The annual J.P. Morgan Healthcare Conference is one of the best ways to diagnose the financial condition of the healthcare industry. Every January, every key stakeholder — providers, payers, pharmaceutical companies, tech companies, medical device and supply companies as well as bankers, venture capital and private equity firms — comes together in one exam room, even when it is virtual, for their annual check-up. But as we all know, this January is unlike any other as this past year has been unlike any other year.
You would have to go back to the banking crisis of 2008 to find a similar moment from an economic perspective. At the time, we were asking, “Are banks too big to fail?” The concern behind the question was that if they did fail, the economic chaos that would follow would lead to a collapse with the consumer ultimately picking up the tab. The rest is history.
Healthcare is “Too Vital to Fail”
2020 was historic in too many ways to count. But in a year when healthcare providers faced the worst financial crisis in the history of healthcare, the headline is that they are still standing. And what they proved is that in contrast to banks in 2008 that were seen by many as “too big to fail,” healthcare providers in 2020 proved that they were “too vital to fail.”
One of the many unique things about the COVID-19 pandemic is we are simultaneously experiencing a health crisis, where healthcare providers are the front line in the battle, and an economic crisis, felt in a big way in healthcare given the unique role hospitals play as the largest employer in most communities. Hospitals and health systems have done the vast majority of testing, treating, monitoring, counseling, educating and vaccinating all while searching for PPE and ventilators, and conducting clinical trials. And that’s just the beginning of the list.
Stop and think about that for a minute. What would we have done without them? Thinking through that question will give you some appreciation for the critical, challenging and central role that healthcare providers have had to play over the past year.
Simply stated, healthcare providers are the heart of healthcare, both clinically (essentially 100 percent of the care) and financially (over 50 percent of the $4 trillion annual spend on U.S. healthcare). Over the last year they stepped up and they stepped in at the moment where we needed them the most. This was despite the fact that, like most businesses, they were experiencing calamitous losses with no assurances of any assistance.
Healthcare is “Pandemic-Proof”
This was absolutely the worst-case scenario and the biggest test possible for our nation’s healthcare delivery system. Patient volume and therefore revenue dropped by over 50 percent when the panic of the pandemic was at its peak, driving over $60 billion in losses per month across hospitals and healthcare providers. At the same time, they were dramatically increasing their expenses with PPE, ventilators and additional staff. This was not heading in a good direction. While failure may not have been seen as an option, it was clearly a possibility.
The CARES Act clearly provided a temporary lifeline, providing funding for our nation’s hospitals to weather the storm. While there are more challenging times ahead, it is now clear that most are going to make it to the other side. The system of care in our country is often criticized, but when faced with perhaps the most challenging moment in the history of healthcare, our nation’s hospitals and health systems stepped up heroically and performed miraculously. The work of our healthcare providers on the front line and those who supported them was and is one thing that we all should be exceptionally proud of and thankful for. In 2020, they proved that not only is our nation’s healthcare system too vital to fail, but also that it is “pandemic proof.”
Listening to Front Line at the 2021 J.P. Morgan Healthcare Conference
There has never been a more important year to listen to the lessons from healthcare providers. They are and were the front line of our fight against COVID-19. If there was a class given about how to deal with a pandemic at an institutional level, this conference is where those lessons were being taught.
This year at the J.P. Morgan Healthcare Conference, CEOs, and CFOs from many of the most prestigious and most well-respected health systems in the world presented including AdventHealth, Advocate Aurora Health, Ascension, Baylor Scott & White Health, CommonSpirit Health, Henry Ford Health System, Intermountain Healthcare, Jefferson Health, Mass General Brigham, Northwell Health, OhioHealth, Prisma Health, ProMedica Health System, Providence, Spectrum Health and SSM Health.
I’ve been in healthcare for 30 years and this is my fifth year of writing up the summary of the non-profit provider track of the conference for Becker’s Healthcare to help share the wisdom of the crowd of provider organizations that share their stories. Clearly, this year was different and not because the presentations were virtual, but because they were inspirational.
What did we learn? The good news is that they have made many changes that have the potential to move healthcare in a much better direction and to get to a better place much faster. So, this year instead of providing you a nugget from each presentation, I am going to take a shot at summarizing what they collectively have in motion to stay vital after COVID.
