The COVID-19 pandemic has disrupted almost all aspects of life for the average American. It’s done the same for the American healthcare industry. The way we think about preventative health, emergency preparedness, and innovation in healthcare has all been upended. What changes already underway are going to stick? What changes are still to come? Will the Social Determinants of Health be universally recognized for what they are: Determinative? The Times are very uncertain. Nonetheless, Advis has identified three distinct areas where American healthcare can safely anticipate major change post-pandemic.
The growth in telehealth has been astounding. The growth in the demand for telehealth has been huge. As a result, the telehealth industry has been advanced a decade into the future overnight. Numerous innovations in how telehealth/telemedicine is administered and billed both now and in the future are underway. Telehealth reimbursements are already increasingly approved by insurers as a result of new HHS regulations and industry partnerships. Healthcare practices are quickly adopting new telehealth policies to better assist patients attending appointments. Telemedicine has grown exponentially and is poised for continued quick growth. In the near future, due to telehealth’s ability to help providers deliver high-quality healthcare at lower cost, expect it to keep growing. There will be widespread support to make permanent the sweeping regulatory changes that brought about this telehealth revolution.
Hand-in hand with expanding Telehealth services comes increasing demand for new IT services. Fast Healthcare Interoperability Resources (health IT structures that are able to capture health data regardless of source/format and make it reachable across the care continuum) are projected to increasingly gain traction among health vendors. In addition to delivering care remotely via telehealth, health systems are in the process of acquiring programs which both manage and analyze operational and patient data in order to better guide policies, track performance and outcomes, and provide greater efficiency. Artificial intelligence and machine learning technology will increasingly manage the more “mundane” aspects of healthcare so that providers will have more time to spend with patients. These developments may seem like wishful thinking, but the COVID-19 pandemic has highlighted the industry’s need for this technology and tech companies are working hard to fill the gap.
However, the path to widespread implementation of telehealth and new health IT will not be easily traversed. A number of privacy concerns regarding the use of existing and potential communications platforms persist. Additionally, poor implementation of multiple telehealth services would generate huge data flows that are neither useful nor easily maintained. There are also barriers to the widespread utilization of telehealth due to past practices and federal regulations. Be that as it may, the push for widespread telehealth coverage has galvanized the healthcare and tech industries to rethink their IT possibilities.
The second major change that the healthcare industry will undergo is in financial planning. Health systems’ existing financial models for 2020 have been demolished due to both the increased need for emergency department and intensive care beds, and elective surgeries that have been postponed or cancelled entirely. Many small hospitals and practices in underserved communities are experiencing heavy financial losses; as a result of the pandemic, they will either close or merge with larger health systems.
Another likely driver of uncertain financial planning will be the role of labor costs. The healthcare workforce is quickly changing as a result of the huge strain placed on providers and the entire healthcare system at every level due to the COVID-19 pandemic. Expect retirements and fewer new entrants to the job market all contributing to possible staffing shortages. Moreover, having successfully staffed the front lines in the fight against COVID-19, the bargaining power of healthcare workers will be at an all-time high. The entire system is crying out for renegotiation. It will be no different for the workforce.
Contributing to the rising costs of labor will be workers seeking behavioral health treatment both during and after the pandemic. Health systems will need to develop and implement strategies to identify and treat mental health concerns in their employees to avoid severe burnout, post-traumatic stress, depression, and suicide risks. After the pandemic slows down, health systems and other social service businesses will need to modernize their workforce models to adjust for the influx of medical/nursing students and retired doctors who were brought in as a result of the pandemic.
After the pandemic slows, there’s a chance that a small number of healthcare systems move toward capitation or other value-based care plans in order to protect themselves from future financial uncertainty and instability. These payment plans would allow providers to focus on providing the most efficient and effective care rather than on how much they are being reimbursed. But at the rate healthcare systems are currently hemorrhaging revenue, it seems more likely that the industry may need to return to the fee-for-service system rather than experiment with value-based care (as VBC has a higher financial risk they simply will not be able to afford). Proposed IPPS Payment updates are likely to bolster this trend.
Similarly, post-pandemic, federal and state governments are likely to play a larger role in the provision of healthcare. Considering that federal support from the CARES Act and other stimuli are helping keep many hospitals open, that the government would have more bargaining power with the healthcare industry post-pandemic seems reasonable. This leverage may be seen in new regulation ranging from the Feds seeking mandatory PPE stockpiles and strict regulations on the discharge and transfer of SNF patients to a renewed push at minimum staffing ratios at the State level.
