors, hospitals and health systems, to continue to respond to this pandemic.”

 

 

 

 

Providence posts $538M loss, lays out 3-part strategic plan

https://www.beckershospitalreview.com/finance/providence-posts-538m-loss-lays-out-3-part-strategic-plan.html?utm_medium=email

Providence St. Joseph Health Consolidates 14 Hospitals in SoCal ...

Providence, a 51-hospital system based in Renton Wash., received $651 million in federal grants in the first half of this year, but it wasn’t enough to offset the system’s losses tied to the COVID-19 pandemic. 

The health system reported revenues of $12.5 billion in the first six months of this year, down from $12.6 billion in the same period a year earlier, according to financial documents released Aug. 17. Though the health system reported a rebound in patient volumes after the suspension of non-emergency procedures in March and April, net patient service revenue was down 10 percent year over year.

Providence’s expenses also increased. For the first two quarters of this year, the health system reported operating expenses of $12.7 billion, up 3 percent year over year. The increase was attributed to higher labor costs and increased personal protective equipment and pharmaceutical spend.

Reduced patient volumes combined with increased costs drove an operating loss of $221 million in the first half of this year. In the first half of 2019, Providence reported operating income of $250 million.

After factoring in nonoperating items, Providence ended the first six months of 2020 with a net loss of $538 million, compared to net income of $985 million in the same period of 2019.

To help offset financial damage, Providence received $651 million in federal grants made available under the Coronavirus Aid, Relief and Economic Security Act. 

“We knew we were in for a marathon the moment we admitted our first patient with COVID-19 seven months ago,” Providence President and CEO Rod Hochman, MD, said in an earnings release. “Our caregivers have been on the front lines ever since, and we are incredibly proud and grateful for all they are doing to serve our communities during the greatest crisis of our lifetime.”

In its earnings release, Providence mapped out a three-part plan for the future. As part of that plan, the system said it is focused on improving testing capacity and turnaround times and advancing clinical research and best practices in the treatment of COVID-19. The system is also revising its operating model and cost structure. 

 

 

Kaiser’s net income more than doubles to $4.5B in Q2

https://www.beckershospitalreview.com/finance/kaiser-s-net-income-more-than-doubles-to-4-5b-in-q2.html?utm_medium=email

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After reporting a $1.1 billion net loss in the first quarter, Kaiser Permanente’s revenue, operating income and net income for its nonprofit hospital and health plan units increased year over year in the second quarter of this year. 

The Oakland, Calif.-based healthcare giant reported operating revenues of $22.1 billion in the second quarter of 2020, up 3.3 percent from the same period a year earlier. Kaiser also saw expenses decline about 1.5 percent year over year to $20 billion.

“Deferred elective surgeries and procedures due to stay-at-home orders across the communities we serve contributed heavily to our second quarter results by temporarily reducing our operating expenses,” Executive Vice President and CFO Kathy Lancaster said in an earnings release.

Kaiser spent $907 million on capital projects in the second quarter, up from $710 million in the same period a year earlier. The system made investments in technology and infrastructure, including reconfiguring hospitals and building new clinical capacity to care for COVID-19 patients.

The 39-hospital system ended the second quarter of this year with operating income of $2.1 billion, up from $1.1 billion in the same quarter last year. 

Kaiser’s unique integrated model — it provides healthcare and health plans — makes it difficult to compare its financial results to those of other systems that do not receive member premiums. As of June 30, Kaiser had 12.4 million health plan members, 183,000 more than in December. Most of the growth occurred during open enrollment, which occurred pre-COVID-19, Kaiser Senior Vice President and Treasurer Tom Meier told Becker’s Hospital Review.

As a result of improved financial market conditions in the second quarter, the system reported strong growth in investment returns, Mr. Meier told Becker’s. That recovery pushed Kaiser’s net income to $4.5 billion in the second quarter of this year, up from $2 billion in the same period of 2019. In the first quarter of this year, Kaiser reported a nonoperating loss of $2.4 billion, generated largely by investment losses.

As the system continues to navigate the challenges of the COVID-19 pandemic, ensuring patients and health plan members have access to needed care and testing is a top priority, Chair and CEO Greg Adams said in an earnings release.

“We have now reintroduced care that was halted during the stay-at-home orders, expanded our services, especially virtual care, and are working with members to schedule care that may have been deferred,” Mr. Adams said. “Moreover, we are working to expand our testing capabilities by purchasing our own testing equipment and building Kaiser Permanente testing labs, partnering with state and local health departments to support robust contact tracing, helping to slow the spread of the virus through education and household prevention kits, and helping our customers maintain their health coverage through these difficult times.”