10 Moves Healthcare Providers are Making to Stay Vital After-COVID
As a leader in healthcare, you will never have a bigger opportunity to drive change than right now. Smart leaders are framing this as essentially “before-COVID (BC)” and “after-COVID (AC)” and using this moment as their burning platform to drive change. Credit to the team at Providence for the acronym, but every CEO talked about this concept. As the saying goes, “never let a good crisis go to waste.” Well, we’ve certainly had a crisis, so here is a list of what the top health systems are doing to ensure that they don’t waste it and that they stay vital after-COVID:
1. Take Care of Your Team and They’ll Take Care of You: In a crisis, you can either come together as a team or fall apart. Clearly there has been a significant and stunning amount of pressure on healthcare providers. Many are fearing that mental health might be our nation’s next pandemic in the near future because they are seeing it right now with their own team. Perhaps one of their biggest lessons from this crisis has been the need to address the mental, physical and spiritual health of both team members as well as providers. They have put programs in place to help and have also built a tremendous amount of trust with their team by, in many cases, not laying off and/or furloughing employees. While they have made cuts in other areas such as benefits, this collective approach proved incredibly beneficial. And the last point here that relates to thinking differently about their team is that similar to other businesses, many health systems are making remote arrangements permanent for certain administrative roles and moving to a flexible approach regarding their team and their space in the future.
2. Focus on Health Equity, Not Just Health Care: This was perhaps the most notable and encouraging change from presentations in past years at J.P. Morgan. I have been going to the conference for over a decade, and I’ve never heard someone mention this term or outline their efforts on “health equity” — this year, nearly everyone did. In the past, they have outlined many wonderful programs on “social determinants of health,” but this year they have seen the disproportionate impact of COVID on low-income communities bringing the ongoing issue of racial disparities in access to care and outcomes to light. As the bedrock of employment in their community, this provides an opportunity to not just provide health care, but also health equity, taking an active role to help make progress on issues like hunger, homelessness, and housing. Many are making significant investments in a number of these and other areas.
3. Take the Lead in Public Health — the Message is the Medicine: One of the greatest failings of COVID, perhaps the greatest lesson learned, is the need for clear and consistent messaging from a public health perspective. That is a role that healthcare providers can and should play. In the pandemic, it represented the greatest opportunity to save lives as the essence of public health is communication — the message is the medicine. A number of health systems stepped into this opportunity to build trust and to build their brand, which are essentially one in the same. Some organizations have created a new role — a Chief Community Health Officer — which is a good way to capture the work that is in motion relative to social determinants of health as well as health equity. Many understand the opportunity here and will take the lead relative to vaccine distribution as clear messaging to build confidence is clearly needed.
4. Make the Home and Everywhere a Venue of Care: A number of presenters stated that “COVID didn’t change our strategy, it accelerated it.” For the most part, they were referring to virtual visits, which increased dramatically now representing around 10 percent of their visits vs. 1 percent before-COVID. One presenter said, “Digital has been tested and perfected during COVID,” but that is only considering the role we see digital playing in this moment. It is clear some organizations have a very narrow tactical lens while others are looking at the opportunity much more strategically. For many, they are looking at a “care anywhere and everywhere” strategy. From a full “hospital in the home” approach to remote monitoring devices, it is clear that your home will be seen as a venue of care and an access point moving forward. The pandemic of 2020 may have sparked a new era of “post-hospital healthcare” — stay tuned.
5. Bury Your Budget and Pivot to Planning: The budget process has been a source of incredible distrust, dissatisfaction and distraction for every health system for decades. The chaos and uncertainty of the pandemic forced every organization to bury their budget last year. With that said, many of the organizations that presented are now making a permanent shift away from a “budget-based culture” where the focus is on hitting a now irrelevant target set that was set six to nine months ago to a “performance-based culture” where the focus is on making progress every day, week, month and quarter. Given that the traditional annual operating budget process has been the core of how health systems have operated, this shift to a rolling forecast and a more dynamic planning process is likely the single most substantial and permanent change in how hospitals and health systems operate due to COVID. In other words, it is arguably a much bigger headline than what’s happened with virtual visits.
