Sam’s Club launches $1 telehealth visits for members: 7 details

https://www.beckershospitalreview.com/telehealth/sam-s-club-launches-1-telehealth-visits-for-members-7-details.html?utm_medium=email

On-Demand Text-Based Primary Care App | 98point6

Sam’s Club partnered with primary care telehealth provider 98point6 to offer members virtual visits.

Seven details:

1. Sam’s Club now offers members access to telehealth visits through a text-based app run by 98point6.

2. Members can purchase a $20 quarterly subscription for the first three months; the regular sign-up fee is $30 per person. After the first three months, members pay $33.50 every three months.

3. The subscription gives members unlimited telehealth visits for $1 per visit. The service has board-certified physicians available 24 hours per day, seven days a week.

4. Members can also subscribe for pediatric care.

5. Physicians can diagnose and treat 400 conditions including cold and flu-like symptoms as well as allergies. They can also monitor chronic conditions including diabetes, depression and anxiety.

6. Members can use the app to obtain prescriptions and lab orders as well.

7. Sam’s Club has around 600 stores in the U.S. and Puerto Rico and millions of members.

Offering access to telemedicine was on our roadmap in the pre-COVID world, but the current environment expedited the need for this service to be easily accessible, readily available and most of all, affordable,” said John McDowell, vice president of pharmacy operations and divisional merchandise at Sam’s Club. “Through providing access to the 98point6 app in a pilot, we quickly realized that our members were eager to have mobile telehealth options and we wanted to provide this healthcare solution to all of our members as a standalone option.”

 

 

 

Will ED volumes ever bounce back?

https://mailchi.mp/f5713fcae702/the-weekly-gist-september-18-2020?e=d1e747d2d8

Hospitals' ED volumes rebounding slower than other areas

We’re hearing from health systems across the country that physician office, surgery and diagnostic volumes have mostly returned to pre-pandemic levels. Consumers appear to feel comfortable coming back to scheduled appointments as long as social distancing and capacity can be managed. But they’re more reticent to return to “unscheduled” care settings that may involve a long wait, like urgent care clinics and emergency departments, where visits have stabilized at 75 to 85 percent of pre-pandemic levels.

The latter in particular has proved concerning to hospitals leaders, who have begun to ask, what if ED volumes never fully come back? (Around 15 percent of ED visits convert to inpatient stays, on average, making the ED an important source of downstream revenue for hospitals.) We spoke recently with a health system COO who realistically thinks that 10 percent of the volume could be gone for good, and recognizes that “from a public health perspective, that’s probably a good thing”, given that lower-acuity, non-emergent patients account for a portion of the “lost” volume.

But concerns about patients delaying much-needed care persist—amplifying the need for alternate channels, both virtual and in-person, for patients to access care and quickly connect to more intensive services if needed. Hospital leaders would be wise to prepare for a “90 percent future”, and adjust revenue models and cost structures to be less dependent on admissions and procedures that come through the emergency department.

 

 

 

 

Losing the edge on telemedicine?

https://mailchi.mp/365734463200/the-weekly-gist-september-11-2020?e=d1e747d2d8

What8217s Missing in the Health Care Tech Revolution

At the beginning of the pandemic, physicians and health systems implemented telemedicine solutions with unprecedented speed. In doing so, they went from mostly lagging behind payers and disruptors in digital medicine, to becoming the anchors who kept patients and doctors connected during the greatest health crisis in a century.

But over the past few weeks, we’ve detected a marked shift in the tone and focus of conversations around telemedicine with doctors and executives. Universally, systems have seen a drop in virtual visits as in-person care has returned—and most agree that today’s levels of telemedicine visits are lower than ideal.

“We peaked at 45 percent of outpatient visits delivered virtually in early May. Now telemedicine accounts for just five percent,” one physician leader told us. “I don’t know what ‘percent virtual’ is ideal, but I’m pretty sure it’s more than five percent.” Another leader described a shift from “rally to reality”.

At the height of the crisis, the entire system was singularly focused on keeping patients connected to care, bolstered by a loosening of regulatory and payment restrictions.

As systems now plan for a long-term virtual care strategy, we’re sensing a shift in focus to pre-COVID challengesoperations (centralization is needed to create a sustainable model, but each doctor wants to do virtual visits his own way), payment (should we really invest before we’re sure health plans will continue to pay at parity?), and turf battles (reemerging political discussions of who “owns” virtual care strategy).

