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.

 

 

 

Graph of the Day: Daily Confirmed Covid-19 Cases (Rolling 3-day average)

Daily confirmed COVID-19 cases, rolling 3-day average - Our World ...

Envisioning the future of health system strategy

https://mailchi.mp/0fa09872586c/the-weekly-gist-july-31-2020?e=d1e747d2d8

We’ve spent the past five months working with our health system members to develop a perspective on the impact of the coronavirus pandemic on strategy, discussing what’s changed and what hasn’t, and where leaders should focus moving forward. The above graphic provides an overview of that perspective.

We think about the future across three time periods:

The “near future”, which will largely be dominated by concerns about reopening and recovering clinical operations and financial stability;

The “next future”, which we view as a period of strategic realignment during which we’ll see a “land grab” for advantage among payers, providers, and disruptors;

And the “far future”, in which the fundamental structure of the industry—how healthcare is organized, delivered, and paid for—will see more dramatic changes based on the evolution of economic and policy drivers.

Over time, “market uncertainty” caused by the uncertain course of the disease itself, along with societal and political shifts, will give way to “industry uncertainty”, under which a new competitive landscape will begin to develop.

Across those time horizons, health system strategy should focus on agile and decisive actions to respond to the environment—ensuring a safe and reliable return to normal clinical operations, taking best advantage of the opportunity to play new roles in the delivery of care (e.g., virtual and home-based services), and over time, building a full-scale, consumer-centric care ecosystem.

That’s a lot of rhetoric, but the hard work lies beneath—requiring systems to execute on several key fronts, from ensuring efficient, “systematized” operations, to building sustainable payment and pricing approaches, to adopting a relentless focus on services that earn and maintain consumer loyalty over time. We’ll have more to share on all of these ideas across the coming months, as our work with members continues. What’s clear now is that we’re not going back to the old way of doing things—we’re heading toward a “brave new world” of healthcare delivery.

 

 

 

 

Coronavirus threat rises across U.S.: ‘We just have to assume the monster is everywhere’

https://www.washingtonpost.com/health/coronavirus-threat-rises-across-us-we-just-have-to-assume-the-monster-is-everywhere/2020/08/01/cdb505e0-d1d8-11ea-8c55-61e7fa5e82ab_story.html?utm_campaign=wp_post_most&utm_medium=email&utm_source=newsletter&wpisrc=nl_most

The coronavirus is spreading at dangerous levels across much of the United States, and public health experts are demanding a dramatic reset in the national response, one that recognizes that the crisis is intensifying and that current piecemeal strategies aren’t working.

This is a new phase of the pandemic, one no longer built around local or regional clusters and hot spots. It comes at an unnerving moment in which the economy suffered its worst collapse since the Great Depression, schools are rapidly canceling plans for in-person instruction and Congress has failed to pass a new emergency relief package. President Trump continues to promote fringe science, the daily death toll keeps climbing and the human cost of the virus in America has just passed 150,000 lives.

“Unlike many countries in the world, the United States is not currently on course to get control of this epidemic. It’s time to reset,” declared a report released this week by Johns Hopkins University.

Another report from the Association of American Medical Colleges offered a similarly blunt message: “If the nation does not change its course — and soon — deaths in the United States could be well into the multiple hundreds of thousands.”

The country is exhausted, but the virus is not. It has shown a consistent pattern: It spreads opportunistically wherever people let down their guard and return to more familiar patterns of mobility and socializing. When communities tighten up, by closing bars or requiring masks in public, transmission drops.

That has happened in some Sun Belt states, including Arizona, Florida and Texas, which are still dealing with a surge of hospitalizations and deaths but are finally turning around the rate of new infections.

There are signs, however, that the virus is spreading freely in much of the country. Experts are focused on upticks in the percentage of positive coronavirus tests in the upper South and Midwest. It is a sign that the virus could soon surge anew in the heartland. Infectious-disease experts also see warning signs in East Coast cities hammered in the spring.

“There are fewer and fewer places where anybody can assume the virus is not there,” Gov. Mike DeWine (R) of Ohio said Wednesday. “It’s in our most rural counties. It’s in our smallest communities. And we just have to assume the monster is everywhere. It’s everywhere.”

Dire data

An internal Trump administration briefing document prepared by the Federal Emergency Management Agency and obtained Friday by The Washington Post counted 453,659 new infections in the past week.

