At the start of 2020, we talked about voice-assisted technology, wearables and interoperability as being the hot topics for the year in health care. But by early March, COVID-19 took hold around the world and HIMSS was canceled, hospitals were planning for surges and millions of patients came to embrace telehealth. In addition, the rising awareness of social justice protests has an important implication as we examine social determinants of health and their impact on communities of color.
The pandemic has changed the health care landscape for the rest of 2020 and likely for years to come. As we enter the second half of 2020 – a year most of us will never forget – we’re revisiting our earlier predictions and finding that a majority fall into two main groups: financial viability and innovation. These themes will play a vital role as hospitals and health systems determine their strategies for the remainder of the year.
1. Finding efficiencies with data and analytics: The AHA estimates a total four-month financial impact of $202.6 billion in losses for America’s hospitals and health systems, or an average of $50.7 billion per month. Despite four stimulus packages and a reported fifth on the way, these funds may not fill the revenue gap for health systems. With decreased revenues, negative operating margins are becoming all too common, and health systems are responding with deep cost cutting while seeking efficiencies. COVID-19 calls for new ways of looking at patient activity, community spread, capacity projections, personal protective equipment supply, etc. Timely reporting sourced from near real-time data and analytics will play a major role in accelerating health system recovery and helping leaders better understand how to efficiently allocate available resources.
2. Greater emphasis on social determinants of health: The disproportional impact of COVID-19 on racial and ethnic minority populations, in addition to increasing awareness of social justice protests, has highlighted long-standing, systemic inequalities in health care. The industry must have a greater urgency in addressing social determinants of health clinically and operationally to make meaningful improvements in patient outcomes.
3. More consolidation: An April survey from the Primary Care Collaborative and The Larry A. Green Center showed that half of primary care practices were unsure if they’d have enough cash to keep their practices open. The fee-for-service business model caused immediate financial distress for practices. These organizations may look for a lifeline from larger health systems, yet many of these same health systems are looking to trim poor performing practices and locations. More rural hospitals will seek partnerships to survive, and telehealth services will extend networks of coverage in an asset-lite approach.
4. Government as the top payer: With higher unemployment rates, commercial insurance enrollment is predicted to decrease, while self-pay, exchanges and Medicaid enrollment may increase. This payment shift may negatively impact the margins of already cash-strapped physician and hospital-based organizations. There could be increased calls for continued government financial support to fill the cost gap along with increasing pressure to expand Medicaid in states that have yet to expand coverage.
5. Federal funding for infrastructure: For the first time in the modern health care IT era, the federal government is looking to expand funding for public health infrastructure. In support of improving public health and better understanding social determinants of health (SDOH), health care organizations will be asked to contribute more data and be accountable for community outcomes.
6. States in need: While Congress has allocated $150 billion in COVID-19 emergency funds so far to state and local governments, territories and tribal areas, governors are asking for an additional $500 billion in federal aid to close budget gaps. With falling tax revenues and rising unemployment, state budget shortfalls are predicted to reach nearly 10% in the 2020 fiscal year and more than 20% in 2021. Officials will be forced to make tough choices, including significant cuts to Medicaid benefits for patients and payments to health providers.
7. Easing of regulations: Under the emergency declaration, the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration (FDA) have relaxed longstanding regulations to encourage telehealth, including payment parity, location flexibility, visit type and cross-state provider credentialing. CMS also provided enhanced and accelerated payments to providers. The durability of these changes is unclear, but health systems are encouraging an ongoing easing of regulations to allow new business models to emerge.
8. Embracing telehealth: The adoption and acceptance of telehealth has expanded more in the past three months than in the past ten years. Within days, health systems and providers scrambled to offer new telehealth services. While some drop-off is inevitable with the reopening of clinics and offices, this newer way of delivering care is here to stay. While primary care practices are big winners here, most providers, especially those in rural areas, will look for ways to provide more specialist, behavioral health and patient monitoring services in virtual settings. The emergence of hospital-at-home management services is no longer a novelty.
9. Customer relationship management (CRM) for health care: With pressure on margins and less than full use of inpatient care, more patients will be seen in ambulatory venues. Knowing patients and their health and care needs will be essential. To foster more consumer engagement and increase operational efficiency and care quality, health care providers will embrace the full potential of CRM systems.
10. Real-world data and discovery: EHR health care data has the potential to play a role in understanding disease prevalence, SDOH and treatment efficacy of COVID-19 therapies. With traditional clinical trials disrupted during stay-at-home orders and social distancing, EHRs can offer real-time post-market surveillance in support of drug discovery and deployment. EHRs may also play a key role in vaccine safety, administration and clinical effectiveness in line with the FDA’s Real-World Evidence Program. Real-world data, from sources like EHRs, mobile devices, disease registries and claims and billing information, can be collected without requiring someone to go to an office or trial site. This digital approach could be leveraged to speed up development timelines in the post-pandemic health care world as well.
11. Artificial intelligence (AI) and machine learning refinement: While the promise of AI remains, the field of AI and machine learning providers will tighten as the market places a greater focus on clearly demonstrable value. Those offerings with appropriate funding and clear returns on investments will emerge from this dynamic period as winners.
The first half of this year has taken turns we could have never imagined. The months ahead are bound to challenge health systems financially as they navigate the effects of the pandemic and challenge society to accept new behaviors and guidelines. But providers can also emerge from this able to provide better and smarter care, simply by continuing to use those ideas that were uncovered when the system was pushed to its limit. While the journey will not be easy, health care organizations are resilient, and we’re optimistic about the change to come.
The COVID-19 pandemic has united the entire health care ecosystem to work around the clock to solve challenging issues that our industry has never encountered at such speed and scale. Learn more here.
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