A healthcare organization’s financial position prior to the COVID-19 pandemic and how hard its community was hit by the disease may ultimately determine how the organization fares post-pandemic.
David Burik, a leader in the commercial health practice at Guidehouse, which acquired Navigant last October, anticipates much variation in how well organizations weather COVID-19 and the types of long-range challenges providers will face in the pandemic’s aftermath. Burik believes the top challenges include how organizations:
Manage the recovery period
Adapt to the new normal
Navigate a period of increased consolidation
COVID-19 has had a wide-ranging and varied impact on the nations’ hospitals, Burik said. Some communities have had few cases with little economic displacement, and providers in those areas already have a close to full elective surgery schedule. But other organizations have seen 200 COVID patients in communities with great job loss and public concern about recovery.
Unpredictable recovery period
Burik projected that prior to the expected wave of mergers, acquisitions and consolidation, the recovery period will vary state-to-state and region-to-region. Key issues to watch, he said, will be:
Elective surgery volume
Emergency department (ED) visits
Elective surgery volume. Although many organizations have begun posting elective surgery schedules in recent weeks, some have been reporting considerable variation in how quickly those schedules are being populated, according to Burik.
“I've talked to organizational leaders who have figured out for the first time in their history how to run 18 hours in the OR, how to schedule on Saturday, how to still keep capacity for EDs,” he said.
For many organizations, the recovery process is far more daunting than simply diving into the backlog, Burik said. Aside from some surgical practices, many organizations did not have the time, personnel or level of commitment to keep track of their surgery cases, communicate with patients about when they could move forward with an elective surgery and determine patient interest in doing so.
“[A health system or hospital] might have had a case scheduled for April 4, but that patient may have lost their insurance, may have lost their interest in having the elective surgery, may be afraid to come back to the hospital and may have decided to go to an institution that is known not to have a COVID case,” Burik said.
Hospitals in certain areas of the country were poised as of late April to see how populating elective surgery schedules would play out, according to Burik.
Even healthcare organizations that have the patients ready to show up for elective surgery may not have needed anesthesia coverage, surgical nurse availability and all the equipment needed to do the procedure.
“The recovery [process] is probably more protracted and less certain than we all would like it to be,” Burik said. “If you’re thinking about the recovery of a health system —outpatient surgery and inpatient admissions are two key drivers for you, and the ED is a key driver of that. You’re not going to go to the same visit levels you had on Feb. 28.”
“I think nationally we're seeing visits in the ED down a lot,” he said, noting that the rates at which visits return to normal also are likely to vary considerably.
Outpatient surgery. Burik expects the recovery for outpatient surgery to be like that of elective inpatient surgery.
“Are you going to have a surge in [outpatient surgery] and make it up?” Burik said. “Or are you going to have a gentle increase and, actually at the end of the year, find you did … a lot less surgery than you had budgeted?”
Many health systems are on their way to figuring out how the COVID-19 pandemic has impacted their budgets. What’s more challenging is figuring out how long the ramp-up will take and just how extensive it will be, Burik said.
Adapting to the new normal
The adoption rate of telehealth has just had this giant leap forward,” Burik said. Organizations need to project the proportion of telemedicine and digital health they will provide, relative to in-person care. “And that has remarkable impact,” Burik said. “It's amazing how quickly just about every institution I talk to has been able to pretty flawlessly handle a huge increase in telehealth or digital health — to the point that I think most folks who are being treated for COVID are advised, ‘Just don't come to hospital; we'll do everything over the phone.
How organizations adapt to the new normal, in which a certain volume of telehealth will replace physician office visits and remote work for back-office staff will continue, will determine how well they fare post-pandemic.
“The adoption rate of telehealth has just had this giant leap forward,” Burik said. Organizations need to project the proportion of telemedicine and digital health they will provide, relative to in-person care. “And that has remarkable impact,” Burik said. “It's amazing how quickly just about every institution I talk to has been able to pretty flawlessly handle a huge increase in telehealth or digital health — to the point that I think most folks who are being treated for COVID are advised, ‘Just don't come to hospital; we'll do everything over the phone.’”
Because telehealth is never going back to a pre-COVID-19 scenario, institutions must determine:
Whether they have adequate infrastructure
What their normal volume of telehealth will be
How to harden and scale up the infrastructure to handle the volume
Whether payers will support telehealth
“Then it really gets hard,” said Burik. “What do you do with all the capacity you had for physical visits?”
“If you're an operation that had 300,000 visits a year and now it's 150,000 visits a year, that's a lot of space and facility and people that just became extraneous assets.”
Institutions cannot just apply the budgetary assumptions they had pre-COVID-19, according to Burik. Just as telehealth is thoroughly scalable, so too are revenue cycle, accounts payable and corporate functions that also went virtual almost overnight, according to Burik.
"I think, once [organizations] work on the revenue part of this — telehealth, surgery and ED — they're going to look at back-office corporate services that end up being physical and fixed and try to figure out if driving them to be more virtual and more in the cloud will increase efficiency and effectiveness.”
“Something like this really creates winners and losers [among organizations],” Burik said, referring to the disparities in levels of financial stability before the pandemic hit. “There will be organizations that find themselves stronger in their communities [and] in their market compared to what competitors they might have. And there will be others that find themselves weaker.
“So, in a matter of months we're going to have a greater bifurcation of organizations that are positioned to grow and succeed and those organizations which are really challenged to survive in an era of probably greater consolidation than we've seen to date.”
The need for “greater resiliency” to counter another wave of COVID-19 or a different public health emergency gives organizations the impetus to join with stronger organizations, Burik said.
Regarding wider geographic regions, Burik said, “We see greater disparity between well-positioned organizations and challenged organizations, which creates a market and a discussion for greater consolidation.”
Moving forward after recovery
Assuming the nation experiences a recovery period during which it can prepare for a possible resurgence of COVID-19, Burik said organizations should strive to communicate to authorities that they can handle emergent COVID-19 cases while maintaining an open ED and a full surgery schedule. That effort could allow them to maintain something approaching normal operations during a future pandemic.
Getting to that point, Burik said, requires organizations to do better with ventilators and PPE, to have different health systems work together in a cooperative effort across both corporate lines and state lines and to put in place optimal protocols and procedures for COVID-19 care.