May 18, 2020

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May 19, 2020: We’re back with another Tuesday News Day! Our main focus this week is the idea of economic recovery after the pandemic and how this might play out in the healthcare sector. Our first piece of news we look at comes from The Economist and their article titled ‘Prognosis: mixed – The pandemic will recast America’s health-care industrial complex’, in which a number of high profile voices weigh in on what the world of healthcare might look like very soon. Bill then picks out some useful info from HFMA’s recent webinar on recovery, a must-read for anyone in a health system at this point. From there a few listener questions are fielded on priorities and departmental alignment, strategies moving forward and the second surge. Once again Bill advises a full reevaluation of ongoing projects and some thought to be given to the idea M&As! For all of this, listen in as we share what’s new in the world of health IT!  

Key Points From This Episode:

  • The possible recasting of the US healthcare industrial complex after the pandemic.
  • HFMA’s Modeling and Managing the COVID 19 Recovery webinar and the findings they share.
  • Prioritizing projects according to your health system at this moment in the crisis.
  • Alignment within organizations between different departments and leaders.
  • Integrating virtual care completely and restarting primary care in the wake of COVID-19.
  • Considering the likely second surge and taking this on as a project. 
  • The final consideration that should be given attention; mergers and acquisitions moving forward.
  • A complete executive reevaluation of the projects that were on-the-go at the start of the crisis.

News Day – Signs of Economic Recovery in Healthcare

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News Day – Signs of Economic Recovery in Healthcare

Episode 250: Transcript – May 19, 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] Welcome to This Week in Health IT. It’s Tuesday Newsday where we look at the news which will impact health IT. Today, we’re going to look at where we’re at on the recovery and will the pandemic recast America’s healthcare complex. That’s the title from an Economist story that just ran last week. We start to answer your questions which I received by email on the air for the first time. 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. It is their commitment to making this content available that is made the daily episodes possible. Special thanks to Sirius for supporting the show’s efforts during the crisis. 

[0:00:51.8] A little expectation setting. We didn’t drop a show on Monday, not because we didn’t have one but because of a request from a guest, we’re going to continue to do daily shows through June and see where that takes us. I’ve reached out to 20 CIOs over the weekend and we start hearing back this morning, in fact, I recorded one of those shows this afternoon and look forward to airing that with Cris Ross from Mayo Clinic. We’ve been attempting to stay ahead of each phase of the pandemic story in order to inform health systems as they take the next steps. 

We started with a series on prep as you remember and then we move to solutions and then to field reports. Talking with the people on the frontlines about how they were addressing the pandemic. Recently, we started to hold conversations on immerging from the pandemic and the topics are going to include things like setting priorities, opening safely, second surge planning and t he future of work at  home, telehealth, handling the financial challenge that we’re stepping into.

We’ve done about 51 episodes in nine weeks. Our hope is that this work can continue to inform current plans and act as a time capsule, if you will, for our thinking as we walk through these extraordinary events with as little fanfare as I can possibly muster. But to keep me out of dog cast with my marketing team. I need to tell you a couple of things. One is we’ve exceeded 250 episodes and we have over 200,000 downloads of the podcast to date since we started the show. In the podcast world, they tell you that you are to make a really big deal of your milestones. There it is, me making a really big deal of those milestones. 

We’ve come a long way from our first episode and the 28 downloads that it received, three of which were from my family and we are off to the races. For our sponsors and you know, I just want to thank them, I cherish your support, VMware, Galen Healthcare, StarBridge Advisors, Sirius Healthcare and Pro Talent Advisors. I am truly thankful that you provide the support to develop the next generation of health leaders.

If you are wondering what we are doing with the money, some people have asked me. We are now three people, I have a marketing intern, a researcher and myself. We’ve completely revamped the website and even put a search back on there for those who have requested it, looking for an easier way to navigate the site and find the things you’re looking for. We’re developing some video training, I’m excited about and that’s what I’m doing in the background on topics like governance, architecture and digital strategy. 

You know, why are we doing that because you know, the next generation of health leaders needs something more pragmatic than what we already have out there to be honest with you. More ways, I’m looking for more ways for you to interact with me and we’re looking to develop a new community framework for you to interact with each other. I’d love to do more but we are being responsible with the money that we’ve been entrusted with. We grow as our sponsors come alongside of us. If you want to support the work, drop us a line at [email protected]. Okay, now, let’s get to the news.