Alaska is in trouble. And Hawaii, Missouri, Montana and Oklahoma. Those are the five states, as of Friday, with the highest percentage increase in the seven-day average of new cases, according to a Post analysis of nationwide health data.

“The dominoes are falling now,” said David Rubin, director of the PolicyLab at Children’s Hospital of Philadelphia, which has produced a model showing where the virus is likely to spread over the next four weeks.

His team sees ominous trends in big cities, including Baltimore, Chicago, Detroit, Indianapolis, Kansas City, Louisville, Philadelphia, St. Louis and Washington, with Boston and New York not far behind. And Rubin warns that the expected influx of students into college towns at the end of this month will be another epidemiological shock.

“I suspect we’re going to see big outbreaks in college towns,” he said.

Young people are less likely to have a severe outcome from the coronavirus, but they are adept at propelling the virus through the broader population, including among people at elevated risk. Numbers of coronavirus-related hospitalizations in the United States went from 36,158 on July 1 to 52,767 on July 31, according to The Post’s data. FEMA reports a sharp increase in the number of patients on ventilators.

The crisis has highlighted the deep disparities in health outcomes among racial and ethnic groups, and data from the Centers for Disease Control and Prevention this week showed that hospitalization rates due to the coronavirus are roughly five times higher among Black, Hispanic and Native Americans than Whites.

Thirty-seven states and Puerto Rico will probably see rising daily death tolls during the next two weeks compared with the previous two weeks, according to the latest ensemble forecast from the University of Massachusetts at Amherst that combines more than 30 coronavirus models.

There are glimmers of progress. The FEMA report showed 237 U.S. counties with at least two weeks of steady declines in numbers of new coronavirus cases.

But there are more than 3,100 counties in America.

“This is not a natural disaster that happens to one or two or three communities and then you rebuild,” said Beth Cameron, vice president for global biological policy and programs at the Nuclear Threat Initiative and a former White House National Security Council staffer focused on pandemics. “This is a spreading disaster that moves from one place to another, and until it’s suppressed and until we ultimately have a safe and effective and distributed vaccine, every community is at risk.”

A national strategy, whether advanced by the federal government or by the states working in tandem, will more effectively control viral spread than the current patchwork of state and local policies, according to a study from researchers at the Massachusetts Institute of Technology published Thursday in the Proceedings of the National Academy of Sciences.

The coordination is necessary because one state’s policies affect other states. Sometimes, that influence is at a distance, because states that are geographically far apart can have cultural and social ties, as is the case with the “peer states” of New York and Florida, the report found.

“The cost of our uncoordinated national response to covid-19, it’s dramatic,” said MIT economist Sinan Aral, senior author of the paper.

Some experts argue for a full six-to-eight-week national shutdown, something even more sweeping than what was instituted in the spring. There appears to be no political support for such a move.

Neil Bradley, executive vice president of the U.S. Chamber of Commerce, said fresh federal intervention is necessary in this second wave of closures. Enhanced federal unemployment benefits expired at the end of July, with no agreement on a new stimulus package in sight.

“Congress, on a bipartisan basis, was trying to create a bridge to help individuals and businesses navigate the period of a shutdown,” Bradley said. “Absent an extension of that bridge, in light of a second shutdown, that bridge becomes a pier. And then that’s a real problem.”

With the economy in shambles, hospitals filling up and the public frustrated, anxious and angry, the challenge for national leadership is finding a plausible sea-to-sea strategy that can win widespread support and simultaneously limit sickness and death from the virus.

Many Americans may simply feel discouraged and overtaxed, unable to maintain precautions such as social distancing and mask-wearing. Others remain resistant, for cultural or ideological reasons, to public health guidance and buy into conspiracy theories and pseudoscience.

DeWine is struggling to get Ohio citizens to take seriously the need to wear masks. A sheriff in rural western Ohio told the governor Wednesday that people didn’t think the virus was a big problem. DeWine informed the sheriff that the numbers in his county were higher per capita than in Toledo.

“The way I’ve explained to people, if we want to have Friday night football in the fall, if we want our kids back in school, what we do in the next two weeks will determine if that happens,” DeWine said.

The crucial metric

The coronavirus has always been several steps ahead of the U.S. government, the scientific community, the news media and the general public. By the time a community notices a surge in patients to hospital emergency rooms, the virus has seeded itself widely.

