Approaching a “new normal” for healthcare volumes?

https://mailchi.mp/45f15de483b9/the-weekly-gist-october-9-2020?e=d1e747d2d8

Eight months into COVID-19, national healthcare volumes are still lagging pre-pandemic levels. The graphic above shows highlights from Strata Decision Technology’s recent analysis of volume data from 275 hospitals nationwide between March and August, and reveals that inpatient, and especially emergency department, volumes are still well below 2019 levels. 

This isn’t surprising. Consumer confidence in healthcare facilities hasn’t changed much since April, with many still reporting feeling unsafe in emergency care and hospital settings. Even some outpatient providers are still seeing lags compared to last year.

While outpatient volume as a whole has rebounded, critical outpatient diagnostics, including mammographies and colonoscopies, are still down significantly, leading to reduced downstream oncology and surgical volume as well, at least in the short-term.
 
COVID-19 is also accelerating the outmigration of high-margin surgical procedures like total knee replacements. Comparing a two-week period in August to the same period last year reveals that inpatient knee procedures are down by nearly 40 percent, while similar outpatient procedures are up over 80 percent.

As Strata Executive Director Steve Lefar said in a recent conversation with Gist Healthcare Daily’s Alex Olgin, these data expose “an elasticity of demand the healthcare industry never even knew existed” and that “the demand curve for healthcare services may be permanently adjusted because people are just changing their behaviors.” 

While we expect volumes will ebb and flow over coming months in step with the local severity of COVID-19, health systems should plan for a longer-term “new normal” with volume below pre-pandemic levels.

Moody’s: Hospital financial outlook worse as COVID-19 relief funds start to dwindle

https://www.fiercehealthcare.com/hospitals/moody-s-hospital-financial-outlook-worse-as-covid-19-relief-funds-start-to-dwindle?mkt_tok=eyJpIjoiWTJZek56Z3lNV1E0TW1NMyIsInQiOiJKdUtkZE5DVGphdkNFanpjMHlSMzR4dEE4M29tZ24zek5lM3k3amtUYSt3VTBoMmtMUnpIblRuS2lYUWozZk11UE5cL25sQ1RzbFpzdExcL3JvalBod3Z6U3BZK3FBNjZ1Rk1LQ2pvT3A5Witkc0FmVkJocnVRM0dPbFJHZTlnRGJUIn0%3D&mrkid=959610

For-profit hospitals are expected to see a financial decline over the next 12 to 18 months as federal relief funds that shored up revenue losses due to COVID-19 start to wane, a recent analysis from Moody’s said.

The analysis, released Monday, finds that cost management is going to be challenging for hospital systems as more surgical procedures are expected to migrate away from the hospital and people lose higher-paying commercial plans and go to lower-paying government programs such as Medicaid.

“The number of surgical procedures done outside of the hospital setting will continue to increase, which will weaken hospital earnings, particularly for companies that lack sizeable outpatient service lines (including ambulatory surgery centers),” the analysis said.

A $175 billion provider relief fund passed by Congress as part of the CARES Act helped keep hospital systems afloat in March and April as volumes plummeted due to the cancellation of elective procedures and reticence among patients to go to the hospitals.

Some for-profit systems such as HCA and Tenet pointed to relief funding to help generate profits in the second quarter of the year. The benefits are likely to dwindle as Congress has stalled over talks on replenishing the fund.

“Hospitals will continue to recognize grant aid as earnings in Q3 2020, but this tailwind will significantly moderate after that,” Moody’s said.

Cost cutting challenges

Compounding problems for hospitals is how to handle major costs.

Some hospital systems cut some costs such as staff thanks to furloughs and other measures.

“Some hospitals have said that for every lost dollar of revenue, they were able to cut about 50 cents in costs,” the analysis said. “However, we believe that these levels of cost cuts are not sustainable.”

Hospitals can’t cut costs indefinitely, but the costs for handling the pandemic (more money for personal protective equipment and safety measures) are going to continue for some time, Moody’s added.