6. Get Your M&A Machine in Motion: It was clear from the presentations that activity around acquisitions is going to return, perhaps significantly. These organizations have strong balance sheets and while the strong have gotten stronger during COVID, the weak have in many cases gotten weaker. Many are going to be opportunistic to acquire hospitals, but at the same time they have concluded that they can’t just be a system of care delivery. They are also focused on acquiring and investing in other types of entities as well as forming more robust partnerships to create new revenue streams. Organizations that already had diversified revenue streams in place came through this pandemic the best. Most hospitals are overly reliant on the ED and surgical volume. Trying to drive that volume in a value-based world, with the end of site of service differentials and the inpatient only list, will be an even bigger challenge in the future as new niche players enter the market. As I wrote in the headline of my summary two years ago, “It’s the platform, stupid.” There are better ways to create a financial path forward that involve leveraging their assets — their platform — in new and creative ways.
7. Hey, You, Get into the Cloud: With apologies for wrapping a Rolling Stones song into a conference summary, one of the main things touted during presentations was “the cloud” and their ability to pull clinical, operational and financial dashboards together to monitor the impact of COVID on their organization and organize their actions. Focus over the last decade has been on the clinical (implementing EHRs), but it is now shifting to “digitizing operations” with a focus on finance and operations (planning, cost accounting, ERPs, etc.) as well as advanced analytics and data science capabilities to automate, gather insight, manage and predict. It is clear that the cloud has moved from a curiosity to a necessity for health systems, making this one of the biggest areas of investment for every health system over the next decade.
8. Make Price Transparency a Key Differentiator: One of the great lessons from Amazon (and others) is that you can make a lot of money when you make something easy to buy. While many health systems are skeptical of the value of the price transparency requirements, those that have a deep understanding of both their true cost of care and margins are using this as an opportunity to prove their value and accelerate their strategy to become consumer-centric. While there is certainly a level of risk, no business has ever been unsuccessful because they made their product easier to understand and access. Because healthcare is so opaque, there is an opening for healthcare providers to build trust, which is their main asset, and volume, which is their main source of revenue, by becoming stunningly easy to do business with. This may be tough sledding for some as this isn’t something healthcare providers are known for. To understand this, spend a few minutes on Tesla’s website vs. Ford’s. The concept of making something easy, or hard, to buy will become crystal clear as fast as a battery-driven car can go from zero to 60.
9. Make Care More Affordable: This represents the biggest challenge for hospitals and health systems as they ultimately need to be on the right side of this issue or the trust that they have will disappear and they will remain very vulnerable to outside players. All are investing in advanced cost accounting systems (time-driven costing, physician costing, supply, and drug costing) to truly understand their cost and use that as a basis to price more strategically in the market. Some are dropping prices for shoppable services and using loss leader strategies to build their brand. The incoming Secretary of Health and Human Services has a strong belief regarding the accountability of health systems to be consumer centric. The health systems that understand this are working to get ahead of this issue as it is likely one of their most significant threats (or opportunities) over the next decade. This means getting all care to the right site of care, evaluating every opportunity to improve, and getting serious about eliminating the need for expensive care through building healthy communities. If you’re worried about Wal-Mart or Amazon, this is your secret weapon to keep them on the sideline.
10. Scale = Survival: One of the big lessons here is that the strong got stronger, the weak got weaker. For the strong, many have been able to “snapback” in financial performance because they were resilient. They were able to designate COVID-only facilities, while keeping others running at a higher capacity. To be clear, while most health systems are going to get to the other side and are positioned better than ever, there are many others that will continue to struggle for years to come. According to our data at Strata, we see 25 percent operating at negative margins right now and another 50 percent just above breakeven. They key to survival moving forward, for those that don’t have a captive market, will be scale. If this pandemic proved one thing relative to the future of health systems it is this — scale equals survival.
When Will We Return to Normal?
Based on what the projections that these health systems shared, the “new normal” for health systems for the first half of 2021 will be roughly 95 percent of prior year inpatient volume with a 20 percent year-over-year drop in ED volume and a drop of 10-15 percent in observation visits. So, the pain will continue, but given the adjustments that were already made in 2020, it looks like they will be able to manage through COVID effectively. While there will be a pickup in the second half of 2021, the safe bet is that a “return to normal” pre-COVID volumes likely won’t occur until 2022. And there are some who believe that some of the volume should have never been there to begin with and we might see a permanent shift downward in ED volume as well as in some other areas.
