April 28, 2020

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April 28, 2020: For this week’s Tuesday Newsday segment we are running down the most important articles about the implications of the coronavirus crisis on the healthcare industry. While we are still in the midst of the pandemic, everyone in this field, as with others, should be thinking about what their next steps will be in the period that comes after. Bill looks through the article by Recon Strategy titled ‘The day after’ and discusses the implications for the sectors of healthcare in the longer term. From there, we move on to ‘After the Surge’ from Chartis Group and Bill walks through the results and the five imperatives they spell out. A key takeaway from that article is the three stages of crisis response: Reaction, stabilization, and re-imagination, an idea that we at the podcast support whole-heartedly! Next, we turn to a post by Atrium Health about the measures they are taking across their locations to be more COVID-safe and Bill weighs up the efficacy of these before diving into the last article from Fast Company. In it, they get a host of perspectives from an array of industry leaders beyond healthcare. We look at the aptest and Bill zeroes in on the topics of remote work, education in virtual spaces, and digital migration. We finish with some thoughts on what this pandemic might mean to small-business that have traditionally run out of brick and mortar premises and imagine how a transition can be made successfully into a new world. 

Key Points From This Episode:

  • Recon Strategy’s article on the implications for different sectors of healthcare.
  • Uncertainty in the short and long term for hospitals as a result of the coronavirus.
  • Chartis Group’s article, ‘After the Surge’ and the results of the crisis that they list.
  • The five imperatives from the Chartis Group article; recapturing demand, reducing costs and more.
  • Reacting, stabilizing and reimagining; the three phases of crisis response.
  • The COVID-safe measures that have been taken by Atrium Health across all locations. 
  • Marketing and management aspects of healthcare that all systems should be thinking about now! 
  • Fast Company’s list of the things that COVID-19 will change forever.
  • Remote work, digital migration and virtual education after the pandemic.
  • How quantum computing might help us prevent and prepare for another pandemic. 
  • The implications of the coronavirus for small businesses and entrepreneurs.

News Day – Industry Implications of COVID-19

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News Day – Industry Implications of COVID-19

Episode 236: Transcript – April 28, 2020

This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.

[0:00:04.5] DM: Welcome to This Week in Health IT, it’s Tuesday news day, where we look at the news which will impact health IT. Today, you’re going to get to help me with my homework, we have a live, YouTube live session today for This Week in Health IT, it’s our first one, it’s at noon Eastern Time, 9 AM Pacific and it’s going to be with Drex DeFord, Sue Schade, David Muntz and myself and we’re going to talk about what’s next in healthcare. And as part of that, I’m doing homework, I’m looking at stories like The Day After: Implications for Hospitals and Payers. After the Surge: Five Health System Imperatives, we take a look at money that’s available for telehealth and some other stuff that is going on so I’m going to share some of those stories.

 

It’s just part of my homework that I’m doing for the show that we are going to do later this morning. Make sure you mark it on your calendar, make sure you show up, I’m looking forward to fielding your questions. My name is Bill Russell, healthcare CIO, coach and creator of This Week in Health IT, a set of podcasts, videos and collaboration events dedicated to developing the next generation of health leaders.

 

This episode and every episode since we started the COVID-19 series have been sponsored by Sirius Healthcare, they reached out to me to see how we might partner during this time and that is how we’ve been able to support producing daily shows. Special thanks to Sirius for supporting the show’s effort during the crisis.

 

[INTERVIEW]

 

[0:01:21.0] BR: Okay, Tuesday news day, I actually have 15 stories,  I’ve read a bunch of stuff in preparation for tomorrow, I will not get through all of them, I will only get through about 20 minutes of them, so we will see what happens, let’s just get right to it. 

 

One of the first things I did in preparing for tomorrow was to see who was talking about what’s next in healthcare? The consulting firms are talking about what’s next in healthcare which makes sense, they’re trying to get out ahead of it, they are pulling their collective thinking and thought processes together to try to determine who — what are going to be the implications across the healthcare sector. One of the better ones, one of the things that – one of the ones that I really got a lot out of was from a company called Recon Strategy which I’ve never heard of.

 

It’s a blog article that talks about the day-after implications for COVID-19 on the industry and they have the sector impacts and averages and things to that effect. They go through 12 sub-sectors, hospital payers, surgery centers, bio-pharma, device and equipment diagnostics, pharmacy, telehealth, remote monitoring, digital health, public health and community providers. They have a really easy to understand chart in there, up and down arrows, side to side arrows, number of arrows indicates who is benefiting in the short term and who will benefit in the long term as a result of this. Obviously, this is forward thinking, everyone will preface this by saying, the most important thing is for the safety of the communities that we serve.