“As a result, hospitals will operate less efficiently in the wake of the pandemic, although their early experiences in treating COVID-19 patients will enable them to provide care more efficiently than in the early days of the pandemic,” the analysis found. “This will help hospitals free up bed capacity more rapidly and avoid the need for widespread shutdowns of elective surgeries.”

But will that capacity be put to use?

The number of surgical procedures done outside of the hospital is likely to increase and will further weaken earnings, Moody’s said.

“Outpatient procedures typically result in lower costs for both consumers and payers and will likely be preferred by more patients who are reluctant to check-in to a hospital due to COVID-19,” the analysis said.

The payer mix will also shift, and not in hospitals’ favor. Mounting job losses due to the pandemic will force more patients with commercial plans toward programs such as Medicaid.

“This will hinder hospitals’ earnings growth over the next 12-18 months,” Moody’s said. “Employer-provided health insurance pays significantly higher reimbursement rates than government-based programs.”

Bright spots

There are some bright spots for hospitals, including that not all of the $175 billion has been dispersed yet. The CARES Act continues to provide hospitals with a 20% add-on payment for treating Medicare patients that have COVID-19, and it suspends a 2% payment cut for Medicare payments that was installed as part of sequestration.

The Centers for Medicare & Medicaid Services also proposed increasing outpatient payment rates for the 2021 fiscal year by 2.6% and in-patient rates by 2.9%. The fiscal year is set to start next month.

Patient volumes could also return to normal in 2021. Moody’s expects that patient volumes will return to about 90% of pre-pandemic levels on average in the fourth quarter of the year.

“The remaining 10% is likely to come back more slowly in 2021, but faster if a vaccine becomes widely available,” the analysis found.

 

 

 

 

Walmart files plans for standalone clinic in Florida

https://www.beckershospitalreview.com/capital/walmart-files-plans-for-standalone-clinic-in-florida.html?utm_medium=email

Walmart Health: A Deep Dive into the $WMT Corporate Strategy in Health Care  | by Nisarg Patel | Medium

Walmart plans to open a 6,500-square-foot standalone clinic in Middleburg, Fla., according to the Jacksonville Record & Observer, which cited plans filed with the local water management district. 

The new clinic is part of the expansion Walmart Health announced July 22. The new health center will offer primary care, urgent care, labs, imagining, counseling, optical and hearing services, according to the report. A timeline for when the clinic will open has not been released.

In addition to expanding into Florida, Walmart Health is also planning to open a few clinics in the Chicago market. The company already has freestanding health centers in Georgia and Arkansas. 

 

 

 

 

Dental and Doctors’ Offices Still Struggling with COVID Job Loss

Dental and Doctors’ Offices Still Struggling with COVID Job Loss

Dental and Doctors' Offices Still Struggling with COVID Job Loss ...

California’s outpatient health care practices largely shrugged off two recessions, adding more than 400,000 jobs during a two-decade climb from the start of 2000 to early 2020. It was an enviable growth rate of 85% and a trend largely mirrored on the national level.

Then came COVID-19.

Anecdotal stories abound about the crushing impact the pandemic has had on a range of outpatient medical services, from pediatric and family medical practices to dental offices, medical labs and home health care. In California, as in many other states, thousands of doctors, dentists and other health care providers temporarily closed offices this spring as state health officials directed them to suspend non-urgent visits. Many others sat open but largely idle because patients were too scared to visit the doctor given the risk of running into someone with COVID-19 in the waiting room.

As the economy has reopened, so have many medical offices. But the latest state and federal employment data underscores the lingering toll the pandemic has taken on the health care sector.

Doctors’ Offices Shed Jobs Amid COVID

In California, and across the nation, the number of workers in doctors’ offices grew by more than 50% in the past 20 years, before seeing rapid declines amid COVID-19. This chart shows proportional growth in employment over time, with percentages relative to January 2000.

In California, employment in medical offices providing an array of outpatient care fell by 159,300 jobs, or 18%, from February to April, according to California’s Employment Development Department. The sector has recovered some, but job totals in June remained 7% below pre-crisis levels, the latest figures show. Data is not yet available for July, when COVID-19 cases in California again began to rise sharply and communities across much of the state reverted to partial shutdowns.