With that said, I’ll steal a quote from Bert Zimmerli, the CFO of Intermountain Healthcare, who said, “Normal wasn’t ever nearly good enough in healthcare.” In that spirit, the goal should be to not return to normal, but rather to use this moment as an opportunity to take the positive changes driven by COVID — from technology to processes to areas of focus to a sense of responsibility — and make them permanent.
Thanking Our “Healthcare Heroes”
We’ll never see another 2020 again, hopefully. With that said, one of the silver linings of the year is everything we learned in healthcare. The most important lesson was this — in healthcare there are literally heroes everywhere. To each of them, I just want to say “thank you” for being there for us when we needed you the most. We should all be writing love letters to those on the front line who risked their lives to save others. Our nation’s healthcare system has taken a lot of criticism through the years from those on the outside, often with a blind eye to how things work in practice vs. in concept. But this year we all got to see first-hand what’s happening inside of healthcare — the heroic work of our healthcare providers and those who support them.
They faced the worst crisis in the history of healthcare. They responded heroically and were there for our families and friends.
They proved that healthcare is too vital to fail. They proved that healthcare is pandemic-proof.
Thank you to our healthcare heroes.
Nashville police are criminally charging three women including a registered nurse for violating Metro Health orders after hosting a large house party on Halloween.
Roommates Madilyn Dennington, Bailey Mills and Olivia Noe, all 23, were issued misdemeanor citations in connection with an Oct. 31 football watch party at their East Nashville home on the 1200 block of Boscobel Street south of Fatherland Street.
Police spokesman Don Aaron said the women were served with court summonses on Monday and are slated to appear on the charges Dec. 16.
According to an arrest affidavit, officers responded about 6:30 p.m. to a complaint about a loud party at the home, heard music blaring and saw several people in the yard. In all, police said they found more than 100 people inside and outside the home.
When officers spoke to Dennington, Mills and Noe outside, they told police they had organized a watch party at their home for a football game, the affidavit states. The officers told the women that at that time, no more than 25 people were permitted to gather in Davidson County unless the gathering was approved by the city.
The women then went inside and told everyone to leave, police reported.
Police then alerted Metro Health officials about the party. Hugh Atkins, Metro Health’s environmental health services director, confirmed the Health Department did not receive an event application for the gathering.
Early last week, Nashville instituted a “rule of eight,” limiting both public and private events to eight people as the holidays approached — down from the previous 25-person cap. Tighter capacity restrictions on restaurants and bars went into effect in the city on Monday.
On Tuesday, Davidson County reportedan increase of 851 cases in 24 hours — the second-highest ever daily increase. So far 369 people in Nashville have died from the virus.
Meanwhile, Monday’s statewide numbers marked a record high increase in cases. The Tennessee Department of Health announced an increase of 7,975 cases and 48 deaths over the previous 24 hours. So far the virus had caused 4,602 deaths statewide.
A nurse and her roommates
Dennington is a registered nurse at TriStar Skyline Medical Center, authorities said.
It was not immediately known whether the hospital had taken any disciplinary action against Dennington. She did not return an immediate request for comment and blocked her Facebook page from a Tennessean reporter shortly after being contacted.
“Properly following pandemic regulations is extremely important to help reduce the spread of COVID-19,” Anna-Lee Cockrill, a spokeswoman for TriStar, said regarding the party. “We are looking into this further.”
According to their social media pages, all three roommates formerly attended the University of Mississippi before moving to Nashville, and Dennington and Noe both graduated from the University of Mississippi Medical Center.
Noe and Mills also could not immediately be reached for comment.
More than 50 arrests, 315 citations
Police data shows at least 50 people have been arrested and more than 315 have been cited under local emergency health orders that went into effect earlier this year.
Just this weekend, Nashville police issued nine citations and made one arrest after people refused to wear face masks in public, a mandated action in Davidson County.
As of late November at least dozen people had been arrested on Class A misdemeanor charges after police said they held large house parties and events. Some of them entertained as many as 600 people at a time, police reported. If convicted, they face up to a year in jail and a $2,500 fine.