The virus officially known as SARS-CoV-2 can be transmitted by people who are infectious but not symptomatic. The incubation period is typically about six days, according to the CDC. When symptoms flare, they can be ambiguous. A person may not seek a test right away. Then, the test results may not come back for days, a week, even longer.

That delay makes contact tracing nearly futile. It also means government data on virus transmission is invariably out of date to some degree — it’s a snapshot of what was happening a week or two weeks before. And different jurisdictions use different metrics to track the virus, further fogging the picture.

The top doctors on the White House coronavirus task force, Deborah Birx and Anthony S. Fauci, are newly focused on the early warning signs of a virus outbreak. This week, they warned that the kind of runaway outbreaks seen in the Sun Belt could potentially happen elsewhere. Among the states of greatest concern: Indiana, Kentucky, Ohio and Tennessee.

Fauci and Birx have pointed to a critical metric: the percentage of positive test results. When that figure starts to tick upward, it is a sign of increasing community spread of the virus.

“That is kind of the predictor that if you don’t do something — namely, do something different — if you’re opening up at a certain pace, slow down, maybe even backtrack a little,” Fauci said in an interview Wednesday.

Without a vaccine, the primary tools for combating the spread of the virus remain the common-sense “non-pharmaceutical interventions,” including mask-wearing, hand-washing, staying out of bars and other confined spaces, maintaining social distancing of at least six feet and avoiding crowds, Fauci said.

“Seemingly simple maneuvers have been very effective in preventing or even turning around the kind of surges we’ve seen,” he said.

Thirty-three U.S. states have positivity rates above 5 percent. The World Health Organization has cited that percentage as a crucial benchmark for governments deciding whether to reopen their economy. Above 5 percent, stay closed. Below, open with caution.

Of states with positivity rates below 5 percent, nine have seen those rates rise during the last two weeks.

“You may not fully realize that when you think things are okay, you actually are seeing a subtle, insidious increase that is usually reflected in the percent of your tests that are positive,” Fauci said.

The shutdown blues

Some governors immediately took the White House warnings to heart. On Monday, Kentucky Gov. Andy Beshear (D) said at a news conference that he had met with Birx the previous day and was told he was getting the same warning Texas and Florida received “weeks before the worst of the worst happened.”

To prevent that outcome in his state, Beshear said, he was closing bars for two weeks and cutting seating in restaurants.

But as Beshear pleaded that “we all need to be singing from the same sheet of music,” discord and confusion prevailed.

Iowa Gov. Kim Reynolds (R) said Thursday she wasn’t convinced a mask mandate is effective: “No one knows particularly the best strategy.”

Earlier in the week, Tennessee Gov. Bill Lee (R) demurred on masks and bar closures even as he stood next to Birx and spoke to reporters.

“That’s not a plan for us now,” he said. He added emphatically, “We are not going to close the economy back down.”

The virus is spreading throughout his state, and not just in the big cities. Vacationers took the virus home from the honky-tonks of Nashville and blues clubs of Memphis to where they live in more rural areas, said John Graves, a professor at Vanderbilt University studying the pandemic.

“The geographical footprint of the virus has reached all corners of the state at this point,” Graves said.

In Missouri, Gov. Michael L. Parson (R) was dismissive of New York’s imposition of a quarantine on residents from his state as a sign of a worsening pandemic. “I’m not going to put much stock in what New York says — they’re a disaster,” he said at a news conference Monday.

Missouri has no mask mandate, leaving it to local officials to act — often in the face of hostility and threats. In the town of Branson, angry opponents testified Tuesday that there was no reason for a mask order when deaths in the county have been few and far between.

“It hasn’t hit us here yet, that’s what I’m scared of,” Branson Alderman Bill Skains said before voting with a majority in favor of the mandate. “It is coming, and it’s coming like a freight train.”

Democratic mayors in Missouri’s two biggest cities, Kansas City and St. Louis, said that with so many people needing jobs, they are reluctant to follow Birx’s recommendation to close bars.

“The whole-blanket approach to shut everybody down feels a little harsh for the people who are doing it right,” said Jacob Long, spokesman for St. Louis Mayor Lyda Krewson. “We’re trying to take care of some bad actors first.”

Minneapolis Mayor Jacob Frey also got a warning from Birx. On Wednesday, he said all bar drinking must move outside.

“We don’t want to be heading in the direction of everybody else,” said Kristen Ehresmann, director of the infectious-disease epidemiology division at the Minnesota Department of Health. She acknowledged that some options “are really pretty draconian.”