[0:04:12.0] Prognosis: mixed. The pandemic will recast America’s healthcare industrial complex, the Economist story, May 9th. Here’s some of the things they had to say, “Doctors and nurses at Northwell Health have treated only 40,000 COVID 19 cases more than any other American provider. But Michael Dowling who runs New York state’s largest hospital firm is not triumphant, “This crisis has humbled us,” he sighs, the same goes for much of America’s four trillion-dollar healthcare sector.”

Skip a little here. Let’s see why. Why is he there? “Reduced spending on healthcare accounted for nearly half of the 12.2%, quarter on quarter drop in GDP in the first three months of the year. Things could get worse. The American Hospital Association, a trade body estimates that members will lose more than 50 billion dollars a month between March and June. Tim Van Bieson of Bain, a consultancy knows that the procedure slight hip replacements and heart and brain surgery which make it the most money for hospitals are down by 65 to 80%.”

“Strata Decision Technology which makes software for hospitals estimates that hospitals revenues have dropped by 90 billion a month. Mr. Dowling says Northwell with annual revenues of 14 billion made a loss of 350 million to 400 million in the past month. HCA, the biggest listed hospital chain scrapped, it’s annual guidance sighting uncertainty.” It goes on, let’s see, “The pain extends beyond clinics, Medtronic, a medical device giant admitted its weekly revenues in America fell by 60% near or near. Even big pharma is not immune. Merck, a large drug maker,” as you know, “said it expected a 2.1 billion dollar hit on sales this year because patients sheltering at home are not consuming physicians administered drugs.”

It goes on to say, “America’s health business faces two questions. How quickly can hospitals return to normal-ish and with them spending on ailments other than the coronavirus and with them, spending on ailments other than coronavirus? Will the crisis reshape the industry? Which is bigger and more byzantine than in other rich countries.”

[0:06:39.6] Let’s see, two more paragraphs, sorry. “The answer to the first question is, not as fast as markets seem to assume. Robert Fields of Mount Sinai Health Partners which has 4,000 doctors, expect normal services to resume slowly with built in inefficiencies arriving from continued social distancing and other administrators concur. Sam Glick of Oliver Wyman, a consultancy says that with new safety protocols extended hours, virtual appointments and the like, non-COVID therapies and income could nearly be back to pre-COVID levels within two months of the outbreak’s peak in a given region without such measures, he says, income might be 35% lower by that same timeframe.”

You have sort of the mix that people are talking about. Some are saying hey, it can come back quick if we do the right things, of course this is a consultancy talking, I mean, you have to take that into account because a consultancy makes money when you say well, I want to make sure we’re doing the things right and then they come in and tell you whether you’re doing the things right.

But generally speaking, the things he’s talking about are what we’re hearing. Safety protocols need to be in place, you can’t have people coming to the hospital without COVID and leaving with COVID, that would be problematic. The safety protocols are important, extending the hours to capture some of that loss revenue is important as well. Virtual appointments, continue to maximize virtual appointments is significant and some of the other things that he talks about.

[0:08:10.7] Actually some good insight there. Health insurers look least vulnerable in the near term, most have big enough buffers to withstand even a severe scenario for COVID 19 which 130 million Americans are infected and four to five million need intensive care, reckon credit raters at Moody’s. The collapse in claims for non-COVID procedures has reduced insurers overall cost. Ricky Goldwasser of Morgan Stanley and investment banker thinks that big ones like you made an anthem could see profits rise 4% and 15% respectively in 2020. Another, Sentine has just hired a thousand new workers. 

However, it’s not all rosy for the insurance carriers, next year maybe tougher for insurers however Wyman estimates that six months after an outbreak starts in a region, they will see a large and substantial rebound in costs as patient seek elective treatments, meanwhile, Gregg Bloche of Georgetown University and Daniel Wikler of Harvard find that insurers and self-insured firms could face a bill next year of over 650 billion for COVID related expenses. I wanted to give you guys a picture of right now, things are not coalescing around how we are doing, it’s mixed, you know, we are starting to recover but we have this gap. I mean, we essentially had three months of almost no revenue, the elective procedures went away and the COVID patients in a lot of regions did not show up and so the revenue just evaporated.

For not only healthcare providers but also for other people that rely on the healthcare complex as they call it. Healthcare industrial complex as they call it, to continue. We are moving from the COVID crisis into a time of financial uncertainty is what it looks like. 