 

[0:03:00.4] BR: But, in an effort to try to figure out what’s going to happen next, these guys’ articles are invaluable. What are they saying about the hospital sectors? Let me give you a little take on that. Hospitals. “The postponement of electives procedures will wreak havoc on hospital income statements and cash flow positions especially when you consider these in light of the high costs as they deal with ramping up staffing and infrastructure to deal with COVID and their typically razor thin margins in short term, survival of many will depend on how much they are paid by commercial and government payers for COVID care or what they can get from a bail out.” 

 

“In the long term, even assuming policy makers, payers particularly CMS and the public are much more willing to invest in supporting hospitals after their heroic response to the crisis, there’s a lot of uncertainty on how that would translate in the real world with our mix of for profit, not for profit and public facilities. There may be some future upside for their ability to do and acquire struggling independence but they may not – that may not be enough.” No wonder when you look at the stock market, it has pummeled HCA and Tenant.” And they go on to talk a little bit more about that. They’re painting a picture that in the short term, this is bad for hospitals, in the long term, it’s also not good for hospitals.

 

We know that’s true for health systems that had poor balance sheets going into this. You know, cash flow was significantly impacted, they’re hoping that the government bails them out, much like they did the banks during the financial crisis of 2008 and we will see how that pans out or if that pans out, should be pretty interesting.

 

[0:04:49.8] BR: Anyway, there’s going to be tight financially for the hospitals. Payers are sort of mixed in this thing, you know, they talk about the upside is, you know, they have a lot of covered lives, therefore, they’re receiving payments but there’s a whole bunch of exposure on the COVID side for people that normally would not, especially on the medicare advantage side that normally would not have taken that many dollars.

 

You know, they’re saying that payer’s short term, long term is – are going to see some upside. Quite frankly, I think they’re missing the boat a little bit on the long term, I think the long term, the payers come out of this really well-positioned. I think they can buy up, some – the medical groups because the individual medical group practices have been just pummeled by this.

 

There’s an opportunity to buy them up, there’s an opportunity for good medical groups that have good practices prior to this to position themselves to be bought by payers and by hospitals with good balance sheets. Okay, surgery centers, surgery centers is interesting to me, you know, ambulatory surgery centers are severely impacted, obviously we’ve taken away elective surgeries but they make the case that it’s probably going to be one of the quickest things to rebound because that demand has just been pushed back and then they’re  just going to have a bounce as soon as we get there.

 

Plus there’s going to be this push away from hospitals per se, for fear that they are incubators for germs and disease and that these ambulatory surgery centers are just a better options, safer option for the public. They go on to talk about bio pharma and devices, diagnostics, not impacted all that much.

 

[0:06:47.0] BR: Devices and equipment, short term impacted, long term neutral, bio pharma, neutral short term, upside, in the long term, telehealth, huge upside right now, we’ve done a couple of episodes on this that I’ve recorded and I will be releasing here shortly. It has three up arrows which is the most of anything.

 

There’s no other thing with up arrows or three down arrows for that matter. Telehealth has just gone into a different category with COVID as we know from the interviews that we’ve been doing. They believe that we’re going to sustain a lot of that gain. They have two up arrows in the long term which would indicate that they believe that the payers both  the public and private payers are going to continue to fund it. Remote monitoring is in that same vein and also has not as much upside upfront and long term but is on that same collide path, if you will. 

 

Digital health is really neutral right now and has some upside going forward because we have really introduced a lot of digital tools, chatbots and other things into this. I think the appetite for digital tools is going to continue. I mean, they’re saying the same thing and so I think long term, we’re going to see a lot of digital health opportunities. It remains to be seen where they will be admitted. And then they talk about public health and community providers. I’m not going to go into that as much and again, great thinking, Recon Strategy, blog article, what’s the name of it, The day after: Implications for hospitals, payers, biotech and more. Recon Strategy.

 

[0:08:36.8] BR: All right, the next one we look at is Chartis Group, I like the people at Chartis Group. I think they’re good thinkers and they have an article now, it’s behind an email paywall so you have to give them your email address, not the worst thing in the world, they have a lot of good materials that they put out. Their thing is called “After the Surge, Five Health System Imperatives.”