Nationwide, employment in outpatient care fell by about 1.3 million jobs, or 17%, from February to April, and in June also remained 7% below pre-crisis levels.

Doctors’ offices typically rely on patient volume for revenue. Without it, they can’t make payroll. Many small medical clinics weren’t flush with cash before the crisis, making COVID-19 an existential threat.

“Never in our history have we had more than a month’s cash on hand,” said Dr. Sumana Reddy, owner of the Acacia Family Medical Group in Monterey County. “Think of it that way.”

Reddy operates two clinics, one in Salinas and the other in the town of Prunedale. Many of her clients come from rural areas where poverty is common. When COVID-19 hit and stay-at-home orders took effect, the number of patients coming to the practice fell by about 50%, Reddy said. To keep her patients safe and her business afloat, Reddy largely shifted to telehealth so she could provide care online.

She also turned to federal aid. “I took the stimulus money,” she said. “I asked for advances from anywhere I could get that. So, now I’m tapped out. I’ve done every single thing that I can think of to do. And there’s nothing more to do.”

By late June, patient volume at Reddy’s practice stood at roughly 70% of the level seen before the crisis.

Dental Offices Hit Hard by COVID

The coronavirus pandemic prompted steep declines in dental office employment, undoing 20 years of steady growth. This chart shows proportional growth in dental employment over time, with percentages relative to January 2000.

Many dental offices have been hit even harder. From February to April, the number of dental office employees in California fell by 85,000, or 60%, a rate of decline that outpaced even job losses in the state’s restaurant industry. Nationwide, dental employment fell by about 546,000 from February to April, a 56% decline.

“March, April, mid-May — we were pretty much closed except for emergency care,” said Dr. Natasha Lee, who owns Better Living Through Dentistry, a practice in San Francisco’s Inner Sunset neighborhood. “While dental offices were considered essential, most were closed due to guidance from health departments and the CDC to postpone routine and preventative medical and dental care and just to limit things to emergency.”

Lee has reopened her clinic but is doing less business. She and her staff need extra time to clean tools and change their personal protective equipment.

“With the social distancing, the limiting [of] patients in the office at a time and the slowdown we’ve had, we’re probably seeing about, I’d say, two-thirds of our normal capacity in our practice,” she said in late June.

As for employment, California hospitals have fared better than outpatient medical offices. Hospitals shed about 2% of jobs from February to June.

“They have more capacity in a large organization to withstand the same shock,” said John Romley, a professor and economist at the University of Southern California’s Leonard D. Schaeffer Center for Health Policy and Economics.

Romley said he is optimistic the health care sector overall will recover faster than some other sectors of the economy, since health care remains a necessity.

Still, red flags abound. The recent spike in COVID-19 cases and deaths in many parts of the nation raises the specter of future shutdowns and, with them, additional health care layoffs. In California, Gov. Gavin Newsom recently ordered a second shutdown for dine-in restaurants, movie theaters and bars statewide, as well as churches, gyms and barbershops in much of the state. For now, dental and doctors’ offices can continue operating.

Older Californians Are Postponing Care

A recent census survey found that 42% of California respondents had put off medical care because of the pandemic.

But it’s uncertain when patients will feel comfortable returning to the doctor for routine and preventive care. A series of Census Bureau surveys conducted between June 11 and July 7 found that 42% of Californians who responded had put off medical care in the previous four weeks because of the pandemic. About 33% said they needed medical care for something unrelated to COVID-19 but did not get it.

“I’ve been telling my staff and patients that we should prepare for things to stay not too different for six months to a year,” Reddy said, “which is pretty depressing for most people to think about.”

 

 

 

 

 

 

 

Canceled elective procedures putting pressure on nation’s hospitals

https://www.healthcarefinancenews.com/news/canceled-elective-procedures-putting-pressure-nations-hospitals

U.S. Hospitals Brace for 'Tremendous Strain' from New Virus - JEMS

Even upticks in COVID-19 patients haven’t made up for the revenue losses, since reimbursement for those services is comparatively slim.