Looking at results for the first six months of this year, Kaiser reported net income of $3.4 billion on revenues of $44.7 billion. In the same period a year earlier, the system posted net income of $5.2 billion on revenues of $42.8 billion. 

 

 

Pandemic relief funds pivotal in keeping hospitals afloat during Q2

https://www.fiercehealthcare.com/hospitals/hospital-earnings-highlight-pivotal-role-federal-relief-funds-staying-afloat-during?mkt_tok=eyJpIjoiTURoaU9HTTRZMkV3TlRReSIsInQiOiJwcCtIb3VSd1ppXC9XT21XZCtoVUd4ekVqSytvK1wvNXgyQk9tMVwvYXcyNkFHXC9BRko2c1NQRHdXK1Z5UXVGbVpsTG5TYml5Z1FlTVJuZERqSEtEcFhrd0hpV1Y2Y0sxZFNBMXJDRkVnU1hmbHpQT0pXckwzRVZ4SUVWMGZsQlpzVkcifQ%3D%3D&mrkid=959610

Hospital system earnings for the second quarter of the year painted a stark picture of how federal relief funding helped offset massive losses in patient volume sparked by the COVID-19 pandemic.

But a full financial recovery may not happen until next year, some analysts warn.

Major hospital systems such as HCA Health and Universal Health Services posted profits in the second quarter despite plummeting volumes sparked by the cancellation of elective procedures and patients avoiding care due to fears of exposure to the virus. A key boost, however, came from a $175 billion fund passed by Congress and loans under the Medicare Accelerated and Advance Payments Program.

“These companies survived the June quarter and exited the quarter with substantial amounts of liquidity,” said Jonathan Kanarek, vice president and senior credit officer for Moody’s Investors Services. “We think [liquidity] is probably the most critical factor for them as far as weathering the storm.”

Congress has approved $175 billion to help prop up providers, of which the Department of Health and Human Services has distributed more than $100 billion.

The Centers for Medicare & Medicaid Services also gave out $100 billion in advance Medicare payments before suspending the program in late April. But the payments are loans that hospitals have to start repaying as soon as this month, as opposed to the congressional funding that does not have to get paid back.

Hospital system earnings illustrated how pivotal the relief funds were to combat massive holes in patient volumes.

Tenet Healthcare, which operates 65 hospitals across the country, reported Monday that it earned in the second quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $732 million. But of that $732 million, more than 70% of it was aid from the relief fund.

Tenet wasn’t the only for-profit system where relief funding was a large part of their adjusted EBITDA.

Community Health Systems, which operates 95 facilities, reported an adjusted EBITDA of $454 million in the second quarter. But most of that figure was due to the $448 million that it got from the relief funds.

The provider funding made up a smaller portion of HCA Healthcare’s earnings. The system of 184 hospitals reported that the funding made up 31% of its adjusted EBITDA.

Hospital system volumes greatly declined in April as facilities were forced to cancel elective procedures and patients were scared of going to the hospital.

For example, Tenet’s hospital admissions in April were 33% of what it had in the same month in 2019. But volumes started to recover as shelter-in-place orders expired and some states got a better handle on the pandemic.

Tenet saw admissions grow in June to 90% of what they were in June 2019.

But it remains unclear what hospital finances will look like for the rest of the year. Major systems like Tenet and HCA have scrapped their 2020 financial outlook because of the pandemic.

“We don’t think the shape of this recovery or trajectory will be linear in nature,” Kanarek said. “We think there will be a lot of starts and stops.”

Those starts and stops will depend on the extent of the spread of the virus in an area.

Some states such as Florida, Texas and Arizona have seen massive spikes in the virus in recent weeks, which has put renewed strain on systems. Texas’ governor canceled elective procedures in eight counties back in June, some of which included major cities such as Houston and Dallas.

“I am a little skeptical that we are going to be back to normal before we ultimately have a vaccine,” Kanarek said.

It is also murky on whether hospitals will continue to get more financial help from Congress.

The House passed the HEROES Act more than a month ago that gives providers another $100 billion, but it has stalled in the Senate.

Congress and the White House have been in extensive talks for more than a week on a new relief package. Senate Majority Leader Mitch McConnell released a package last week that had $25 billion in relief funding and lawsuit liability protections for providers.

But even without the additional funding, for-profit hospitals have made some moves to prepare for more shutdowns such as accessing capital markets to add additional lawyers of bank liquidity, Kanarek said.

“We can only hope 2021 will look like a more normal year for hospitals, perhaps more like 2019, but there is still a lot of uncertainty out there,” he said.