Health plans, retailers and disruptors recognize the power of virtual care to build relationships and loyalty with consumers—and will invest heavily behind it. Providers have the advantage today. But to keep it, they’ll have to get out of their own way and continue to build, scale and refine their virtual care platforms.

 

 

 

Hospital revenue at risk in CMS’ proposal to move joint replacement to outpatient care

https://www.healthcarefinancenews.com/news/hospital-revenue-risk-cmss-proposal-move-joint-replacement-outpatient-care

Hospital revenue at risk in CMS' proposal to move joint replacement to outpatient  care | Healthcare Finance News

The Centers for Medicare and Medicaid Services’ push to move procedures from inpatient to less expensive outpatient care continues, with revenue at risk for lucrative joint replacement starting in 2021.

CMS’s continued push to the outpatient setting has been going on for some time, but the agency has found its sea legs in the recent hospital outpatient prospective payment system proposed rule, according to Stuart Clark, a managing director for The Advisory Board Company, in an August 27 presentation on payment updates.

CMS is slowly phasing out the inpatient only list over the next three years and is adding more services to the ambulatory surgical center list. There’s around 1,400 total codes on the list right now which are expected to be phased out by 2024.

MORE ON REIMBURSEMENT

Hospital revenue at risk in CMS’ proposal to move joint replacement to outpatient care

At stake is $3.2 billion in revenue for a one-day length of stay as 80% of revenue for all services is in joint replacement.

Susan Morse, Managing Editor

 

The Centers for Medicare and Medicaid Services’ push to move procedures from inpatient to less expensive outpatient care continues, with revenue at risk for lucrative joint replacement starting in 2021.

CMS’s continued push to the outpatient setting has been going on for some time, but the agency has found its sea legs in the recent hospital outpatient prospective payment system proposed rule, according to Stuart Clark, a managing director for The Advisory Board Company, in an August 27 presentation on payment updates.

CMS is slowly phasing out the inpatient only list over the next three years and is adding more services to the ambulatory surgical center list.

There’s around 1,400 total codes on the list right now which are expected to be phased out by 2024.

For 2021, CMS has added 11 new procedures to the ASC list, including musculoskeletal services and total hip replacement.

WHY THIS MATTERS 

Eighty percent of hospital revenue for all services is in joint replacement. At stake is $3.2 billion in revenue for a one-day length of stay.

Per hospital, 12-15 procedures may shift from a one-day stay to outpatient, according to Clark and Shay Pratt, vice president of Strategy and Service Line Research for the Advisory Board.

Hospitals may not see a huge amount of revenue at risk if they can continue to keep the services in-house, but in an outpatient setting.

However, there is less revenue to be made from the move to a lower cost care setting. And an estimated 83% of ambulatory surgical centers are physician-owned.

There is still debate on the efficacy of total hip replacement done as an outpatient service. Commercial payers say ASCs can provide total hip replacement, while opponents say they are not equipped for the service, according to the Advisory Board.

The comment period for the proposed rule is set to close on October 5.

Next year, CMS is expected to add cardiovascular services to the outpatient list, but the volume and revenue is not on as large a scale as joint replacement.

THE LARGER TREND IN TELEHEALTH

In telehealth, CMS is implementing incremental change as its use has increased dramatically during the coronavirus pandemic.

For Medicare reimbursement, 22 services have been added to the telehealth list. Of these, nine codes have been added permanently and 13 are approved through the end of the year in which the public health emergency ends.

Audio-only services are eligible under the public health emergency, but CMS is inviting input on how long they should remain eligible. The agency has said it’s uncertain about the value of an audio-only visit.

 

 

 

 

HAP and Henry Ford collaboration creates new health plan for Michigan businesses

https://www.healthcarefinancenews.com/news/hap-and-henry-ford-collaboration-creates-new-health-plan-michigan-businesses

HAP introduces innovative health plan for Michigan businesses in  collaboration with Henry Ford Health System

Health Alliance Plan (HAP) and Henry Ford Health System have furthered their partnership through the release of Pivotal, a new health plan for Michigan-based businesses.

The plan was created for businesses with more than 100 employees and offers customized benefit options for each company.

WHAT’S THE IMPACT

Pivotal’s network includes seven hospitals, more than 6,000 physicians and 3,500 ancillary providers including urgent care, labs, radiology, imaging, rehab services, long-term care and nursing facilities, and physical, occupational and speech therapy.