Elective procedures are in a strange place at the moment. When the COVID-19 pandemic started to ramp up in the U.S., many of the nation’s hospitals decided to temporarily cancel elective surgeries and procedures, instead dedicating the majority of their resources to treating coronavirus patients. Some hospitals have resumed these surgeries; others resumed them and re-cancelled them; and still others are wondering when they can resume them at all.

In a recent HIMSS20 digital presentation, Reenita Das, a senior vice president and partner at Frost and Sullivan, said that during the pandemic, plastic surgery activity declined by 100%, ENT surgeries declined by 79%, cardiovascular surgeries declined by 53% and neurosurgery surgeries declined by 57%.

It’s hard to overstate the financial impact this is likely to have on hospitals’ bottom lines. Just this week, American Hospital Association President and CEO Rick Pollack, pulling from Kaufman Hall data, said the cancellation of elective surgeries is among the factors contributing to a likely industry-wide loss of $120 billion from July to December alone. When including data from earlier in the pandemic, the losses are expected to be in the vicinity of $323 billion, and half of the nation’s hospitals are expected to be in the red by the end of the year.

Doug Wolfe, cofounder and managing partner of Miami-based law firm Wolfe Pincavage, said this has amounted to a “double-whammy” for hospitals, because on top of elective procedures being cancelled, the money healthcare facilities received from the federal Coronavirus Aid, Relief, and Economic Security Act was an advance on future Medicare payments – which is coming due. While hospitals perform fewer procedures, they will now have to start paying that money back.

All hospitals are hurting, but some are in a more precarious position than others.

“Some hospital systems have had more cash on hand and more liquidity to withstand some of the financial pressure some systems are facing,” said Wolfe. “Traditionally, the smaller hospital systems in the healthcare climate we face today have faced a lot more financial pressure. They’re not able to control costs the same way as a big system. The smaller hospitals and systems were hurting to begin with.”

LOWER REVENUE, HIGHER COSTS

Some hospitals, especially ones in hot spots, are seeing a surge in COVID-19 patients. While this has kept frontline healthcare workers scrambling to care for scores of sick Americans, COVID-19 treatments are not reimbursed at the same level as surgeries. Hospital capacity is being stretched with less lucrative services.

“Some hospitals may be filling up right now, but they’re filling up with lower-reimbursing volume,” said Wolfe. “Inpatient stuff is lower reimbursement. It’s really the perfect storm for hospitals.”

John Haupert, CEO of Grady Health in Atlanta, Georgia, said this week that COVID-19 has had about a $115 million negative impact on Grady’s bottom line. Some $70 million of that is related to the reduction in the number of elective surgeries performed, as well as dips in emergency department and ambulatory visits. 

During one week in March, Grady saw a 50% reduction in surgeries and a 38% reduction in ER visits. The system is almost back to even in terms of elective and essential surgeries, but due to a COVID-19 surge currently taking place in Georgia, it has had to suspend those services once again. ER visits have only come back about halfway from that initial 38% dip, and the system is currently operating at 105% occupancy.

“Part of what we’re seeing there is reluctance from patients to come to hospitals or seek services,” said Haupert. “Many have significantly exacerbated chronic disease conditions.”

Patient hesitation has been an ongoing problem, as has the associated cost of treating coronavirus patients, said Wolfe.

“When they were ramping up to resume the elective stuff, there was a problem getting patients comfortable,” he said. “And the other thing was that the cost of treating patients in this environment has gone up. They’ve put up plexiglass everywhere, they have more wiping-down procedures, and all of these things add cost and time. They need to add more time between procedures so they can clean everything … so they’re able to do less, and it costs more to do less. Even when elective procedures do resume, it’s not going back to the way it was.”

Most hospitals have adjusted their costs to mitigate some of the financial hit. Even some larger systems, such as 92-hospital nonprofit Trinity Health in Michigan, have taken to measures such as laying off and furloughing workers and scaling back working hours for some of its staff. At the top of the month, Trinity announced another round of layoffs and furloughs – in addition to the 2,500 furloughs it announced in April – citing a projected $2 billion in revenue losses in fiscal year 2021, which began on June 1.

Hospitals are at the mercy of the market at the moment, and Wolfe anticipates there could be an uptick in mergers and consolidation as organizations look to partner with less cash-strapped entities. 