The problem is that less-painful measures have proven insufficient.

“The disease transmission we’re seeing is more than what would have been expected if people were following the guidance as it is laid out. It’s a reflection of the fact that they’re not,” she said.

‘A tremendous disappointment’

Wisconsin Gov. Tony Evers (D) tried to implement broad statewide measures early in the pandemic, only to have his “Safer at Home” order struck down by the state’s Supreme Court.

With cases in his state rising anew, he tried again Thursday, declaring a public health emergency and issuing a statewide mask mandate.

“While our local health departments have been doing a heck of a job responding to this pandemic in our communities, the fact of the matter is, this virus doesn’t care about any town, city or county boundary, and we need a statewide approach to get Wisconsin back on track,” Evers said.

Ryan Westergaard, Wisconsin’s chief medical officer, said he is dismayed by the failures of the national pandemic response.

“I really thought we had a chance to keep this suppressed,” Westergaard said. “The model is a good one: testing, tracing, isolation, supportive quarantine. Those things work. We saw this coming. We knew we had to build robust, flexible systems to do this in all of our communities. It feels like a tremendous disappointment that we weren’t able to build a system in time that could handle this.”

There is one benefit to the way the virus has spread so broadly, he noted: “We no longer have to keep track of people traveling to a hot spot if hot spots are everywhere.”

 

 

 

 

Cartoon – Our Coronavirus Strategic Imperative

Strategy Meetings Cartoons and Comics - funny pictures from ...

Navigating a Post-Covid Path to the New Normal with Gist Healthcare CEO, Chas Roades

https://www.lrvhealth.com/podcast/?single_podcast=2203

Covid-19, Regulatory Changes and Election Implications: An Inside ...Chas Roades (@ChasRoades) | Twitter

Healthcare is Hard: A Podcast for Insiders; June 11, 2020

Over the course of nearly 20 years as Chief Research Officer at The Advisory Board Company, Chas Roades became a trusted advisor for CEOs, leadership teams and boards of directors at health systems across the country. When The Advisory Board was acquired by Optum in 2017, Chas left the company with Chief Medical Officer, Lisa Bielamowicz. Together they founded Gist Healthcare, where they play a similar role, but take an even deeper and more focused look at the issues health systems are facing.

As Chas explains, Gist Healthcare has members from Allentown, Pennsylvania to Beverly Hills, California and everywhere in between. Most of the organizations Gist works with are regional health systems in the $2 to $5 billion range, where Chas and his colleagues become adjunct members of the executive team and board. In this role, Chas is typically hopscotching the country for in-person meetings and strategy sessions, but Covid-19 has brought many changes.

“Almost overnight, Chas went from in-depth sessions about long-term five-year strategy, to discussions about how health systems will make it through the next six weeks and after that, adapt to the new normal. He spoke to Keith Figlioli about many of the issues impacting these discussions including:

  • Corporate Governance. The decisions health systems will be forced to make over the next two to five years are staggeringly big, according to Chas. As a result, Gist is spending a lot of time thinking about governance right now and how to help health systems supercharge governance processes to lay a foundation for the making these difficult choices.
  • Health Systems Acting Like Systems. As health systems struggle to maintain revenue and margins, they’ll be forced to streamline operations in a way that finally takes advantage of system value. As providers consolidated in recent years, they successfully met the goal of gaining size and negotiating leverage, but paid much less attention to the harder part – controlling cost and creating value. That’s about to change. It will be a lasting impact of Covid-19, and an opportunity for innovators.
  • The Telehealth Land Grab. Providers have quickly ramped-up telehealth services as a necessity to survive during lockdowns. But as telehealth plays a larger role in the new standard of care, payers will not sit idly by and are preparing to double-down on their own virtual care capabilities. They’re looking to take over the virtual space and own the digital front door in an effort to gain coveted customer loyalty. Chas talks about how it would be foolish for providers to expect that payers will continue reimburse at high rates or at parity for physical visits.
  • The Battleground Over Physicians. This is the other area to watch as payers and providers clash over the hearts and minds of consumers. The years-long trend of physician practices being acquired and rolled-up into larger organizations will significantly accelerate due to Covid-19. The financial pain the pandemic has caused will force some practices out of business and many others looking for an exit. And as health systems deal with their own financial hardships, payers with deep pockets are the more likely suitor.”