 

 

 

 

Industry Voices—6 ways the pandemic will remake health systems

https://www.fiercehealthcare.com/hospitals/industry-voices-6-ways-pandemic-will-remake-health-systems?mkt_tok=eyJpIjoiTURoaU9HTTRZMkV3TlRReSIsInQiOiJwcCtIb3VSd1ppXC9XT21XZCtoVUd4ekVqSytvK1wvNXgyQk9tMVwvYXcyNkFHXC9BRko2c1NQRHdXK1Z5UXVGbVpsTG5TYml5Z1FlTVJuZERqSEtEcFhrd0hpV1Y2Y0sxZFNBMXJDRkVnU1hmbHpQT0pXckwzRVZ4SUVWMGZsQlpzVkcifQ%3D%3D&mrkid=959610

Industry Voices—6 ways the pandemic will remake health systems ...

Provider executives already know America’s hospitals and health systems are seeing rapidly deteriorating finances as a result of the coronavirus pandemic. They’re just not yet sure of the extent of the damage.

By the end of June, COVID-19 will have delivered an estimated $200 billion blow to these institutions with the bulk of losses stemming from cancelled elective and nonelective surgeries, according to the American Hospital Association

A recent Healthcare Financial Management Association (HFMA)/Guidehouse COVID-19 survey suggests these patient volumes will be slow to return, with half of provider executive respondents anticipating it will take through the end of the year or longer to return to pre-COVID levels. Moreover, one-in-three provider executives expect to close the year with revenues at 15 percent or more below pre-pandemic levels. One-in-five of them believe those decreases will soar to 30 percent or beyond. 

Available cash is also in short supply. A Guidehouse analysis of 350 hospitals nationwide found that cash on hand is projected to drop by 50 days on average by the end of the year — a 26% plunge — assuming that hospitals must repay accelerated and/or advanced Medicare payments.

While the government is providing much needed aid, just 11% of the COVID survey respondents expect emergency funding to cover their COVID-related costs.

The figures illustrate how the virus has hurled American medicine into unparalleled volatility. No one knows how long patients will continue to avoid getting elective care, or how state restrictions and climbing unemployment will affect their decision making once they have the option.

All of which leaves one thing for certain: Healthcare’s delivery, operations, and competitive dynamics are poised to undergo a fundamental and likely sustained transformation. 

Here are six changes coming sooner rather than later.

 

1. Payer-provider complexity on the rise; patients will struggle.

The pandemic has been a painful reminder that margins are driven by elective services. While insurers show strong earnings — with some offering rebates due to lower reimbursements — the same cannot be said for patients. As businesses struggle, insured patients will labor under higher deductibles, leaving them reluctant to embrace elective procedures. Such reluctance will be further exacerbated by the resurgence of case prevalence, government responses, reopening rollbacks, and inconsistencies in how the newly uninsured receive coverage.

Furthermore, the upholding of the hospital price transparency ruling will add additional scrutiny and significance for how services are priced and where providers are able to make positive margins. The end result: The payer-provider relationship is about to get even more complicated. 

 

2. Best-in-class technology will be a necessity, not a luxury. 

COVID has been a boon for telehealth and digital health usage and investments. Two-thirds of survey respondents anticipate using telehealth five times more than they did pre-pandemic. Yet, only one-third believe their organizations are fully equipped to handle the hike.

If healthcare is to meet the shift from in-person appointments to video, it will require rapid investment in things like speech recognition software, patient information pop-up screens, increased automation, and infrastructure to smooth workflows.

Historically, digital technology was viewed as a disruption that increased costs but didn’t always make life easier for providers. Now, caregiver technologies are focused on just that.

The new necessities of the digital world will require investments that are patient-centered and improve access and ease of use, all the while giving providers the platform to better engage, manage, and deliver quality care.

After all, the competition at the door already holds a distinct technological advantage.

 

3. The tech giants are coming.

Some of America’s biggest companies are indicating they believe they can offer more convenient, more affordable care than traditional payers and providers. 

Begin with Amazon, which has launched clinics for its Seattle employees, created the PillPack online pharmacy, and is entering the insurance market with Haven Healthcare, a partnership that includes Berkshire Hathaway and JPMorgan Chase. Walmart, which already operates pharmacies and retail clinics, is now opening Walmart Health Centers, and just recently announced it is getting into the Medicare Advantage business.

Meanwhile, Walgreens has announced it is partnering with VillageMD to provide primary care within its stores.

The intent of these organizations clear: Large employees see real business opportunities, which represents new competition to the traditional provider models.

It isn’t just the magnitude of these companies that poses a threat. They also have much more experience in providing integrated, digitally advanced services. 

 

4. Work locations changes mean construction cost reductions. 

If there’s one thing COVID has taught American industry – and healthcare in particular – it’s the importance of being nimble.