[0:10:14.5] At times where we’re talking about finance, I look at — there’s a couple of organizations within healthcare that are really good and HFMA is one of those and have been having a serious of webinars in the last week, may 12th, they did one called Modeling and Managing the COVID 19 Recovery and it was really good. It was sponsored by Ensemble Health Partners in the SSI group and it was on Tuesday May 12th and the questions they try to answer were how steep and far reaching was the decline, what is the current status and what may recovery look like and what do claims revenues and schedule data tell us. And how can we leverage this information. 

Again, it’s based on claims data and scheduling data and they have a whole bunch of information on the data itself. If you’re interested, you can go out to hfma.org, put in your email and download, great presentation by the way. What they’re seeing is the decline, modeling the decline 40 to 50% decline in overall net revenue and patient volume during the timeframe that they took a look at. That was just in 30 days, timeframe is roughly, got to read that. March through April 15th. Well, it’s mapped through the end of April but the decline was mainly through April 15th, about a 50% decrease in overall revenue. Eligibility volume down 58% over that same timeframe, they took a look at if shelter versus non-shelter states impacted the declines and I would say, roughly, a delta of about 10% between shelter and non-shelter impacting the volumes. 

[0:12:07.4] They go on, I am going to skip a couple of these slides. You can download it and I highly – hfma.org, I highly recommend this presentation is pretty good. So the decline health systems revenue about 27% in inpatient, 58% in outpatient, 53% in emergency and that would coincide with a lot of the other stuff that I am reading. So they start to talk about the recovery and there are some factors you have to take into account in terms of the recovery. 

The internal factors, location, market share, patient mix, case mix, patient access, hospital capacity and those kinds of things, external factors are going to be the COVID spread and decline rates, shelter in place regulations, state regulations, you get the picture. There are some hospitals that still cannot do some of the procedures based on state regulations that are in place. Regulations are the laws, regulations, suggestions. 

I am not sure what they are but the emergency situation that they have set up in the states. But the good news is, we are seeing an uptick, a little bit of recovery. So accelerating growth of 19% has started to show in moving average clean volume data. So recovery since 4/17 is about 19%, 18.6% actually. The Monday claims trend is up as well week over week, eligibility volume is up as well pretty significantly and we’re starting to see it bounce back. 

They also talk about the different regions and how they’ve been impacted. To be honest with you there is not much difference. It is interesting to look at the data and again, hfma.org, download the presentations it’s worth it. They take a look at the west, south, mid-west and northeast. I wish they had broken it down by urban and rural. That would have been more interesting number for me, I think. But anyway, roughly the same decrease across the board. 

[0:14:11.2] Roughly the same uptick and increase across the board as well. It looks like the west is actually was it hardest going in and is popping back quicker than others. So I am going to skip that, skip that. They talk about a lot of recovery scenarios. Again, these are scenarios based on what they are seeing and there is – and none of the scenarios actually bounce this back to a 100%. It bounces it back to about 85%. They don’t cover it in here. 

And I do not get to listen to the entire presentation. So I am not sure why they think we are going back to 85% but there is a delta. I can presume that there is going to be some inefficiencies as we talked about in the previous article built in. You know we are not going with social distancing, new scheduling scenarios. There is just going to be a host of things that are going to keep us from getting back to that 100%. There is a whole bunch of people that still have fear. 

You know again, we told them not to go to the hospital and we gave them good reasons. You know, waiting rooms are bad places to catch disease and whatnot. So we educated them and now, they’re sort of listening to us and potentially staying away. So again, great presentation. They actually go on to talk about how to use AI. I think one of these companies I don’t know which, SSI or Ensemble, probably does some AI work and they talk about the AI work around some of the key areas. 

Schedule optimization, DRG validation, charge capture, pay yield, AR follow up, payer updates, you know what is interesting is one of the questions that I have been getting over and over again and I want to get into your questions and I appreciate everyone who is sending me emails with questions that you have right now, I really appreciate it, [email protected], I haven’t determined if I am going to attribute the question yet or not. 

[0:16:11.5] I am probably going to have to get ahead of this a little bit more and send you an email and ask you if I can attribute the question. But somebody asked me a question around what types of projects should we be prioritizing right now and interestingly enough, you know, from where I sit the question around that becomes it really depends on your health system and where you’re at and how you experienced COVID-19. 

That is just what I find to be the most important thing. I don’t think we can give a blanket answer as to, “Hey, your priority should be telehealth. Your priority should be work from home. Your priority should be…” I think it is impossible to do that. Everything is going to depend on your balance sheet. It is going to depend on your market. It is going to depend on how much revenue you lost. It is going to depend on just so many different factors. 