 

I’ll get to the imperatives in a minute but they have, “COVID-19 has fundamentally changed the care delivery landscape,” and so what they have is 1,2,3,4,5,6,7. They have seven things that they think need to be addressed. The first is, – or that have happened as a result of COVID. Dual systems of care for COVID-19 and non-COVID-19 patients. Now we know that that’s going on now and in fact, I’m going to share the next story I share with you is going to be about that and that will likely have to continue for some period of time. “Consumers’ fear,” the second one, “Consumers fear of infection causing delays or foregoing of care,” that’s a risk, “a deteriorated patients, financial profiles,” we know that that’s happening. The number of unemployed approaching 20% across the US. 

 

“Reduced overall market size for the foreseeable future,” that’s a risk to health systems. “Evolved clinical care delivery models including virtual care and care at home.” This is something that we have seen – I mean, we’ve been talking about this, I’ve talked to a couple of people now and we’ve been talking about this for decades or at least over a decade.

 

It’s amazing how much of that just came to an existence over the last two months as a result of the pandemic. It’s like we knew what to do, we had the capacities, we had the technology and it was just a matter of reducing the regulatory barriers, implementing some pay models that worked and those things happened.

 

[0:10:32.1] BR: “Evolved clinical care delivery models including virtual care and care at home.” Okay, the next one, “Shifting health system economics and changing sources of margin”. Okay, we don’t know how this is going to play out but likely, there’s going to be a change in payment models, there’s going to be a change in how we deliver care and how we think about delivering care and the final one is, “Worse community health status.”

 

One of the results of COVID-19 is that you know, a fair number of people have been infected and it has worsened the overall community health status across the board. What are the five imperatives? The five imperatives coming out of this are going to be number one, to recapture demand, right? The demand was at a certain level pre-COVID and that has dropped significantly, I mean, dramatically actually. Then the question becomes, how much of that can actually be recaptured and what are your strategies for recapturing demand?

 

Again, I really like their thinking on this, the second one, “Fundamentally reduced the cost base for care.” We now have introduced a lot of digital tools, we’ve introduced a lot of different ways of caring for people. Quite frankly that are less expensive, less touch points, less travel, a lot of things to that effect. Fundamentally reducing the cost bases for care. The third one is restructure the physician enterprise.

 

I would probably step further and say rebuild the physician enterprise. I mean, the – if any area of health care has been impacted the most by this, it has to be the physician practice and the physician networks that existed within your community. You know, especially the independent ones, they did not have the resources to – or the where with all, they had to lay off of a fair number of people, or furlough of fair number of people. Now, again, the demand should come back but a lot of these organizations are really struggling.

 

[0:12:39.7] BR: We have to – they say restructure, I will say rebuild the physician enterprise. Number four, transform the clinical operating model. This is the thing that I’ve been talking to my clients about and it is something that a conversation I had with somebody last week. Gave me that, you know, when you go through a crisis, you end up with three phases, really, you react, then you stabilize and then you reimagine.

 

I love that framework and I love that thinking and I thank Frank for giving it to me but the reality of what’s going to happen, hopefully what’s going to happen out of this is we reacted really well. Health IT reacted very well.  We then are stabilizing the environments. A lot of the questions that I am getting from people right now are, “Okay, we did all of these things sort of at a makeshift fashion, how do we make these into more permanent solutions?” And the coaching I am giving people is to reimagine before you put those solutions into a concrete, before you pour the concrete and set them into concrete reimagine what is possible that clinical operating model could change, should change. 

 

Especially if he reimbursements models even remotely look like what they look like today and finally, partner with purpose. There is going to be a lot of opportunities for partnerships. I have said, last week I said there is going to be an awful lot of M and A activity coming out of this. M and A activity, if there are strong balance sheets, if they are not strong balance sheets. There is going to opportunities for people to evaluate partnerships that might make sense that maybe didn’t make sense four months ago. 

 

All right, onto the next story and again, I like that thinking if you are up for the paywall just go over to the – go ahead over to the Chartis Group website. You could see that. I wanted to share this because I think it is also an imperative. So “Atrium Health Unveils “COVID-Safe” Care Across All Locations”. Okay, so this is one of those things that if your health system isn’t doing this today, it is problematic. I would say almost you know it is something that you probably should have been thinking about 30 days ago. And something you should be doing right around now. 

