June 10, 2020

The sands of the Sahara are constantly moving.  Visitors can view the sea of dry dunes rolling and morphing over short periods of time.  The wind is the primary catalyst in this process, taking advantage of the relative weightlessness of the individual grains of sand.

The winds of change are causing a shift in the American healthcare industry these days, as well.  While there were already movers and drivers toward a change in healthcare delivery, there’s nothing like a once-in-a-century health crisis to create the conditions for accelerated change.  Over the last couple of decades, we’ve seen the introduction of the pay for performance doctrine, and its real-world implementation via the various Medicare incentive programs and alternate payment models.  We’ve seen the effects of the Affordable Care Act; and, in the last couple of years, we saw the first big moves toward telehealth.  So, we have witnessed significant shifts in policy and practice over the last several years; but, with the advent of the nation-wide COVID crisis, change is now coming at a more rapid rate.

Healthcare Employment

One source is reporting a mixed bag as it concerns the fast-moving shifts in employment numbers within the healthcare sector.  While some entities are quickly adding staff, others are still seeing a suppressed workforce—including hospitals.  HealthcareDive has provided the following takeaways on the current employment situation:

• Healthcare employment increased by 312,000 in May, led by gains in offices of dentists, with a 245,000 jump. Offices of other health practitioners added 73,000 jobs and physician offices added 51,000, according to the U.S. Bureau of Labor Statistics (BLS) jobs report published this past Friday.
• Hospitals were left out of these gains, losing 27,000 jobs last month. Nursing and residential care facilities also saw a continued downswing with 37,000 jobs lost.
• The unemployment rate overall dropped from a record 14.7% in April to 13.3% in May, improvements reflecting limited resumption of economic activity curtailed in March and April due to the COVID-19 pandemic and efforts to contain it.

To put all this in perspective, healthcare lost 43,000 jobs in March and a whopping 1.4 million jobs in April.  So, there has been a positive shift based on the May numbers provided by the BLS.  Nevertheless, the industry still faces losses, according to Rebecca Pifer, reporting for HealthcareDive, who noted that “hospitals lost 27,000 jobs in May after losing nearly 135,000 in April.”

So, just as quickly as the sands of unemployment formed a massive dune on the healthcare landscape, that dune is quickly being reshaped, signaling a partial return to employment—at least for some.

Telehealth Boom

While telehealth had been receiving a gentle push from certain sectors over the last few years, the pandemic caused telehealth to be practically shoved onto the American caregiver and patient.  A Gallup poll revealed that the use of telehealth went from 12 percent to 27 percent from mid-March to mid-May.  This more than doubling of the utilization of this kind of care suggests that Americans are not reluctant to use technology in place of a personal visit.  Think of the benefits:

• No wasting time in transit.
• No sitting in a room with other sick people.
• No waiting an extra 30 minutes past your appointment time to see the practitioner.

The generations that grew up on smart phones and tablets are going to have little qualms about continuing to utilize the virtual care model well past the end of the pandemic.  This is how they conduct their lives to a large extent already: virtual banking, social media, online shopping.  Telehealth will simply be another addition to a familiar frame of reference.

Of course, telehealth cannot be used for all patient conditions in the clinic setting, and it remains to be seen the extent to which telehealth will prove useful in the hospital environment.  Some hospital providers may want to use these services in place of in-person rounds.  Some facilities may want to consider building an infrastructure to encourage the growth in telehealth, such as placing tablets in each patient room.  With the near certainty that the federal government will retain certain telehealth waivers, telehealth may be the wave of the future.

Lean Times for Hospitals

Hospital executives are acutely aware of the drop in high-acuity cases within their daily schedules during the course of the coronavirus event.  While many hospitals are in the midst of ramping up elective surgeries, there is some doubt as to when they will see a return to pre-COVID levels.  There are even those who are predicting a rather lengthy suppression of non-COVID patient populations within the hospital setting.  According to S&P Global Ratings, ramp-up to full caseloads will be a slow process that will continue into 2021.

Regarding patients who were once quick to access hospitals for emergency, orthopedic and other types of care, Dr. Mark Smith, former president of the California Health Care Foundation, said a switch has been flipped in the minds of consumers. “Overnight it seems we’ve gone from high-touch to no-touch.”  Kaiser Health News (KHN) is reporting that this reluctance to access hospital care in the wake of COVID is not likely to change overnight, even after the pandemic has wound down.  The news service writes:

Even more concerning is that hospitals’ ability to weather the current financial shock varies widely. Those most in danger of closing are in rural and underserved areas, where patients could wind up with even less access to care that is scarce already.

Writers for KHN believe this could lead to consolidation of facilities and medical groups, which would have the concomitant effect of driving up prices as these larger entities would have greater bargaining power with insurers.

While the full ramifications of the COVID pandemic upon the policies and practices of hospitals are not yet known, there is little doubt that the national health emergency has caused officials in both government and the healthcare sector to look at policies and processes a bit differently.  Improvements in care delivery efficiency is sure to follow.  As Gail Wilensky, a health economist who ran the Medicare and Medicaid programs in the early 1990s has said about this current period, “Health care is never going back to the way it was before.”  The sands of change roll on.

If we can be of assistance to you during this period of change and uncertainty, please reach out to us at info@miramedgs.com.  Our business is providing solutions for your business.