For a few years now at least, there has been a lot of discussion about disruptive elements emerging in U.S. healthcare, such as CVS’s acquisition of Aetna and the potential minute clinic/pharmacy benefits management powerhouse that might be created over time out of that transaction; or the emergence of an agreement among Amazon, J.P. Morgan Chase, and Berkshire Hathaway two years ago, to create a joint venture that might rearrange the landscape around consumer navigation of the healthcare system (which last year acquired the name “Haven”). But what about pandemics…?
The fact is that the disruption being created across U.S. society, and indeed, global society, by the COVID-19 pandemic, has been tremendous, and unprecedented. At the time of this writing, the numbers of both confirmed cases and deaths from COVID-19 in the United States were rising so fast that any reference here would certainly be outdated by the time this went to press. Suffice it to say that no disease outbreak in contemporary history has had the same impact on our country or the world. Indeed, the only pandemic that comes to mind that had such a broad reach was the “Spanish flu” pandemic of 1917-1918, and that was over a century ago, and played out differently and under very different societal circumstances.
So COVID-19 has been devastating for U.S. and global society. But it has also specifically disrupted the U.S. healthcare delivery system on an unprecedented level. In several major cities as well as in many smaller cities and small towns, hospital beds have been filled to capacity, ICUs have been filled, personal protective equipment (PPE) has run out or nearly so, significant numbers of clinicians and hospital and clinic staff members have been sickened, and a shortage of ventilators has imperiled patients nationwide.
In addition to the immediate patient care and care management issues that the pandemic has created, it has also dealt a body blow to provider finances. As the Chicago-based Kaufman Hall consulting firm reported in late April in its “National Hospital Flash Report,” “Hospitals across the country took a financial beating in March, as the first effects of the COVID-19 pandemic hit the industry, particularly in the second half of the month. Volume and revenue declines, along with flat expenses, resulted in a dramatic fall in margin within a matter of weeks, plunging not-for-profit hospitals, which historically operate on thin margins, deep into the red.” And that was the first March-based, data.
One of the core challenges is that when it comes to the COVID-19 pandemic, everything—everything—turns out to be deeply interconnected. As COVID-infected patients have surged into hospitals, their care has required intensified staffing; careful planning for surge capacity in terms of general med-surg beds, and most of all, in terms of ICU beds; the planning for surge capacity in terms of the need for ventilators; and for physician, nurse, respiratory therapist, and other clinician staffing, as well as general non-clinician staffing. And of course, the fact that the vast majority of hospitals followed guidelines issued in March by the Centers for Disease Control and Prevention (CDC) and canceled or postponed all or nearly all elective surgeries in March, in order to prepare the way for surges of COVID-19 patients, has meant devastating financial losses nationwide. As Advisory Board leader Christopher Kerns confirmed to us, 51 percent of hospitals’ revenues come from elective procedures, while a large bulk—at least 60 percent of hospitals’ positive margins overall—come from those procedures.
So COVID-19 has profoundly disrupted the operations of hospitals, medical groups, and health systems. But the one bright spot in all this has been around telehealth. The announcement on March 30 by the Centers for Medicare & Medicaid Services (CMS) of a series of blanket waivers around care delivery, with its major focus being telehealth, instantly revolutionized healthcare delivery, with a temporary lifting of the vast web of restrictions around, among other things, interstate licensing of physicians and nurse practitioners. Industry observers are predicting that the relaxation of those restrictions on clinical practice will inevitably be made permanent.
What’s more, facing the challenge of having to minimize the potential for infection all around while continuing to see patients, hospitals, emergency departments, medical clinics, and other patient care organizations have shifted dramatically quickly to telehealth-facilitated care delivery. Within weeks of CMS’s announcement, huge numbers of patient care organizations had already shifted as much care delivery as possible to telecare.
So the U.S. healthcare system is going through enormous upheaval and forced change right now. But in the midst of the crisis, ingenuity and innovation are emerging everywhere.
In this Special Section, we present articles on innovations and other important developments in the industry, around the COVID-19 crisis. We hope they will be useful and helpful to our readers.