 

And I have talked to a bunch of forward thinking health systems that weren’t ready to talk about this on the show but they were talking about the work that they are doing around this. So Atrium Health, Charlotte, North Carolina. “Atrium Health will be the first health system in the region to expand the delivery of care services starting the week of April 27th. This move comes after Atrium Health carefully evaluated the CDC’s recommendations while also consulting with national medical experts and government leaders across the state in the country as Atrium Health expands its services, it is adding extensive safety measures and initiatives to provide peace of mind to patients by establishing COVID-safe care standards for all of its locations.” 

 

And then it just goes on and Eugene Woods has a quote here and so forth. I am going to tell you what they have done. So, “Atrium Health’s COVID-safe care standards build on a steep clinical expertise to contain the coronavirus disease and ensure the safest environment possible at each location. Our COVID-safe care standards include, number one, initiating testing for all patients for COVID-19 prior to any scheduled procedures to preserve a COVID-safe care environment and ensure safety of patients in care teams.” That is number one. 

 

Number two, “Achieving the fastest COVID-19 testing results possible, up to three days faster than any local provider as one of the only systems in the nation with rapid testing capabilities in house.” I think it is a little bit of hyperbole but with that being said that’s number two, achieving fastest COVID-19 testing results possible. Number three, “Establishing dedicated facilities, care units and clinical teams for exclusive treatment of non-COVID patients in the safest environment, okay? 

 

So they are creating essentially a bubble that when you walk into that bubble you know that your care providers and all the other patients it is a COVID-free environment to receive care that’s three. Number four, “Deploying the first of its kind COVID-19 virtual hospital, which allows COVID patients to receive care in the comfort of their own home, again smart and it gives you a little glimpse of how people are thinking of this COVID, non-COVID environment. 

 

[0:17:28.2] But also utilizing the digital tools that are available and this could be what an emerging model looks like coming out of this. And then finally, “Leading all regional systems with twice as many physicians, over 900 care locations and largest hospital bed capacity in the region.” That is absolutely a marketing bullet point. I am not sure what that has to do with anything, to be honest with you but it is their last bullet point for how they do a COVID-safe environment. So clearly the marketing people had some say into what came out of that. 

 

All right, so that is what Atrium Health is doing. I think to a certain extent it is management malpractice if your health system is not thinking right now about how to do these. Your balance sheet is getting hit every day, this is exactly what you need to put in place, however you do that through partnerships, through — however you set up an environment like this, that you can move forward, by all means you should be doing it. 

 

Okay, I am going to be recording tomorrow actually. I am going to be recording, actually I am releasing this on Tuesday. So Tuesday afternoon, I am going to be recording a session with Sirius Heathcare, with Eli Tarlow, who is going to give us a lot of details on the millions available through COVID-19 telehealth program. To sort of whet your appetite around that there is a story I just receive in my inbox. It is that ChristianaCare has received $714,000 grant from the FCC. To support telehealth services during the COVID-19 pandemic. 

 

So the Care’s Act, the multiple faces of the Care Act has freed up about $200 million through the FCC. Only a handful of health systems have taken advantage of this to date, about 17 have taken advantaged. There is 200 million available and it is worth looking at. I actually hit the Sirius Healthcare website. They have published a blog article in it and it is worth the read and I will do an episode this afternoon. 

 

[0:19:29.9] I will record that. I will get that out to you so you can get some details on how you can get access to some of that money and how I wanted to close this is I want to look at how other people were thinking about the impact of COVID-19. So I went to a Fast Company article because they went out and look from 30 experts or leaders and they said, “All things COVID-19 will change forever according to the top 30 experts.” 

 

I am going to give you the things they said that will change and a little snippet from each one if I have enough time. So let me just check my time real quick, I don’t have time. I am going to do this really fast. Working from home becomes the new normal. I think we all know this. Matthew Prince, CEO of Cloud Flare, “The pandemic has resulted in what is effectively the largest work from home experiment ever conducted in human history. We are seeing the effect on the internet in terms of the traffic patterns that are shifting, people are accessing more, educational resources online for their kids, finding unconventional ways to connect with coworkers, friends and family and employers are being more flexible in how they respond to employee needs, through more dynamic cloud based technology. I think we’ll see these shifts last well beyond immediately and immediate fallout of COVID-19 outbreak.” 

 

I believe that’s true and I am hearing that same thing from CIOs within the health systems. “The Digital Migration Accelerates,” Michael Hendrix, partner in global design director from Ideo, “Right now the virus seems like an accelerator for digital change that was already underway. The surprise has been to see the resistance to the digital change, suddenly evaporate. What organizations resisted for a decade is now core to survival and innovation.” 

