What Will Post-Covid Healthcare Look Like?

With curves flattening, the capacity for contact tracing increasing and more testing, perhaps the COVID-19 outbreak will recede, and we will return to…

“Is there anything really to talk about in terms of ‘back to normal.’ That is probably not what we are looking at here,” said Mark Grube (pronounced GROO-bee) in a recent interview with Managed Healthcare Executive. “We are probably going back to a different reality.”

Grube, leader of Kaufman Hall’s healthcare strategy services, and his colleague, Chirag Patel, have modeled four possible scenarios for American hospitals, which you can see here. The company also came out with a new report yesterday about hospital finances that paints a grim picture. 

But MHE had a wide-ranging conversation with Grube, who has more than 30 years working in the healthcare sector, in which he shared some useful insights about the COVID present and the COVID future of American healthcare. Grube sees providers becoming even more consolidated as financially shaky hospital systems look for partners. Like anyone else who has given even a passing thought about what’s coming next, he sees the possibility of a huge shift toward telehealth (unless telehealth regulations that had previously slowed its adoption snap back into place after the public health emergency is over).

If telehealth booms, Grube noted, then so much of what we have accepted as being part of healthcare will be called into question: everything from the waiting room to the large, centralized hospital to the nuts-and-bolts of how patients are cared for. 

Grube gave the example of someone with hypertension: “Do they really need to go to the doctor’s office twice a year and be exposed to potential viruses and other disease or could they have a telehealth visit with the doctor and take their own blood pressure with a $20 or $50 device from Walgreens and tell the doctor the reading?”

He also sees implications for the healthcare’s physical plant. Referencing that half of Kaiser Permanente’s physician visits are conducted on mobile devices, he said that “if half of all physician visits move to that kind of basis, there just won’t be the need for as many exam rooms around the country.”

Grube said the consideration given to infectious disease prevention will be lasting and color nearly every decision in healthcare. “Even once we are through this pandemic there is probably going to be that sinking feeling that we are just waiting for the next one to pop up again.”

As a result, hospital leaders are rethinking where surgeries should be done, according to Grube. One strategy would move cases out to ambulatory surgery centers, so surgeons and patients would be physically removed from the main hospital and possible infection with the SARS-CoV-2 virus that causes COVID-19 - or any future infectious agents that may emerge to wreak havoc. In this scenario, says Grube, outpatient care may be “stripped out” of the hospital. But there’s another school of thought that multiple centers will be risky, he said, and centralizing care where strict protocols could be set up and monitored would be safer.

Related: What Are Hospital CFOs Working On?

Grube gave mammography as an example of a service that might permanently move out to a freestanding center to keep patients physically separate and presumably safer from an infectious disease perspective. Perhaps those imaging centers will operate like the cellphone lot at airports, with patients waiting in their cars to be called in one at time. That might be less efficient, but it would be in keeping with social distancing practices designed to reduce transmission, Grube noted.

But all of this resides in a COVID future, which will feature, unquestionably, some unanticipated  developments.

Meanwhile, in this, the COVID present, hospitals in hotpots are dealing with a crush of very ill patients (although there is good news out of New York and elsewhere that admissions are falling), and hospitals everywhere are dealing with the financial fallout of the outbreak. “As we talk to clients around the country, pretty much everyone is hurting,” said Grube.

The cancellation of elective procedures has hit hospitals hard, he explained. Hospitals tend to make most of their margin on people with commercial insurance and on elective procedures, surgical and diagnostic. “The economic lifeblood of hospitals has been severely disrupted,” he said, mentioning that he knows of two mid-sized health systems with between $2 billion and $3 billion in annual revenues that suffered a $70 million reduction in March alone. Meanwhile, on the cost side, COVID-19 has put pressure on budgets because of the need to buy PPE and make other preparations for infected patients, even if that patient volume ultimately fails to materialize. 
It is a “double whammy,” to both lose such a large amount of revenue and have costs go up.

Grube said hospitals can be grouped into one of three categories, financially speaking. Some are “severely damaged and have limited strategic options going forward.” Others are moderately damaged and will have a lot of work to do - and tough decisions to make - to get back on a sound financial footing. The third group has been relatively unscathed.

Not surprisingly, Grube said small hospitals or systems are more likely to be in the severely damaged group, and some will be looking for a partner in order to survive.

“The organizations that came into this with a weak balance sheet are undoubtedly going to see a hit on days-cash-on-hand. And those who had weak balances sheets going into this will probably be extremely weak on the other side.”

How much the infusion of federal funds into hospitals will help the sector and individual hospitals is yet to be seen, Grube said. But part of the “new stasis, the new landscape” will be more consolidation.

“We were already seeing that the natural evolution of the business was propelling the industry toward greater scale, and larger and larger organizations extending across broader and broader geographies. That was happening pre-COVID. I suspect that because what will likely be the significant damage done financially to hospitals that this will accelerate at least for a period of time till we get to a new stasis.”