As of Tuesday, only one of the arrested defendants had pleaded guilty: Jeffrey Mathews, a 36-year-old Goodlettsville dentist arrested for throwing an Aug. 1 house party on Fern Avenue in East Nashville. He was one of two men criminally charged for the party that drew hundreds.
Mathews, who apologized for his actions, was sentenced to three months of probation and eight hours of community service. His co-defendant, Christopher “Shi” Eubank, 40, remained at large Tuesday after failing to appear in court in October for a hearing on three counts of violating emergency health orders.
This is a developing story.
Dressed in blue scrubs and carrying a stethoscope around her neck, an oncology nurse in Salem, Ore., looked to the Grinch as inspiration while suggesting that she ignored coronavirus guidelines outside of work.
In a TikTok video posted Friday, she lip-dubbed a scene from “How the Grinch Stole Christmas” to get her point across to her unaware colleagues: She does not wear a mask in public when she’s not working at Salem Hospital.
“When my co-workers find out I still travel, don’t wear a mask when I’m out and let my kids have play dates,” the nurse wrote in a caption accompanying the video, which has since been deleted.
Following swift online backlash from critics, her employer, Salem Health, announced Saturday that the nurse had been placed on administrative leave. In a statement, the hospital said the nurse, who has not been publicly identified by her employer, “displayed cavalier disregard for the seriousness of this pandemic and her indifference towards physical distancing and masking out of work.”
“We also want to assure you that this one careless statement does not reflect the position of Salem Health or the hardworking and dedicated caregivers who work here,” said the hospital, adding that an investigation is underway.
Salem Health did not respond to The Washington Post’s request for comment as of early Monday.
The nurse’s video offers a startling and rare glimpse of a front-line health-care worker blatantly playing down a virus that has killed at least 266,000 Americans. It also has been seen in some coronavirus patients, some on their deathbeds, who still refuse to believe the pandemic is real.
The incident comes at a time when Oregon has continued to see a spike in new coronavirus cases and virus-related hospitalizations. Just last week, the state’s daily reported deaths and hospitalizations rose by 33.3 and 24.2 percent respectively, according to The Post’s coronavirus tracker. At least 74,120 Oregonians have been infected with the virus since late February; 905 of them have died.
The clip posted to TikTok on Friday shows the nurse mocking the health guidelines while using audio from a scene in which the Grinch reveals his true identity to Cindy Lou Who.
Although the original video was removed, TikTok users have shared a “duet” video posted by another user critical of the nurse, which had more than 274,000 reactions as of early Monday.
Soon after she posted the clip, hundreds took to social media and the hospital’s Facebook page to report the nurse’s video and demand an official response from her employer. Some requested that the nurse be removed from her position and that her license be revoked.
Hospital officials told the Salem Statesman Journal that the investigation is aiming to figure out which other staff members and patients have come in contact with the nurse, who works in the oncology department.
But for some, the hospital’s apologies and actions were not enough.
“The video supplied should be evidence enough,” one Facebook user commented. “She needs to be FIRED. Not on PAID leave. As someone fighting cancer, I can only imagine how her patients feel after seeing this news.”
The hospital thanked those who alerted them of the incident, emphasizing that its staff, patients and visitors must adhere to the Centers for Disease Control and Prevention guidelines.
“These policies are strictly enforced among staff from the moment they leave their cars at work to the moment they start driving home,” hospital officials told the Statesman Journal.
Like a lot of people, I have really gotten into listening to podcasts over the last year. They’re such an immersive way to learn about the world, and I like how the format lets you dive as deep on a topic as you want. So, I was inspired to start one of my own—but I knew I couldn’t do it on my own.
I couldn’t ask for a better partner on this project than Rashida Jones. A mutual friend suggested that the two of us might have a lot to talk about, and it turned out he was right. I already knew she was a talented actor, but I was impressed by her thoughtful perspective on the world. So, we decided to start a podcast that lets us think through some of today’s most pressing problems together. In our first episode, Rashida and I explore a big question that is top of mind for many people: what will the world look like after COVID-19?