Many back-office corporate functions have moved to a virtual environment as a result of the pandemic, leaving executives wondering whether they need as much real estate. According to the survey, just one-in-five executives expect to return to the same onsite work arrangements they had before the pandemic. 

Not surprisingly, capital expenditures, including new and existing construction, leads the list of targets for cost reductions.

Such savings will be critical now that investment income can no longer be relied upon to sustain organizations — or even buy a little time. Though previous disruptions spawned only marginal change, the unprecedented nature of COVID will lead to some uncomfortable decisions, including the need for a quicker return on investments. 

 

5. Consolidation is coming.

Consolidation can be interpreted as a negative concept, particularly as healthcare is mostly delivered at a local level. But the pandemic has only magnified the differences between the “resilients” and the “non-resilients.” 

All will be focused on rebuilding patient volume, reducing expenses, and addressing new payment models within a tumultuous economy. Yet with near-term cash pressures and liquidity concerns varying by system, the winners and losers will quickly emerge. Those with at least a 6% to 8% operating margin to innovate with delivery and reimagine healthcare post-COVID will be the strongest. Those who face an eroding financial position and market share will struggle to stay independent..

 

6. Policy will get more thoughtful and data-driven.

The initial coronavirus outbreak and ensuing responses by both the private and public sectors created negative economic repercussions in an accelerated timeframe. A major component of that response was the mandated suspension of elective procedures.

While essential, the impact on states’ economies, people’s health, and the employment market have been severe. For example, many states are currently facing inverse financial pressures with the combination of reductions in tax revenue and the expansion of Medicaid due to increases in unemployment. What’s more, providers will be subject to the ongoing reckonings of outbreak volatility, underscoring the importance of agile policy that engages stakeholders at all levels.

As states have implemented reopening plans, public leaders agree that alternative responses must be developed. Policymakers are in search of more thoughtful, data-driven approaches, which will likely require coordination with health system leaders to develop flexible preparation plans that facilitate scalable responses. The coordination will be difficult, yet necessary to implement resource and operational responses that keeps healthcare open and functioning while managing various levels of COVID outbreaks, as well as future pandemics.

Healthcare has largely been insulated from previous economic disruptions, with capital spending more acutely affected than operations. But the COVID-19 pandemic will very likely be different. Through the pandemic, providers are facing a long-term decrease in commercial payment, coupled with a need to boost caregiver- and consumer-facing engagement, all during a significant economic downturn.

While situations may differ by market, it’s clear that the pre-pandemic status quo won’t work for most hospitals or health systems.

 

 

 

The Future of Hospitals in Post-COVID America (Part 1): The Market Response

Click to access CBC_72_08052020_Final.pdf

 

[Readers’ Note: This is the first of two articles on the Future of Hospitals in Post-COVID America. This article
examines how market forces are consolidating, rationalizing and redistributing acute care assets within the
broader industry movement to value-based care delivery. The second article, which will publish next month,
examines gaps in care delivery and the related public policy challenges of providing appropriate, accessible
and affordable healthcare services in medically-underserved communities.]

In her insightful 2016 book, The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore,
Michelle Wucker coins the term “Gray Rhinos” and contrasts them with “Black Swans.” That distinction is
highly relevant to the future of American hospitals.

Black Swans are high impact events that are highly improbable and difficult to predict. By contrast, Gray
Rhinos are foreseeable, high-impact events that we choose to ignore because they’re complex, inconvenient
and/or fortified by perverse incentives that encourage the status quo. Climate change is a powerful example
of a charging Gray Rhino.

In U.S. healthcare, we are now seeing what happens when a Gray Rhino and a Black Swan collide.
Arguably, the nation’s public health defenses should anticipate global pandemics and apply resources
systematically to limit disease spread. This did not happen with the coronavirus pandemic.

Instead, COVID-19 hit the public healthcare infrastructure suddenly and hard. This forced hospitals and health systems to dramatically reduce elective surgeries, lay off thousands and significantly change care delivery with the adoption of new practices and services like telemedicine.

In comparison, many see the current American hospital business model as a Gray Rhino that has been charging toward
unsustainability for years with ever-building momentum.

Even with massive and increasing revenue flows, hospitals have long struggled with razor-thin margins, stagnant payment rates and costly technology adoptions. Changing utilization patterns, new and disruptive competitors, pro-market regulatory rules and consumerism make their traditional business models increasingly vulnerable and, perhaps, unsustainable.

Despite this intensifying pressure, many hospitals and health systems maintain business-as-usual practices because transformation is so difficult and costly. COVID-19 has made the imperative of change harder to ignore or delay addressing.

