Chartis Top Reads – Week of October 11 - 17, 2020

Our research team breaks down this week’s top healthcare news.


Top Reads Overview

In an age of unprecedented change, staying current has never been more important. Our team at Chartis is curating news most relevant to the healthcare industry and tracking the topics that are trending on seven key issues: clinical quality and risk, digital and advanced technology, financial sustainability, health disparities, the health ecosystem of the future, partnerships, and the provider enterprise. Each week, we break down what’s happening and why it matters.

Clinical Quality, Risks and Advances

The Buzz This Week

At its core, the scientific method is about proving or disproving a hypothesis or initial conjecture. After seven months, what have we learned from science about COVID-19? Some of the initial speculations about COVID were wrong. It was likely incorrect, as some originally suggested, that masks do not prevent spread of the virus. While there is not yet a double-blind trial proving that masks work as a method of prevention, there is enough scientific evidence to show the preliminary hypothesis was wrong. It also has turned out to be wrong that COVID is simply a respiratory virus. We have learned COVID may present with varying symptoms, not only a cough and fever, and many of those who do survive a COVID illness have ongoing chronic conditions affecting organs other than the lungs. Ongoing cognitive symptoms like brain fog are estimated in at least 20 percent of cases.

Some of the preliminary hypotheses about COVID were right. Initial calls to flatten the curve in order to avoid causing detrimental effects by overwhelming the healthcare system were correct. In places that were unable to quickly enact stay-at-home precautions, COVID rates grew exponentially, and death tolls were higher. Even after seven months of the pandemic, there are many COVID hypotheses that are still to be determined. We do not know how effective a vaccine will be or to what extent having COVID once gives future immunity or for how long.

Why It Matters

While there is still much to be learned about COVID-19, we know significantly more than we did seven months ago. Knowing better means we can do better. In addition to the deaths COVID has caused directly, there has also been a ripple effect from disruptions in care, causing increases in non-COVID deaths from cancer, chronic conditions, addiction, and other diseases. The month of May saw a 40 percent drop in ER visits and a 42 percent increase in overdoses. The healthcare system must be able to continue to treat non-COVID patients in need of care while simultaneously treating COVID patients, and communication needs to be clear that non-COVID patients are safe to seek that care. Keeping the COVID curve as flat as possible is then vital so that both COVID and non-COVID patients have access to providers and care settings. For the growing percentage of patients who do survive COVID, their need for care may not stop after the initial illness. Many patients will need ongoing care, some of which may be long term. The healthcare system will need to develop protocols and specialty clinics to address and treat the various sequalae of “long-haul” COVID patients. On some aspects of COVID, the scientific community may still be trying to reach consensus through evidence. In those cases, following guidance that has a likely benefit and doesn’t pose any harm and only minor inconveniences but has a likely benefit (such as social distancing and wearing masks) is the prudent choice.

Health Ecosystem of the Future

The Buzz This Week

Consumerism has been an increasingly influential force in healthcare for years, changing the balance of power between health systems, payors, and consumers (with more weight falling in the consumer category). This has led some health systems to design their care delivery models with more consideration for consumers’ needs and desires, including implementing digitally enabled modes of care delivery, such as telehealth or virtual care. To clarify terminology, “consumers” in this context refers to both patients and health professionals, as health systems not only need to attract and keep patients in their networks to be successful but also need to form strong relationships with employed and aligned physicians and other health professionals to support their core business.

Patient-consumer preference for digitally enabled healthcare is growing — both as we become a more tech-enabled and savvy society and as a result of increased exposure to and experience with virtual care during the COVID-19 pandemic. Experts suggest that for patient-consumers, the experience with virtual care can make the desire and preference for those services stronger. Provider-consumer behaviors and preferences are also changing, though more from necessity driven by the impact of COVID-19 on their practices. As an example, according to a recent report in Modern Healthcare, Jefferson Health in Philadelphia “had a telehealth program for years, but only doctors willing and interested were participating. COVID-19 has brought on physicians who had no other choice as their clinics closed for in-person care in the early months of the pandemic.”

Overall, we are collectively becoming more comfortable with the concept that many healthcare services can be delivered remotely through digital means, and potentially should be if quality and outcomes measures are similar to (or better than) in-person visits, alongside improvements to access and efficiency.

Why It Matters

With the increased relevance of consumerism, advanced technology capabilities, and necessity driven by COVID-19, telehealth and virtual care experienced a huge spike in the early months of the pandemic when physician practices and clinics had to close. Since then, telehealth use has dropped for most specialties as in-person visits resume, driven by clinical requirements, some patient preference for a return to in-person interaction, and physician preferences. One survey found that 52 percent of physicians polled in June and July planned to continue offering virtual patient consultations, while 58 percent had reservations about the quality of care they could offer remotely (Decision Resources Group Re-Taking the Pulse survey, 2020).

