Chartis Top Reads – Week of September 20-26, 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 Preparedness, Quality & Risk

The Buzz This Week

As we move into fall, our third season with COVID-19, we can expect new challenges as we continue to battle this insidious virus. Many schools have reopened, and some will likely have to close (or have already) as relaxed distancing results in concentrated outbreaks. New hot spots will emerge as people return to traditional workplaces, utilizing public transportation, office buildings and elevators — spaces in which virus transfer is more likely. With the upcoming presidential election and ongoing protests across the country, community crowds could contribute to further spread of COVID-19. Finally, flu season will complicate diagnosis and treatment of patients with one or both viruses.

In many ways, we are better prepared than we were in the spring and summer. Physicians and hospital staff have discovered ways to reduce mortality and improve outcomes for COVID-19 patients, such as proning and delaying ventilator use. Many health systems have built up supplies, such as masks and testing swabs, and are developing more standardized protocols to prepare staff for another surge. Hospitals have created separate spaces for COVID-19 patients, enhancing their ability to reopen services to the general population while simultaneously treating virus patients.

However, we still face many hurdles. We just passed 200,000 deaths from COVID-19 in the U.S., and yet the resounding response seems to be more statistical than human. The long-term nature of this pandemic has led to “virus fatigue.” The results have been a desensitization to the devastating impact of the virus and a reduced level of perceived risk, causing some to relax or abandon adherence to safety measures. Despite efforts in building a stockpile of supplies, we still lack sufficient and effective personal protective equipment (PPE) in healthcare settings and otherwise, and medication commonly used in intensive care units (ICU) is running low, as is the supply of testing reagents. In some areas, outdated practice guidelines are reducing the ability for advanced practice clinicians to take on certain care roles that would reduce the burden on physicians.

Why It Matters

Our national health system was caught horribly unprepared when COVID-19 arrived, resulting in immense chaos in the spring. The experience for healthcare providers was described as “baptism by fire” by Dr. Donald Landry, physician in chief at New York-Presbyterian/Columbia University Irving Medical Center. The medical director of emergency preparedness for Minneapolis-based Hennepin Healthcare, Dr. John Hick, commented on hospitals’ severely limited ability to combat COVID-19: “You’re looking at a private-sector entity that suddenly has to take on the world’s largest public-sector response …. They’re not prepared for it because there’s no incentive to do that.”

Healthcare providers have scrambled to make it through the next 24 hours, few days, or week, but that approach is not sustainable — for patients, clinicians, or hospital operations. We are not reacting to a short-term event like a natural disaster or mass casualty event, for which many hospitals are appropriately prepared and trained. This is a marathon, for which we need longer-term solutions that can be sustained through this pandemic and help us tackle future public health crises. While difficult, there are a number of actions we need to take, including:

  • Re-examine our country’s supply chain, including production and distribution
  • Increase cross-training to have more flexibility in staffing models
  • Bridge gaps between healthcare providers, health insurance companies, the government, public health agencies, and policymakers
  • Determine the best model for preparedness based on lessons learned here in the U.S. and around the globe, then shift funds, resources and/or incentives to build a system that follows that model.

Digital and Advanced Technology

The Buzz This Week

After seven months of COVID-19 raging around the globe, we are living in a radically changed environment. We likely won’t go back to the world as we knew it for a long time, or perhaps ever. Based on surveys and comments from employers in many sectors, the number of remote workers will remain higher than before COVID-19 arrived. For those returning to an in-person work or school environment, protocols will change to incorporate regular testing, sanitation, and personal protection, including spacing and alternate workflows or routines.

These types of changes are challenging, but they present opportunities for digital solutions that can reduce human-to-human contact and make operating requirements in our new world more efficient and effective. Large healthcare providers, payors, and retailers and smaller start-ups are developing tech-based approaches to screening, testing, and personal health monitoring, as well human resource and general management tools to aid in communication and employee support.

Why It Matters

As digital solutions are developed, tested, and commercialized, employers, payors, and providers can garner value from early adoption. They also have an opportunity to partner with technology companies seeking employee or patient populations on which to test new tools and applications. While these partnerships can be valuable, their terms need to be mutually beneficial. For example, a health system’s ability to pilot a new technology in exchange for providing a tech start-up with large amounts of clinical data is not necessarily an equitable arrangement for the provider or the patients, should that tech company use the results to commercialize the product and claim all future revenue.

Healthcare has been going through a digital transformation for years and has accelerated in reaction to the pandemic. Digital health solutions are now prominent enough to warrant the creation of a new center within the Food and Drug Administration (FDA), the Digital Health Center of Excellence, which was announced Monday. FDA Commissioner Dr. Stephen M. Hahn stated that the center will “provide centralized expertise and serve as a resource for digital health technologies and policy for digital health innovators, the public, and FDA staff.” This translates into potential support for collaborations and partnerships between tech companies, payors, providers, and government entities. It also will be a source of new regulatory policy. While it will provide much-needed regulation in our transforming healthcare ecosystem, it also will bring hurdles in the process of introducing and disseminating (selling) new health technologies.

Financial Sustainability

The Buzz This Week

The death of U.S. Supreme Court Justice Ruth Bader Ginsburg late last week brought the future of the U.S. health insurance system, a topic that has been discussed and debated for years, back to the forefront. Many are questioning the impact the upcoming political elections and potential changes to the Supreme Court may have on the insurance system. Though many health policy experts deem it unlikely, a more conservative court could possibly dismantle the Affordable Care Act as soon as November. Regardless of political outcomes, the pandemic has ravaged hospitals financially and called into question the current reimbursement system. Some of the alternative options proposed include “Medicare for All,” capitated payment models, and repeal of health insurers’ immunity from antitrust enforcement, though each comes with their own unique set of considerations.

Why It Matters

While it is difficult to predict the future health insurance model, given the dynamic political landscape, it is certain that physician practices, hospitals, and health systems have a difficult road to financial recovery due to the impact of COVID-19. Many providers are seeing a change in payor mix as unemployment rises and commercial health insurance declines, leading to a negative net revenue impact and an increase in bad debt. Additionally, many patients have delayed care and are now sicker — requiring more intensive and expensive treatment. Delayed preventive care hurts providers in at-risk contracts and has the potential to alter insurance contracts as risk pools change. Providers are also contending with added costs to safely care for both COVID-19 and non-COVID patients, including increased testing and care costs, and new processes and layouts to ensure social distancing. While the government provided some emergency funding via the CARES Act and temporary reimbursement increases through Medicare and Medicaid programs, the continuation of those funds is not guaranteed, and they do not adequately cover the ongoing shortfall providers are experiencing. In the midst of uncertainty around policy and payment changes, it is imperative that providers focus on the elements of margin recovery they can control, including actively managing operating costs in line with volume recapture, restructuring fixed costs, realigning operations (including optimizing the revenue cycle and improving access and efficiency), and looking for diversified revenue opportunities.


Contributors

Roger A. Ray. MD
Physician Consulting Director
[email protected]

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

Abigail Arnold
Research Manager
[email protected]


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Week 2
Week 1

AUGUST 2020
Week 4

Chartis Top Reads - Week of September 20-26, 2020 - The Chartis Group