For a decade, the transition to value-based care has dominated debate within U.S. healthcare and absorbed massive strategic,
operational and financial resources with little progress toward improved care outcomes, lower costs and better customer service. The hospital-based delivery system remains largely oriented around Fee-for-Service reimbursement.

Hospitals’ collective response to COVID-19, driven by practical necessity and financial survival, may accelerate the shift to value-based care delivery. Time will tell.

This series explores the repositioning of hospitals during the next five years as the industry rationalizes an excess supply of acute care capacity and adapts to greater societal demands for more appropriate, accessible and affordable healthcare services.

It starts by exploring the role of the marketplace in driving hospital consolidation and the compelling need to transition to value-based care delivery and payment models.

COVID’s DUAL SHOCKS TO PATIENT VOLUME

Many American hospitals faced severe financial and operational challenges before COVID-19. The sector has struggled to manage ballooning costs, declining margins and waves of policy changes. A record 18 rural hospitals closed in 2019. Overall, hospitals saw a 21% decline in operating margins in 2018-2019.

COVID intensified those challenges by administering two shocks to the system that decreased the volume of hospital-based activities and decimated operating margins.

The first shock was immediate. To prepare for potential surges in COVID care, hospitals emptied beds and cancelled most clinic visits, outpatient treatments and elective surgeries. Simultaneously, they incurred heavy costs for COVID-related equipment (e.g. ventilators,PPE) and staffing. Overall, the sector experienced over $200 billion in financial losses between March and June 20204.

The second, extended shock has been a decrease in needed but not necessary care. Initially, many patients delayed seeking necessary care because of perceived infection risk. For example, Emergency Department visits declined 42% during the early phase of the pandemic.

Increasingly, patients are also delaying care because of affordability concerns and/or the loss of health insurance. Already, 5.4 million people have lost their employer-sponsored health insurance. This will reduce incremental revenues associated with higher-paying commercial insurance claims across the industry. Additionally, avoided care reduces patient volumes and hospital revenues today even as it increases the risk and cost of future acute illness.

The infusion of emergency funding through the CARES Act helped offset some operating losses but it’s unclear when and even whether utilization patterns and revenues will return to normal pre-COVID levels. Shifts in consumer behavior, reductions in insurance coverage, and the emergence of new competitors ranging from Walmart to enhanced primary care providers will likely challenge the sector for years to come.

The disruption of COVID-19 will serve as a forcing function, driving meaningful changes to traditional hospital business models and the competitive landscape. Frankly, this is long past due. Since 1965, Fee-for-Service (FFS) payment has dominated U.S. healthcare and created pervasive economic incentives that can serve to discourage provider responsiveness in transitioning to value-based care delivery, even when aligned to market demand.

Telemedicine typifies this phenomenon. Before COVID, CMS and most health insurers paid very low rates for virtual care visits or did not cover them at all. This discouraged adoption of an efficient, high-value care modality until COVID.

Unable to conduct in-person clinical visits, providers embraced virtual care visits and accelerated its mass adoption. CMS and
commercial health insurers did their part by paying for virtual care visits at rates equivalent to in-person clinic visits. Accelerated innovation in care delivery resulted.

 

THE COMPLICATED TRANSITION TO VALUE

Broadly speaking, health systems and physician groups that rely almost exclusively on activity-based payment revenues have struggled the most during this pandemic. Vertically integrated providers that offer health insurance and those receiving capitated payments in risk-based contracts have better withstood volume losses.

Modern Healthcare notes that while provider data is not yet available, organizations such as Virginia Care Partners, an integrated network and commercial ACO; Optum Health (with two-thirds of its revenue risk-based); and MediSys Health Network, a New Yorkbased NFP system with 148,000 capitated and 15,000 shared risk patients, are among those navigating the turbulence successfully. As the article observes,

providers paid for value have had an easier time weathering the storm…. helped by a steady source of
income amid the chaos. Investments they made previously in care management, technology and social
determinants programs equipped them to pivot to new ways of providing care.

They were able to flip the switch on telehealth, use data and analytics to pinpoint patients at risk for
COVID-19 infection, and deploy care managers to meet the medical and nonclinical needs of patients even
when access to an office visit was limited.

Supporting this post-COVID push for value-based care delivery, six former leaders from CMS wrote to Congress in
June 2020 calling for providers, commercial insurers and states to expand their use of value-based payment models to
encourage stability and flexibility in care delivery.