Its members will have access to providers within the Henry Ford Health System, Henry Ford Physician and Jackson Health networks, Henry Ford Allegiance Health, as well as HAP’s ancillary provider and pharmacy network, and its contracted pediatric providers.

The plan recognizes the current need for telehealth services by offering virtual care for zero cost-share for in-network visits.

Members can use Pivotal’s telehealth offerings in three different ways: through at-home video visits, clinic-to-clinic video visits where providers can connect with specialists at other facilities, and with e-visits where non-emergency visits are conducted through email.

Pivotal plans also come with concierge services that include personalized onboarding for every employer group, phone support, as well as guaranteed same-day appointments with a primary care physician for sick visits and specialist appointments within 10 business days.

THE LARGER TREND

HAP has been working with Henry Ford since it became a subsidiary of the health system in 1986.

Henry Ford leveraged another partnership with CarePort during the COVID-19 public health emergency to communicate directly with post-acute care providers to share the COVID-19 testing status of patients. This allows providers to take the necessary safety precautions, including deciding if the facility can admit the patient at all, triaging care and managing the use of personal protective equipment.

ON THE RECORD

“HAP and Henry Ford have a long history of working together and sharing the same focus,” Genord said Dr. Michael Genord, president and CEO of HAP. “Working together, we’ve made sure that as many Michigan businesses as possible have access to high-quality affordable care, whether they’re in Detroit or Jackson or anywhere in between.”

 

 

 

 

Survey: Health plans to cost $15,500 per employee next year

https://www.cfodive.com/news/health-plans-employee-cost/583816/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-08-21%20CFO%20Dive%20%5Bissue:29224%5D&utm_term=CFO%20Dive

Is Trump's debate claim about health care costs rising true? | PBS ...

More plans are expected to cover virtual office visits and expanded mental health and well-being offerings.

Dive Brief:

  • Large employers are projecting their health care benefit costs to surpass $15,500 per employee in 2021, Business Group on Health’s annual survey finds.
  • That would represent a 5.3% increase in costs, estimated at $14,769 this year.
  • The health plans are also expected to expand virtual care, mental health and emotional well-being offerings to employees.

Dive Insight:

The 5.3% increase is slightly higher than the 5% increases employers projected in each of the last five years, according to the 2021 Large Employers’ Health Care Strategy and Plan Design Survey.

In line with recent years, employers will cover nearly 70% of costs while employees will bear about 30%, or nearly $4,500, in 2021. 

“Health care costs are a moving target and one that employers continue to keep a close eye on,” said Ellen Kelsay, president and CEO of Business Group on Health. “The pandemic has triggered delays in both preventive and elective care, which could mean the projected trend for this year may turn out to be too high. If care returns to normal levels in 2021, the projected trend for next year may prove to be too low. It’s difficult to know where cost increases will land.”

The growth in virtual care is one of the trends identified in the survey. Eight in 10 health plan executives said virtual health will play a significant role in how care is delivered, up from 64% last year and 52% in 2018. More than half (52%) will offer more virtual care options next year.

Nearly all employers will offer telehealth services for minor, acute services while 91% will offer telemental health, and that could grow to 96% by 2023.

Virtual care for musculoskeletal management shows the greatest potential for growth. While 29% will offer musculoskeletal management virtually next year, another 39% are considering adding it by 2023. Employers are also expanding other virtual services including the delivery of health coaching and emotional well-being support. These offerings are expected to increase in the next few years.

“Virtual care is here to stay,” said Kelsay. “The pandemic caused the pace to accelerate at an astronomical rate. And virtual care is now garnering growing interest and receptivity from both employees and providers who increasingly see its benefit.”

Another key trend for employer plans in 2021 is the expansion of access to virtual mental health and emotional well-being services. More than two-thirds (69%) said they provide access to online mental health support resources such as apps, videos, and articles. That number is expected to jump to 88% in 2021.

Other findings:

  • More employers are linking health care with workforce strategy: The number of employers who view their health care strategy as an integral part of their workforce strategy increased from 36% in 2019 to 45% this year.
  • On-site clinics continue to grow: Nearly three in four respondents (72%) either have a clinic in place or will by 2023. Some employers are expanding services — 34% offer primary care services at the worksite, and an additional 26% plan to have this service available by 2023.
  • Growing interest in advanced primary care strategies: Over half of respondents (51%) will have at least one advanced primary care strategy next year up from 46% in 2020. These primary care arrangements, which move toward patient-centered population health management emphasizing prevention, chronic disease management, mental health and whole person care are key focus areas for employers.
  • Employers remain concerned about high-cost drug therapies. Two-thirds of respondents (67%) cited the impact of new million-dollar treatments as their top pharmacy benefits management concern.