 

[0:21:15.1] “It is exciting because the digital mindset will persist and it is highly unlikely that companies will try to return to what worked prior to the pandemic.” The next one is “Education Goes Virtual.” My daughter is a freshman at Baylor and she is home taking courses and I will tell you one of the things, she is not saying this but one of the things I recognize is if they do – if some of these colleges if they don’t offer that campus experience I am not sure that the degree is that much different across these virtual settings. 

 

And I think a whole bunch of people just like everything else that is going on right now, a whole bunch of people is getting experience of what it is to take courses online. Now so it is very uneven, some of these teachers were not ready, some of the technology was not ready. Definitely the universities were not ready and you can’t offer – I have been saying Baylor because that is where my daughter goes but you can offer the Penn State or the Michigan or the USC experience remotely. 

 

You just can’t do it. You can’t go to the Saturday football game, you can’t have the study groups. You can’t have the whole experience that really takes you from a high school kid to ready to be an a functioning adult. So it is going to be interesting to see how much of this snaps back in the educational side but I think the thing that’s at risk for them is the number of people that are experiencing it right now, I think if nothing else I don’t know why I am talking about education. 

 

I should be talking about healthcare, but I think if nothing else, the in classroom experience will change dramatically. We will see more Zoom stuff. We will see more creativity, just as a result of the experiment that is going on. The next one to have is “Healthcare Confronts the Same Old Problems” and there is a whole bunch of self-serving comments in there. One of the ones I thought that was really exceptional, Peter Chapman, CEO and President of quantum computing company IonQ. 

 

[0:23:18.0] “Within the next 12 to 18 months we are expecting quantum computers to start to routinely solve problems that super computers and cloud computing cannot. When humanity faces the next pandemic, I am hopeful that quantum computer will be able to model the virus it’s interactions within the human body that will drive possible solutions and limit the future economic damage and human suffering.” I hope so as well. 

 

We have been talking about quantum computing for quite some time and there’s many things that scare me about quantum computing as excite me about quantum computing but this is one of the things that’s exciting. They also go on to talk about “Venture Capital Hunkers Down,” that a lot of companies that were burning cash, there is no cash for them anymore and a lot of them are trying to find ways out. “Transportation Rebounds and Evolves.” 

 

“Manufacturing Gets a Wakeup Call.” I think this is going to be one of biggest changes in America is the manufacturing and supply chain and then finally, “New Thinking Changes Old Businesses” and  as Will Lopez, HR platform Gusto, “COVID-19 isn’t the end of brick and mortar stores. They are vital to our communities and our economy but the way they operate will change. The crisis will force small businesses that have historically relied on foot traffic as their main source of income to develop alternative revenue streams. So that they can weather the next major event.” 

 

“For example, many restaurants might permanently link up with delivery service platforms or expand their geographic reach via ghost kitchens and more boutiques will develop an online presence that reaches beyond the local neighborhoods.” And I wanted to close with that because I love that thinking. I have talked to and I know a bunch of entrepreneurs that have done really incredible stuff. 

 

You know a coffee business, they provided coffee for events and those events weren’t happening anymore. They started roasting their own beans, selling their beans online. They started selling just a whole bunch of different things. I think that level of creativity I would love to see applied to healthcare. Instead of finding every way possible to go back to the way we were, I’d like us to reimagine what is possible with healthcare now that we have experienced something different. How much of it can we retain and how much can we move forward with new models?

 

[END OF DISCUSSION]

 

[0:25:44.8] BR: That is all for this week. Special thanks to our sponsors, VMware, StarBridge Advisors, Galen Healthcare, Health Lyrics, Pro Talent Advisors and Sirius Healthcare for choosing to invest in developing the next generation of health leaders. Don’t forget at noon today, Tuesday, we are going to be doing our first live show. Bring your questions, what’s next in healthcare? If I didn’t cover it hear and you want to talk about something else or you have a question based on what I threw out here, bring it with you at noon. Love to talk about it. 

 

This show is a production of This Week in Health IT. For more great content, you can check out the website at thisweek Michael Hendrix

Ideo health.com or the YouTube channel. If you want to support the show, the best way to do that is to share with a peer. Send an email, let them know that you value what you’re getting out of the show. Email might be old school for you, however you do it, go ahead and do it that way. 

 

We’re going to be back again this afternoon and we’d be back in everyday with interviews for the foreseeable future, until we get through this together. Thanks for listening. That is all for now.

 

[END]

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