If value-based payment models are the answer, however, adoption to date has been slow, limited and difficult. Ten
years after the Affordable Care Act, Fee-for-Service payment still dominates the payer landscape. The percentage of
overall provider revenue in risk-based capitated contracts has not exceeded 20%

Despite improvements in care quality and reductions in utilization rates, cost savings have been modest or negligible.
Accountable Care Organizations have only managed at best to save a “few percent of Medicare spending, [but] the
amount varies by program design.”

While most health systems accept some forms of risk-based payments, only 5% of providers expect to have a majority
(over 80%) of their patients in risk-based arrangements within 5 years.

The shift to value is challenging for numerous reasons. Commercial payers often have limited appetite or capacity for
risk-based contracting with providers. Concurrently, providers often have difficulty accessing the claims data they need
from payers to manage the care for targeted populations.

The current allocation of cost-savings between buyers (including government, employers and consumers), payers
(health insurance companies) and providers discourages the shift to value-based care delivery. Providers would
advance value-based models if they could capture a larger percentage of the savings generated from more effective
care management and delivery. Those financial benefits today flow disproportionately to buyers and payers.

This disconnection of payment from value creation slows industry transformation. Ultimately, U.S. healthcare will not
change the way it delivers care until it changes the way it pays for care. Fortunately, payment models are evolving to
incentivize value-based care delivery.

As payment reform unfolds, however, operational challenges pose significant challenges to hospitals and health
systems. They must adopt value-oriented new business models even as they continue to receive FFS payments. New
and old models of care delivery clash.

COVID makes this transition even more formidable as many health systems now lack the operating stamina and
balance sheet strength to make the financial, operational and cultural investments necessary to deliver better
outcomes, lower costs and enhanced customer service.

 

MARKET-DRIVEN CONSOLIDATION AND TRANSFORMATION

Full-risk payment models, such as bundled payments for episodic care and capitation for population health, are the
catalyst to value-based care delivery. Transition to value-based care occurs more easily in competitive markets with
many attributable lives, numerous provider options and the right mix of willing payers.

As increasing numbers of hospitals struggle financially, the larger and more profitable health systems are expanding
their networks, capabilities and service lines through acquisitions. This will increase their leverage with commercial
payers and give them more time to adapt to risk-based contracting and value-based care delivery.

COVID also will accelerate acquisition of physician practices. According to an April 2020 MGMA report, 97% of
physician practices have experienced a 55% decrease in revenue, forcing furloughs and layoffs15. It’s estimated the
sector could collectively lose as much as $15.1 billion in income by the end of September 2020.

Struggling health systems and physician groups that read the writing on the wall will pro-actively seek capital or
strategic partners that offer greater scale and operating stability. Aggregators can be selective in their acquisitions,
seeking providers that fuel growth, expand contiguous market positions and don’t dilute balance sheets.

Adding to the sector’s operating pressure, private equity, venture investors and payers are pouring record levels of
funding into asset-light and virtual delivery companies that are eager to take on risk, lower prices by routing procedures
and capture volume from traditional providers. With the right incentives, market-driven reforms will reallocate resources
to efficient companies that generate compelling value.

As this disruption continues to unfold, rural and marginal urban communities that lack robust market forces will
experience more facility and practice closures. Without government support to mitigate this trend, access and care gaps
that already riddle American healthcare will unfortunately increase.

 

WINNING AT VALUE

The average hospital generates around $11,000 per patient discharge. With ancillary services that can often add up to
more than $15,000 per average discharge. Success in a value-based system is predicated on reducing those
discharges and associated costs by managing acute care utilization more effectively for distinct populations (i.e.
attributed lives).

This changes the orientation of healthcare delivery toward appropriate and lower cost settings. It also places greater
emphasis on preventive, chronic and outpatient care as well as better patient engagement and care coordination.
Such a realignment of care delivery requires the following:

 A tight primary care network (either owned or affiliated) to feed referrals and reduce overall costs through
better preventive care.

 A gatekeeper or navigator function (increasingly technology-based) to manage / direct patients to the most
appropriate care settings and improve coordination, adherence and engagement.

 A carefully designed post-acute care network (including nursing homes, rehab centers, home care
services and behavioral health services, either owned or sufficiently controlled) to manage the 70% of
total episode-of-care costs that can occur outside the hospital setting.

 An IT infrastructure that can facilitate care coordination across all providers and settings.

Quality data and digital tools that enhance care, performance, payment and engagement.

Experience with managing risk-based contracts.

 A flexible approach to care delivery that includes digital and telemedicine platforms as well as nontraditional sites of care.

Aligned or incentivized physicians.

Payer partners willing to share data and offload risk through upside and downside risk contracts.

Engaged consumers who act on their preferences and best interests.