And this is why I recent post that I put out on LinkedIn, I said you know, the CEO, CFO and chief strategy officer and CIO, so the CEO, CFO and chief strategy officer and CIO of strategies should be in perfect alignment right now. The CIO shouldn’t be offsetting — setting priorities. The security officer shouldn’t be setting priorities. Nobody can work in a vacuum right now. It has to be one system looking at all the factors and there is a certain amount of crisis management that is still going on. 

That needs to be taken into consideration. You just left a COVID crisis and you set up command centers and all sorts of other things and the CEO is heavily involved, the CFO, everyone was talking about these things all at once. Well that didn’t end, we just entered a financial crisis and the CEO, CFO, security officer, medical officer, CIO need to be in perfect alignment on what the strategy is and again, if you’re small rural, it could be a sort of a survival tactic. 

[0:18:08.0] We just lost a lot of revenue. We don’t know how much, we don’t have much to fall back on. That is a different set of strategies. You could be a very healthy balance sheet organization in which case, you should be considering how you are going to take advantage of the situation because I guarantee you, there are organizations right now who are going to take advantage of the situation. They are going to expand. They’re going to take on new service lines. They are going to acquire medical groups. They are going to do all of those things. 

So in this post, I just went to taking a look at what should the priorities be and clearly, integrating virtual care completely throughout your system should be something that you are focused in on but you know a handful of priorities for me are restarting priority care, primary care and didn’t go fall by the wayside but it did not do well during the COVID crisis. And we need to restart that, increasing volume of elective surgeries. Again, from that last presentation, hfma.org, with those two companies they talk about using AI around scheduling. You have to optimize those rooms, optimize those procedures, optimize the time and you know there are a lot of really great technology tools that enable that to happen. So keep those volumes up, keep the elective surgeries going through the system. 

It is a good time for I think, regardless of your size, to look at revenue cycle projects, given the economic hit that’s happened and I think it is really important to do that. I think it is also, you can’t shift too quickly. So I think we have to consider the second surge and second surge readiness should be a project. All rooms and all units you know as we transition them back to doing what we normally do, we’ve got to be able to transition them back in case of a second surge, almost instantaneously. 

[0:20:08.7] I mean within 24 hours at the least. So do you have cameras in all of those rooms? Do you have the ability to make them med surge — transform everything into med surge, you have all the codes already in your system. So just consider from a facility standpoint how you’re going to maintain that high level in case of a second surge if that comes back. 

And then finally, for the healthy select few, polishing the M&A playbook is also top of mind for those with healthy balance sheets. Just something to consider as you’re looking at this and as you are trying to move through it. Again, that is answering one of the question, what priorities would I be looking at, I am really focusing on the crisis and being able to make sure that you handle the transition well and make sure that you provide a safe environment that has to be top of mind and be able to transition back to the type of facility you need to be in case of a second surge. Obviously that needs to be top. 

But then I almost immediately drop to things around efficiency and financial impact and the reason for that is because we’ve got a financial hole to dig out of and to be honest, I don’t think you go back to the same set of projects that you came into this with and just try to get back to doing the same old, same old. That would be problematic because the environment where you made the decision to do all of those projects. 

And you said, “Hey, here are the assumptions. We are going to do these projects.” If you were to take today’s environment, today’s assumptions, I guarantee you they are not the same as when you made the decision to do all of these projects. I would evaluate every project again and say, “Is this worth doing?” I would reprioritize them. Is this top of mind? And I wouldn’t prioritize them with your normal governance. I would put this straight up to the executive team. 

[0:22:15.9] You know the executives team at this time is to lead. It is to make decisions around the allocation of resources, allocation of finances, the allocation of priorities. This is what leaders do in a time of crisis. I think this just goes especially if your governance is not that great I would go straight to the executive team and put this in front of them and say, “We need a set of priorities.” 

So that is my first attempt in answering your questions, I will get better at that. We will create a process where we reach back to you and ask if it is okay to use your names. I will say, “This person asked this question and I want to answer it.” So we are going to keep doing that on a weekly basis. So if you have a question you want me to try to answer, please send it along, [email protected]

That is all for the news 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. This show is a production of This Week in Health IT. For more great content, you can check out the website at thisweekhealth.com and our YouTube channel as well. If you want to support the show, the best way to do that is to share with a peer. 

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Thanks for listening. That is all for now.

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