However, some specialties have retained high telehealth usage — behavioral health in particular (see the Chartis and Kythera Labs Telehealth Adoption Tracker). As World Mental Health Day just took place October 10, many in the field brought attention to the fact that mental and behavioral health services are enormously undersupplied, and the need has grown due to the effects of the pandemic. The sustained level of use of telehealth in this specialty signals that the platform is working relatively well for both patients and behavioral health providers. When implemented well, it is meeting quality expectations; growing the supply of services available through capacity expansion (as a result of reduced travel time and a reduction of office operations tasks associated with in-office care delivery); and enabling patient access from almost any private location. (It should be noted that telehealth does also introduce disparities for rural areas and for those who do not have a reliable internet connection: see last week’s Chartis Top Reads).

How does a health system determine the optimal level of telehealth utilization and structure services in a way that maximizes retention of patients and physicians in their health network? The most fundamental element is implementing the “right” tool(s) that satisfy consumers, and that means better understanding consumers. To do this, some health systems are investing time, energy, and dollars to solicit real-time feedback from virtual health users and incorporate improvements in short order. Examples include: adding icons within a patient portal, showing whether a visit is to be conducted in person, via phone, or via video (Novant Health, N.C.); and training providers in better virtual communication skills after patient surveys indicated that communication was one of the most influential factors in generating higher ratings for each visit (Stanford Health Care, Calif.).

Financial Sustainability

The Buzz This Week

Much has been written about the financial toll U.S. hospitals and health systems face from drastic reductions in elective procedure revenue and increased costs from PPE supplies and additional staff wages due to COVID-19. But there is another economic struggle providers and patients are facing due to the rising number of patients with high deductible plans. In some cases, those with high deductible plans will forgo much of their care so as not to pay a large sum for a single visit before the deductible has been met.

While this is not a new phenomenon, the pandemic has caused many families to be in more dire financial positions, forgoing necessary care or being unable to pay the deductible when care is received. In the cases of those requiring care for COVID or another chronic condition that has become urgent as a result of delaying care during the pandemic, the choice to delay or avoid care may no longer be an option. Patients may now be hit with the entire $5,000-$10,000 deductible from one hospital stay but do not have the ability to pay, leaving them with a large bill and hospitals with growing bad debt. Adding to the urgency of the situation is the fact that many hospitals have yet to receive reimbursement for uninsured COVID care they have provided. The Department of Health and Human Services has only given out $881 million in payments as of Sept. 30 to compensate providers for uninsured COVID care due to coding issues, eligibility, and funding concerns.

However, not everyone has experienced negative financial impacts of the pandemic. Payors saw gross margins for group plans increase by 22 percent year over year. Medical loss ratios, the proportion of every premium dollar spent on medical claims and improvements to quality of care, have also declined throughout the pandemic, likely due to patients receiving less care, further indicating profitability for payors.

Why It Matters

A growing trend prior to COVID-19 was transferring more of the healthcare dollar to the employee, often through high deductible plans. At a time when the economy is unstable and many are losing employment or seeing declining family income, one wonders whether high deductible plans are sustainable for the consumer and the provider. While high deductible plans can be a great option for healthy, minimal users of the healthcare system, they should not be used as a disincentive for people to seek care in the midst of a pandemic. When care is provided for COVID, providers must be adequately reimbursed, regardless of patient insurance status. All but $31 billion of the originally allocated $175 billion provider relief funds has already been allocated. Less than $1 billion of this sum was for uninsured COVID care, which could cost hospitals and health systems between $14 billion and $41 billion, according to the Kaiser Family Foundation. Additional funds will need to be supplied to providers for the care they’ve provided. Additional relief from the federal government is likely necessary.

Even while payors were fully covering COVID testing costs and much of COVID care, waiving telemedicine cost-sharing, and expanding coverage of mental health services, payor margins and medical loss ratios indicated strong financial performance because so many consumers delayed or went without care. Depending on the plan and state, declining medical loss ratios may mean policyholders see larger than average rebates in the coming year. One would expect the pent-up demand for services would eventually result in excess demand following the pandemic, balancing out some of the medical spend from payors. But that will likely depend on unemployment and the economy. Individuals and families who lose health insurance or are only given a high deductible option may be slower to return to care.


Contributors

Roger A. Ray. MD
Chief Physician Executive
[email protected]

Alexandra Schumm
Principal, Vice President of Research
[email protected]

Abigail Arnold
Research Manager
[email protected]


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Chartis Top Reads - Week of October 11 - 17, 2020 - The Chartis Group