There will be a loud but unsuccessful movement for the passage of some form of Medicare For All (M4A). 27.5 million Americans do not currently have health insurance. 45% of uninsured adults say the high cost of coverage is the main reason they remain uninsured. In the Senate and House Medicare for All Bills, M4A would have comprehensive benefits, no premiums, lifetime enrollment, be financed by taxes, replace all private health insurance (including the current Medicare program); and all state-licensed, certified providers who meet eligible standards can apply. As a result, M4A is an attractive option to people who are currently struggling to afford or access healthcare due to the COVID-19 pandemic. M4A supporters also argue that a single-payer healthcare program would be less expensive for the healthcare system overall. And because of the vast sums flowing from the Feds through the existing system, aren’t we there by default? People will be asking, “Why pay the equivalent of M4A and not receive the benefits?”
Medicare For All has been stalled in Congress for months, but an increasing number of interest groups and elected officials are calling for these bills to be revisited. Nonetheless, the chance that M4A will be passed within the year is highly unlikely: several political and economic considerations involved in a single-payer system remain hotly contested; and, it’s an election year. For example, arguments have been made that the COVID-19 pandemic has been “as bad” or worse in countries with socialized/single-payer healthcare compared to the United States. Medicare For All currently has 50.9% Democratic support in the House, and 29.8% Democratic support in the Senate. A significant push toward a new system will have to come from below, from the grassroots, if M4A is ever to become a reality in America. What seems more likely in the near term is wide-spread support to fix what ails our system through focus on the social determinants of health.
Social Determinants of Health (SDOH)
The pandemic has made clear to everyone that our current levels of inequality are a danger to our national health and security. And the health of those on the bottom is especially at risk. The status quo is simply unacceptable. Even before the pandemic, public health experts were emphasizing that the efficacy of recovery efforts long-term hinges on how leaders address health inequities and the systemic issues that cause them. Simply put, at-risk communities and at-risk populations have experienced a disproportionate impact from the COVID-19 pandemic. For example, a recent report from the Centers for Disease Control and Prevention tracking COVID-19 activity in 14 states found African Americans made up 33% of hospitalized coronavirus cases, despite accounting for only 18% of the total population in those areas. Although healthcare systems, payers, and HHS had been working to expand SDOH benefits long before the COVID-19 pandemic, there needs to be continued discussion on how providers and regulators can make structural changes to the health system to improve the healthcare safety net, as well federal, state, and local governments. Big business will play a significant role, too.
As of January, certain Medicare Advantage (MA) plans have expanded coverage of supplemental benefits that address SDOH (such as Anthem BCBS and Humana). Examples of these benefits include home-based palliative care, home modifications for people with disabilities, diabetes education, and non-emergency medical transportation. Relatively few MA plan providers opted to provide enrollees with new SDOH supplemental benefits in 2019, but this number could increase in 2020 due to the increase of SDOH risk factors as a result of COVID-19 and the potential profitability of adding SDOH supplemental benefits. Humana’s revenues increased nearly 18.9% in the first quarter of 2020 thanks to more seniors choosing Humana’s private MA plans.
CMS recently announced a 1.66% rate increase for Medicare Advantage plans in 2021, and issued its Contract Year 2021 Medicare Advantage and Part D Final Rule. This Final Rule focuses on finalizing prior proposals addressing COVID-19, and those proposals most helpful to MA and Part D plans in light of the June bidding deadline. Any proposals not addressed in this Final Rule will be addressed in a second Final Rule and will become applicable no earlier than January 1, 2022.
Furthermore, Healthcare systems have already been working independently to address SDOH risk factors in their target populations. As of March 2020, well over half of all health systems screened patients for SDOH risk factors. Many of these health systems are also piloting programs to tackle certain SDOH risk factors such as housing instability, food insecurity, and lack of transportation. Examples of pilot programs include adult daycare services, nutrition education, non-emergency medical transportation, health resource centers, and embedded inpatient and post-discharge patient support services. Healthcare systems are also partnering with community organizations and payers to mitigate SDOH disparities.
On the legislative end, several bills have been introduced that focus on addressing SDOH. H.R. 6561 (Improving Social Determinants of Health Act of 2020) would authorize the CDC to create and implement a SDOH program. S. 2896 (Social Determinants Accelerator Act) would authorize $25 million in Medicaid grants to state governments, and also task CMS, HHS, and other federal agencies with conducting community-based health programs to address SDOH. Both bills are currently stalled in committee.
Collaboration between all stakeholders in the American healthcare system is essential to surviving COVID-19 and thriving in the aftermath of the pandemic. From pharmaceutical companies sharing proprietary compound libraries to financial reform of public health programs, new healthcare practices and cross-industry partnerships will have to be formed. For better or worse, those new programs and partnerships will shape our healthcare landscape for years to come. Telehealth is becoming the new standard practice rather than the exception to the rule. New IT is on the way. Health systems, payers, and the federal government, even big business, are all reassessing how healthcare should be paid for and who all should be covered. The Social Determinants of Health must become a priority rather than an afterthought. The workforce will press it’s demands for appropriate levels of PPE and compensation. The system cannot simply reconstitute itself as it was. 2021 will be a year of significant change.
Advis is available and ready to guide your organization through these changes. Please contact us for further assistance, 708-478-7030.