 

While none of these strategies is new or controversial, assembling them into cohesive and scalable business models is
something few health systems have accomplished. It requires appropriate market conditions, deep financial resources,
sophisticated business acumen, operational agility, broad stakeholder alignment, compelling vision, and robust
branding.

Providers that fail to embrace value-based care for their “attributed lives” risk losing market relevance. In their relentless pursuit of increasing treatment volumes and associated revenues, they will lose market share to organizations that
deliver consistent and high-value care outcomes.

CONCLUSION: THE CHARGING GRAY RHINO

America needs its hospitals to operate optimally in normal times, flex to manage surge capacity, sustain themselves
when demand falls, create adequate access and enhance overall quality while lowering total costs. That is a tall order
requiring realignment, evolution, and a balance between market and policy reform measures.

The status quo likely wasn’t sustainable before COVID. The nation has invested heavily for many decades in acute and
specialty care services while underinvesting, on a relative basis, in primary and chronic care services. It has excess
capacity in some markets, and insufficient access in others.

COVID has exposed deep flaws in the activity-based payment as well as the nation’s underinvestment in public health.
Disadvantaged communities have suffered disproportionately. Meanwhile, the costs for delivering healthcare services
consume an ever-larger share of national GDP.

Transformational change is hard for incumbent organizations. Every industry, from computer and auto manufacturing to
retailing and airline transportation, confronts gray rhino challenges. Many companies fail to adapt despite clear signals
that long-term viability is under threat. Often, new, nimble competitors emerge and thrive because they avoid the
inherent contradictions and service gaps embedded within legacy business models.

The healthcare industry has been actively engaged in value-driven care transformation for over ten years with little to
show for the reform effort. It is becoming clear that many hospitals and health systems lack the capacity to operate
profitably in competitive, risk-based market environments.

This dismal reality is driving hospital market valuations and closures. In contrast, customers and capital are flowing to
new, alternative care providers, such as OneMedical, Oak Street Health and Village MD. Each of these upstart
companies now have valuations in the $ billions. The market rewards innovation that delivers value.

Unfortunately, pure market-driven reforms often neglect a significant and growing portion of America’s people. This gap has been more apparent as COVID exacts a disproportionate toll on communities challenged by higher population
density, higher unemployment, and fewer medical care options (including inferior primary and preventive care infrastructure).

Absent fundamental change in our hospitals and health systems, and investment in more efficient care delivery and
payment models, the nation’s post-COVID healthcare infrastructure is likely to deteriorate in many American
communities, making them more vulnerable to chronic disease, pandemics and the vicissitudes of life.

Article 2 in our “Future of Hospitals” series will explore the public policy challenges of providing appropriate, affordable and accessible healthcare to all American communities.

 

 

 

What it’s like to be a nurse after 6 months of COVID-19 response

https://www.healthcaredive.com/news/what-its-like-to-be-a-nurse-6-months-coronavirus/581709/

Those on the front lines of the fight against the novel coronavirus worry about keeping themselves, their families and their patients safe.

That’s especially true for nurses seeking the reprieve of their hospitals returning to normal operations sometime this year. Many in the South and West are now treating ICUs full of COVID-19 patients they hoped would never arrive in their states, largely spared from spring’s first wave.

And like many other essential workers, those in healthcare are falling ill and dying from COVID-19. The total number of nurses stricken by the virus is still unclear, though the Centers for Disease Control and Prevention has reported 106,180 cases and 552 deaths among healthcare workers. That’s almost certainly an undercount.

National Nurses United, the country’s largest nurses union, told Healthcare Dive it has counted 165 nurse deaths from COVID-19 and an additional 1,060 healthcare worker deaths.

Safety concerns have ignited union activity among healthcare workers during the pandemic, and also given them an opportunity to punctuate labor issues that aren’t new, like nurse-patient ratios, adequate pay and racial equality.

At the same time, the hospitals they work for are facing some of their worst years yet financially, after months of delayed elective procedures and depleted volumes that analysts predict will continue through the year. Many have instituted furloughs and layoffs or other workforce reduction measures.

Healthcare Dive had in-depth conversations with three nurses to get a clearer picture of how they’re faring amid the once-in-a-century pandemic. Here’s what they said.

Elizabeth Lalasz, registered nurse, John H. Stroger Hospital in Chicago

Elizabeth Lalasz has worked at John H. Stroger Hospital in Chicago for the past 10 years. Her hospital is a safety net facility, catering to those who are “Black, Latinx, the homeless, inmates,” Lalasz told Healthcare Dive. “People who don’t actually receive the kind of healthcare they should in this country.”

Data from the CDC show racial and ethnic minority groups are at increased risk of getting COVID-19 or experiencing severe illness, regardless of age, due to long-standing systemic health and social inequities.

