The COVID-19 health crisis is presenting developing challenges for healthcare stakeholders, some of which significantly differ from just a month ago. For instance, in mid-March, the federal government delivered guidance that non-essential elective surgical and dental procedures ought to be postponed. Today, the conversation around this issue has shifted toward how U.S. patient care organizations could fully open their operations to elective surgeries, by complying with specific CMS requirements.
This is just one example of how new challenges continue to arise and existing ones evolve over time during a global health pandemic. The Washington, D.C.-based Advisory Board, a healthcare improvement company and division of Optum, has been at the forefront of keeping overburdened patient care leaders up-to-date with the latest information around COVID-19 they need to know, while providing strategic advice to help combat these progressing areas of concern.
The firm’s vice president, executive insights, Christopher Kerns, recently spoke to Managing Editor Rajiv Leventhal about hospitals’ and health systems’ pressing financial needs in the near- and long-term, what needs to happen for these organizations to reopen, if disease surveillance and contact tracing could work in the U.S., and the future outlook on testing capacity. Below are excerpts of that discussion.
Beyond the everyday patient care challenges that get closely examined in the mainstream media, what are some other core COVID-19 challenges you’re hearing about from health system leaders on the ground?
One area of core concern is around the near-term financial challenges. We know that elective procedures have been eliminated, and most people don’t quite realize how significant that is. Our calculations show that for a typical organization, these electives [account for] about 51 percent of their revenue, and that’s what’s driving a lot of the cost-control challenges now. But what many people don’t understand is that this pent-up demand is likely not going to come back; a lot of that demand is just going to be lost.
One reason for this is that [more] patients will seek alternative types of care. So, for example, if they were planning on getting their knee replaced, now they [could accept] having a limp along with doing physical therapy for the short-term. Second, there is a demand destruction in that there are simple economic factors that will drive down people’s insurance coverage or make them less likely to want to incur the cost of a deductible. When I talk to health system leaders, they seem to be thinking they might be able to get 80 percent of [the business] that was [previously] there, at best. And that’s just an estimate from talking to a handful of CEOs and CFOs.
I also think there’s a challenge of supply, so even if there was no demand that was destroyed by having elective procedures deferred by a few months, not every health system will be able to run itself with extra hours. This means that night and weekend [services] will be necessary in order to capture a lot of that pent-up demand. For many organizations—even if they have the willingness among their physicians and their proceduralists to do this—they don’t have the nursing capacity to make it happen, especially after a period in which the nursing staff has worked themselves ragged managing COVID patients. That’s a real challenge; being able to have the adequately supply to capture that demand, even if it’s still there.
When the spread is more under control, what will be financial impact of missing out on so much revenue during this time?
The cash-flow challenges are dire right now. I can’t sugarcoat it. A lot of organizations that have cash-on-hand exceeding 180 days will be a in a little better position, and we’re likely to see a desire to push for more consolidation. Whether or not regulators allow that is an open question. For rural providers especially, or for markets where hospitals have lower [patient] occupancy rates right now—say below 55 percent—you will likely see some closings. I also think you will see a push toward different forms of care deliver; telehealth will become much more mainstream, now that we have two months of patients [using it] for managing chronic or primary care conditions. Finding a sustainable financing model for that will be a real challenge; it’s what has limited adoption so far.
One other challenge people aren’t considering is that it’s not just elective procedures being depressed right now. A lot of non-electives are not happening either; not just those related to trauma and influenza that you’d expect because people are not getting the flu or into car accidents, but people aren’t getting their cancer screenings and not willing to check out their chest pains. If they have minor pain in their knee, hip or foot, [for example], they’re not going to the hospital to check that out, even if it’s a hairline or compound fracture. So what we are likely to see is a lot of those ‘non-elective’ visits leading to significant medium-term complications. This means that not only are we are risk for another COVID surge this fall, but we’re at risk for a minimum surge of preventable complications resulting from the [hesitation] on the part of patients to go to hospitals right now. This is worrying a lot of clinical leaders.
So, generally speaking, many non-COVID patients with pretty serious issues are still avoiding treatment?
People are avoiding hospitals because they don’t want to get infected, and second, there is an expectation they won’t be seen since all the headlines show that EDs are being swamped with COVID-19 patients. Third, it’s a selflessness knowing that hospitals are swamped, so they don’t want to be adding to that burden if they don’t have to. All of these reasons [combined] are depressing visits to hospitals that ordinarily wouldn’t be considered elective.
What advice can you offer health system leaders who have to grapple with different data projections in order to make critical decisions for their organizations?
This is the big question; when can a hospital reopen if they aren’t experiencing a surge right now? A lot of that will depend on the restrictions coming from your state governor, so it will be outside a hospital or health system’s control. For the three big service lines—oncology, cardiovascular and orthopedic— you should have a plan to expand capacity as soon as possible once you’re allowed to reopen, so you can capture as much of that pent-up demand as possible.
With each passing week and deferred procedure, there is likely to be some demand that’s destroyed. So the longer you wait, the more likely that demand will be gone for good—either because the patient gave up on having it or because they went to a competitor. You need to have a plan for being able to capture that, and expanding capacity by up to 20 percent, if necessary, will be extremely important.
As far as determining when to reopen—the general guidelines we have been hearing are 14-day declines in the 3-day [average of] admission or mortality rate. Infection rates are different since they’re dependent on testing; mortality rate is a lagging [metric], but admissions are a good near-time indicator of whether we are seeing declines or not.
What’s your perspective on the surveillance/contact tracing situation right now?
There is a lot of uncertainty around the technologies that Apple and Google are developing. They are Bluetooth-related, so it’s a little unclear on how effective it will be if you happen to be around a number of other people all with their Bluetooth receivers on. So there are efficacy questions.
Looking at the success South Korea had, you need to remember it wasn’t the Bluetooth connectivity that they looked at. They looked at actual GPS location tracking data, facial-recognition CCTV surveillance, and monitoring credit card transactions. But all three of these have pretty significant legal limitations in the U.S., so our view is that contact tracing is likely to be a tool to speed reopening, but we need to see how effective Bluetooth-based technologies alone are in ensuring that contact tracing has any real efficacy. It’s better than nothing, but will it lead to some of the same degree of success that South Korea had? Probably not, because we don’t have the same level of surveillance. And it’s also far from clear that U.S. voters, let alone the legal system, would be able to tolerate that level of intrusion.
Can you offer a perspective on what will be needed from a testing standpoint in order to reopen the economy, nationwide?
The positivity rate of the testing indicates that we aren’t at an adequate testing level yet. As of last week, the positivity rate was north of 20 percent. Epidemiologists want to see that number get down to the mid-single digits, because the positivity rate being as high as it is now means we are testing largely symptomatic people.
Second, to get that testing capacity up, we will need a diversity of different types of tests—a mix of the current tests out there now, with the fast throughput tests, and the ones you can administer at home. All of these will need to be made available for folks who present with different symptoms.
Third, it’s not just the testing capacity; it’s the processing capacity. Unfortunately, the diagnostic community has been responding to this aggressively, and that’s one of the biggest limitations. We can have a million tests done, but that doesn’t mean that we can actually process 2 million tests that might come in in a week. That’s the big limiting factor right now.
Finally, the antibody testing will give you a sense of how much of population actually has immunity. The larger that number, the more confident that governors, policymakers, and public health officials will have in reopening the economy. That will let them know how close they’re getting to herd immunity.