“Whether reorganization will work remains to be seen, but there will definitely be a fallout from this,” he said.

 

 

 

 

Even health care jobs aren’t safe

https://www.axios.com/newsletters/axios-vitals-cacbbdf4-4694-4db3-9299-5a7e29ebee7e.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Unemployment rate soars to 14.7% in April - Axios

The coronavirus pandemic is a health care crisis, but health care still isn’t immune from the rampant job losses the pandemic has wrought, Axios’ Bob Herman reports.

By the numbers: The health care industry lost more than 1.4 million jobs in April.

The reason: These jobs have gone away because outpatient care has dried up, as providers postponed elective procedures.

  • More than four out of five of those lost jobs were at dentists, doctors’ offices, chiropractors and other outpatient settings.
  • Technicians, billing clerks and medical assistants who work in outpatient settings — many of whom are not highly paid — have felt the brunt of the job losses.

What’s next: Don’t expect a quick return, even as elective procedures are able to come back online.

  • Patients who have lost their insurance or are worried about catching the coronavirus in a waiting room will likely stay away even from outpatient facilities.
  • “Of all the places people want to come back to quickly, a health care setting is probably not at the top of the list,” said Ani Turner, a health economist at Altarum.

What we’re watching: All of these delays in elective care a boon to insurers, who are saving a lot of money while outpatient procedures are on ice.

  • Some insurers will likely have to pay big rebates to their customers as a result. UnitedHealth Group is getting a jump start on that process, announcing $1.5 billion worth of voluntary premium credits and waived fees.

 

 

 

 

US hospitals losing $1.4B in revenue per day

https://www.beckershospitalreview.com/finance/us-hospitals-losing-1-4b-in-revenue-per-day.html?utm_medium=email

Facing a financial squeeze, hospitals nationwide are cutting jobs

Hospitals across the U.S. are losing more than $1 billion in daily revenue as they experience significant declines in patient volume during the COVID-19 pandemic, according to a report from Crowe, a public accounting, consulting and technology company. 

With the exception of those in San Francisco and New York City, health systems across the country saw patient volume decline an average of 56 percent between March 1 and April 15. As a result, net revenue at hospitals with more than 100 beds dropped roughly $1.44 billion per day, according to the report.

The report, released May 1, said inpatient admissions are down more than 30 percent, emergency room visits dropped 40 percent and outpatient surgery volume plummeted 71 percent, compared to January.

“Hospitals and governments prepared for a surge in patient volume to treat those infected with the novel coronavirus,” Brian Sanderson, managing principal of healthcare services at Crowe, said. “However, any possible surges that might have been expected due to COVID-19 patient volume appear to be dramatically offset by a significant decline in volume in all other areas.”

 

 

“I’ll take my chances with breast cancer”

https://mailchi.mp/0d4b1a52108c/the-weekly-gist-april-24-2020?e=d1e747d2d8

Local Health Officials Prepared for Coronavirus - Social Security ...

It’s entirely understandable that consumers would be reticent to visit in-person care settings right now. Given that doctors’ offices and urgent care facilities are where sick people congregate, a patient might well assume their chances of contracting COVID-19 would be higher there than in almost any other public space. But a story we heard this week from a health system chief strategy officer (CSO) reveals just how frightened patients may be to return.

Last week the system began to reach out to patients who had positive screening mammograms in February, before elective procedures and tests were cancelled, and who now needed to return for more detailed diagnostic images. A full 75 percent of these patients were unwilling to schedule a diagnostic mammogram within the next month, with one patient even saying, “I’ll take my chances with breast cancer over COVID!”.

Women with a concerning mammogram finding are typically among the most motivated patients in seeking follow-up care. If a majority of them are unwilling to pursue in-person follow-up, the same will likely be true of scores of patients with other possible cancers, heart disease, and other serious conditions. As fear delays needed care, patients are likely to end up much sicker, with more advanced disease, when they do return. With rigorous attention to symptom and temperature screening, visiting a doctor’s office should be less risky than going to the grocery store—but providers will have to publicly communicate the steps they are taking to keep patients safe before many will be willing to come in the door.