CDC data reveal that Black people are five times more likely to contract the virus than white people.

This spring Lalasz treated inmates from the Cook County Jail, an epicenter in the city and also the country. “That population gradually decreased, and then we just had COVID patients, many of them Latinx families,” she said.

Once Chicago’s curve began to flatten and the hospital could take non-COVID patients, those coming in for treatment were desperately sick. They’d been delaying care for non-COVID conditions, worried a trip to the hospital could risk infection.

A Kaiser Family Foundation poll conducted in May found that 48% of Americans said they or a family member had skipped or delayed medical care because of the pandemic. And 11% said the person’s condition worsened as a result of the delayed care.

When patients do come into Lalasz’s hospital, many have “chest pain, then they also have diabetes, asthma, hypertension and obesity, it just adds up,” she said.

“So now we’re also treating people who’ve been delaying care. But after the recent southern state surges, the hospital census started going down again,” she said.

Amy Arlund, registered nurse, Kaiser Permanente Medical Center in Fresno, California:

Amy Arlund works the night shift at Kaiser Fresno as an ICU nurse, which she’s done for the past two decades.

She’s also on the hospital’s infection control committee, where for years she’s fought to control the spread of clostridium difficile colitis, or C. diff., in her facility. The highly infectious disease can live on surfaces outside the body for months or sometimes years.

The measures Arlund developed to control C. diff served as her litmus test, as “the top, most stringent protocols we could adhere to,” when coronavirus patients arrived at her hospital, she told Healthcare Dive.

But when COVID-19 cases surged in northern states this spring, “it’s like all those really strict isolation protocols that prior to COVID showing up would be disciplinable offenses were gone,” Arlund said.

Widespread personal protective equipment shortages at the start of the pandemic led the CDC and the Occupational Safety and Health Administration to change their longstanding guidance on when to use N95 respirator masks, which have long been the industry standard when dealing with novel infectious diseases.

The CDC also issued guidance for N95 respirator reuse, an entirely new concept to nurses like Arlund who say those changes go against everything they learned in school.

“I think the biggest change is we always relied on science, and we have always relied heavily on infection control protocols to guide our practice,” Arlund said. “Now infection control is out of control, we can no longer rely on the information and resources we always have.”

The CDC says experts are still learning how the coronavirus spreads, though person-to-person transmission is most common, while the World Health Organization recently acknowledged that it wouldn’t rule out airborne transmission of the virus.

In Arlund’s ICU, she’s taken care of dozens of COVID positive patients and patients ruled out for coronavirus, she said. After a first wave in the beginning of April, cases dropped, but are now rising again.

Other changing guidance weighing heavily on nurses is how to effectively treat coronavirus patients.

“Are we doing remdesivir this week or are we going back to the hydroxychloroquine, or giving them convalescent plasma?”Arlund said. “Next week I’m going to be giving them some kind of lavender enema, who knows.”

Erik Andrews, registered nurse, Riverside Community Hospital in Riverside, California:

Erik Andrews, a rapid response nurse at Riverside Community Hospital in California, has treated coronavirus patients since the pandemic started earlier this year. He likens ventilating them to diffusing a bomb.

“These types of procedures generate a lot of aerosols, you have to do everything in perfectly stepwise fashion, otherwise you’re going to endanger yourself and endanger your colleagues,” Andrews, who’s been at Riverside for the past 13 years, told Healthcare Dive.

He and about 600 other nurses at the hospital went on strike for 10 days this summer after a staffing agreement between the hospital and its owner, HCA Healthcare, and SEIU Local 121RN, the union representing RCH nurses, ended without a renewal.

The nurses said it would lead to too few nurses treating too many patients during a pandemic. Insufficient PPE and recycling of single-use PPE were also putting nurses and patients at risk, the union said, and another reason for the strike.

But rapidly changing guidance around PPE use and generally inconsistent information from public officials are now making the nurses at his hospital feel apathetic.

“Unfortunately I feel like in the past few weeks it’s gotten to the point where you have to remind people about putting on their respirator instead of face mask, so people haven’t gotten lax, but definitely kind of become desensitized compared to when we first started,” Andrews said.

With two children at home, Andrews slept in a trailer in his driveway for 12 weeks when he first started treating coronavirus patients. The trailer is still there, just in case, but after testing negative twice he felt he couldn’t spend any more time away from his family.

He still worries though, especially about his coworkers’ families. Some coworkers he’s known for over a decade, including one staff member who died from COVID-19 related complications.

“It’s people you know and you know that their families worry about them every day,” he said. “So to know that they’ve had to deal with that loss is pretty horrifying, and to know that could happen to my family too.”