I know it’s hard to imagine right now while new cases are surging around the world, but there will come a time when the COVID-19 pandemic is behind us. I think it’s safe to assume that society will be changed forever, given how disruptive the virus has been to virtually every part of our lives.
Unfortunately, we still have a long way to go before life truly gets back to “normal.” Rashida and I were joined by Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, to discuss what to expect in the months to come. I’ve had the opportunity to work with Dr. Fauci on a number of global health issues over the years, including the quest for an HIV vaccine and cure. He’s such a quiet and unassuming guy normally, so it’s been wild to watch him become a huge celebrity.
Dr. Fauci and I are both optimistic that a vaccine will bring an end to the pandemic at some point in the near future. But what the world looks like after that is a lot less clear. I suspect that some of the digitization trends we’ve seen—especially in the areas of online learning, telemedicine, and remote work—will become a regular part of our lives. I hope this episode leaves you hopeful about the future and curious about what comes next.
Over the past week, as coronavirus cases have spiked and COVID hospitalizations have grown to alarming levels, we’ve been keeping a close pulse on the situation at our member health systems in markets across the country.
Here’s what we can report: admissions are rising on a curve that looks increasingly vertical.
The ICU is less of a problem than inpatient beds, and while no one wants to cancel non-emergent procedures again, having just worked through the backlog of cases that were postponed in late spring and early summer, discussions about reallocating capacity are starting again. Some are considering shifting more surgeries to ambulatory centers, others are planning to dedicate more space to COVID-positive cases in an attempt to segregate the “hot zone”, and still others are exploring home-based care for certain medical admissions. Fortunately, the supply of PPE feels sufficient for the time being, as does testing capacity.
The number one concern among everyone we’ve talked to: staffing. Because of the high level of community spread, many are now losing nurses and other key staff to COVID isolation, with one system reporting that 35 percent of its critical care nurses at a key hospital had tested positive or were in quarantine after exposure. Staff are burned out, exhausted from the past eight months, and turnover rates are spiking. Because the third wave is so widespread, it’s become harder to find nurses from other markets who can temporarily relocate to help with a surge of cases. And the rates being charged for “agency” nurses—stopgap staff hired on a temporary basis—are going through the roof.
The staffing issue may prove to be the biggest crisis of the third wave of COVID, given how difficult it is to solve; there’s no Defense Production Act or National Guard supply chain for nurses. At best, hospitals will find themselves cobbling together a solution by cross-training staff, paying extra for temporary workers, and asking their already-overtaxed workforce to weather yet another storm. We’re eager to hear any creative approaches to solving the staffing challenge as winter approaches, and we’ve dedicated a senior member of our team to tracking the workforce crisis. Let us know what you’re seeing.
Over the past few weeks we’ve fielded a spate of questions from health system executives wondering about their peers’ plans for employees to return to the office. Some who have set a January 1st target for employees to return to their physical workspaces are now reconsidering.
“The first of the year sounded good back in the summer, but now it seems kind of arbitrary,” one system COO told us. “And if we really are entering a winter ‘third wave’ of COVID, it may not be a sound decision for health reasons, either.” Many have been positively surprised by the levels of communication and productivity since many employees began telecommuting full-time back in the spring. “It would be one thing to tell people they had to come back if the work wasn’t getting done. But for many, productivity has actually been better,” one executive shared.
Eight months into the work-from-home experiment (and with a handful of high-profile companies like Twitter saying employees can work from home forever), some leaders are now wondering whether they too should allow some staff to work from home permanently. The opportunities are obvious: real estate and overhead cost savings, and a potential boost to employee engagement and retention. But contemplating a long-term shift raises big questions.
As remote workers in expensive markets look to move to lower-cost cities, or even to states with lower tax rates, does a geographic connection to the area matter? As new staff who have never met in person are added, can culture and teambuilding be sustained? And how to blend operations and communication across remote staff and those who work in the office, by choice or necessity? (“In-person meetings are great, Zoom meetings have gotten better, but the ones where half of us are in a conference room and the other half are dialing in feel like a death knell,” one physician leader told us.)
The pandemic has likely launched a lasting shift toward “work anywhere”. But in order to capture the benefits of remote or flexible work, leaders must invest time and resources to rethink and transform the way they onboard, manage, operate, and communicate with the hybrid teams of the future.