 

 

 

 

Patient-provider encounter trends have stabilized, but remain significantly lower than before COVID-19

https://www.healthcaredive.com/news/patient-provider-encounter-trends-stabilized-below-normal/583599/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-08-17%20Healthcare%20Dive%20%5Bissue:29123%5D&utm_term=Healthcare%20Dive

Measuring a patient's vital signs without any contact - ISRAEL21c

Dive Brief:

  • In-person doctor visits plummeted during the start of the COVID-19 crisis in the United States, but have rebounded to a rate somewhat below pre-pandemic levels, according to a new analysis issued by The Commonwealth Fund and conducted by researchers from Harvard Medical School, Harvard University and the life sciences firm Phreesia.
  • According to data compiled through Aug. 1, all physician visits were down 9% from pre-pandemic levels. That’s significantly improved compared to data from late March, when visits were down 58%. Although the rebound got major traction beginning in late April, it began plateauing in early June, when all visits were 13% lower than normal. As of early August, in-person visits were down 16% compared to pre-COVID levels. States that are currently coronavirus hot spots are seeing bigger declines than states where the case levels are lower.
  • Meanwhile, telemedicine encounters have settled in at rates much higher than pre-pandemic levels. However, they still make up just a fraction of patient-provider encounters for care. As of the start of this month, they comprised 7.8% of all such encounters. That’s compared to a peak of 13.8% in the latter part of April. Prior to COVID-19, they were only 0.1% of all visits.

Dive Insight:

COVID-19 has widely disrupted healthcare delivery in the United States. However, it is becoming clear that as the pandemic has become a part of everyday life for the time being, how patients visit their medical providers has also settled into a pattern.

According to Harvard researchers using data from Phreesia’s more than 50,000 provider clients, the plunge in patients seeing their physicians has rebounded from its nearly 60% dive in early spring. However, with all patient-physician encounters still consistently down from pre-COVID levels, the study’s authors warn that “the cumulative number of lost visits since mid-March remains substantial and continues to grow.”

Meanwhile, COVID-19 hotspots in the South and Southwest are depressing patient-provider encounters for the time being. Encounters were down as of late July by 15% in Arizona, Florida and Texas, compared to 12% in the Northeast and 8% in all other states.

Among medical specialties, only dermatology has seen a rebound beyond pre-COVID levels, with encounters up about 8% overall. But primary care visits are down 2%; surgery encounters, 9%; orthopedics, 18%; and pediatrics are in a 26% decline.

That the encounters between patients, doctors and other providers remains lower than normal has sparked some concerns about practices and other medical enterprises moving forward. HHS just earmarked $1.4 billion for nearly 80 children’s hospitals across the United States to try to shore them up financially.

The private sector has also undertaken an initiative to encourage patients to return to their providers. Insurer Humana, along with the Providence and Baylor Scott & White healthcare systems, launched an advertising campaign last month to encourage patients to seek out healthcare needs, even during the historic pandemic.

 

 

 

 

 

Home as the center of “care anywhere”

https://mailchi.mp/647832f9aa9e/the-weekly-gist-august-14-2020?e=d1e747d2d8

We’re increasingly convinced that virtual physician visits are just one part of a continuum of care that can be delivered in the convenience and safety of the patient’s home. Health systems that can deliver “care anywhere”—an integrated platform of virtual services consumers can access from home (or wherever they are) for both urgent needs and overall health management, coordinated with in-person resources—have an unprecedented opportunity to build loyalty at a time when consumers are seeking a trusted source of safe, available care solutions.

The graphic above outlines the key components of a comprehensive home-based care model,

which requires the integration of three main elements:

a technology backbone,

a supply chain to provide services like labs and diagnostics,

and a tiered, flexible workforce. 

Of course, these infrastructure needs will increase with care acuity level, ranging from a simple virtual visit to home-delivered vaccination, all the way to hospital-level care at home. Delivering safe, accessible care within the home can be the foundation for an access platform that creates ongoing consumer loyalty—especially for systems who can build a financial model less dependent on payers’ long-term support for telemedicine reimbursement “parity”.

 

 

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

Gold Bricks | Gold bullion, Gold reserve, Fort knox gold

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. 

 

 

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.