By Josh Gray
In the first month of the COVID-19 epidemic, I regularly heard the phrase “when things get back to normal.” I don’t hear that any more.
In health care, more people are realizing that we will “get over” the coronavirus epidemic in gradual increments lasting years and that the health care system we return to will not be the same. The new normal will include difficult realities: the industry will be more concentrated and more financially stressed due to serious damage to the general economy and widespread ongoing health problems resulting from the direct and indirect effects of the epidemic. But tragedy breeds innovation and an openness to change. The post-COVID health care industry will be more willing to embrace new technologies and service innovations and to weed out low value care.
Following are five ways in which health care will change as a result of the COVID-19 epidemic:
- Hard pivot to virtual care
The severe contraction of office visits for medical care has been astounding. As the fear of COVID exploded, people stopped seeing their doctors in all but the most acute situations. In a single two week period (March 8th – 22nd) the volume of office visits around the country fell by 55%, reportedly as much as 80% in New York and California. By the end of April, fewer than 20% of ambulatory care visits were in person. In 2016, the Centers for Disease Control (CDC) estimated there were roughly 890 million physical office visits to physicians for medical care. We’re unlikely to ever see that level again.
Fortunately, the health care system responded by giving patients easier access to virtual care. As physical visits cratered, the telemedicine industry grew more in a week than it had in a decade. Volume surged for telemedicine companies such as AmWell, Teladoc, and others. The Centers for Medicare and Medicaid Services and numerous insurers stepped up to loosen HIPAA restrictions and establish policies providing equivalent reimbursement for office visits and telemedicine (though not necessarily committing to making these changes permanent).
COVID has also accelerated adoption of chatbots, or AI-enabled software applications that generate information and respond to questions through text or voice. The Centers for Disease Control has deployed a chatbot to help users self-assess their possible COVID symptoms. The World Health Organization developed a bot to ensure dissemination of accurate information, accessible in over 20 languages. For-profit companies have developed COVID-19 specific chatbot tools, while increasing numbers of health systems are using the tools to help patients triage symptoms, access care, and receive lab results.
Will the shift to telemedicine last after the pandemic subsides? I strongly believe so. While patients tried virtual care out of necessity, many like the experience and are open to receiving care virtually in the future. Many physicians have also come to recognize the value of caring for patients remotely. Given the overall positive experience with virtual care, public and private payers will find themselves under pressure to make equivalent payment between physical and virtual care permanent.
AI will have an important role to play in improving the virtual care experience. Chatbots will continue to evolve, which will be important in screening and referring patients to the appropriate care provider, especially in the event of further surges of COVID, when resources for triage will be insufficient to meet demand. AI tools will be critical in identifying patient risk levels to guide outreach efforts for at-risk seniors, who may not be engaging with their health care providers due to COVID. AI can also make virtual visits more effective by organizing information to reflect underlying risk, so that clinicians can spend less time hunting for information and more time making decisions and connecting with patients.
- Accelerated Industry Consolidation
The pandemic is proving to be financially devastating for health systems, which depend on high margin surgical and diagnostic procedures for their financial well-being. These procedures have plummeted around the country, as safety fears have eliminated all but the most urgent treatments. It is not unusual for health systems with 2- 4 % operating margins to see 40 or 50% drops in revenue, throwing them into severe financial distress.
To respond to revenue shortfalls, health systems have been forced to take extremely painful steps to reduce costs. Mayo Clinic, which saw surgery drop 70 – 75%, will cut staffing costs by $1.4 billion across the year, with executives taking a 20% pay cut and 30,000 staff (42% of the total) facing furloughs or reduced work hours. Beaumont Health system in Detroit has furloughed 2,475 staff and permanently eliminated 450 positions. The industry as a whole lost 43,000 jobs in March alone.
As the dust begins to settle, many stand-alone hospitals and smaller systems will need to merge with larger, better capitalized competitors in order to survive. The resulting industry will be increasingly dominated by large health systems.
The dynamics for physician practices are similar. Office visit volumes have dropped sharply. Even as late as the first week of May, one survey reported that 70% of primary care practices reported volume declines of 50% or more. Many practices have had to close, at least temporarily. As of the first week in April, many had or were planning to furlough or lay off staff. Rather than undertaking the difficult work of reopening, some physicians are likely to accept employment with health systems in their area or retire. Those that reopen will need to develop workflows for minimizing the risk of COVID infection, which could make it difficult to maintain high productivity levels. In short, there will be fewer independent primary care practices and many that remain will continue to face operational and financial challenges.
- Long-term disease burden
Whether or not they become ill with COVID, the physical and mental health of tens of millions of Americans will get worse as a result of the epidemic. Providers will need to respond with innovation.
The most obvious toll will be borne by people who survive COVID after hospitalization. COVID survivors, especially those with long ICU stays and acute respiratory distress syndrome (ARDS) will suffer disproportionately from long-term lung damage, kidney disease, cognitive impairment, depression, and post-traumatic stress disorder (PTSD). They will require close monitoring and follow up.
COVID is also creating a “silent sub epidemic” of people with acute and chronic problems who are avoiding the health care system out of fear of infection. People are delaying care until the last possible moment, showing up with much more advanced problems that may have long-term health consequences. Some are even staying home with heart attacks and strokes. Disruption to regular engagement with the health care system will mean that people with diabetes, asthma, hypertension, and other problems will experience disease progression that could have been avoided but will need to be managed.
Any societal disaster – 9/11, the SARS epidemic, the Boston Marathon bombing – causes serious, long term mental health problems, including depression, anxiety, and post-traumatic stress disorder. The COVID pandemic will be no different, except at a much larger scale. Many caregivers and first responders, as well as the general population, will likely develop mental health problems as a result of the epidemic.
These incremental morbidities will place new demands on a health system that is already adjusting to caring for people that are reluctant to engage in physical care interactions. Responding to these needs will require a range of innovations. AI applications will be needed to identify individuals at greatest risk and most likely to respond to well-timed interventions. Providers will need to use technology to monitor health indicators in patients’ homes and try to encourage behaviors that will help them manage their diseases. A range of startups are using AI techniques, monitoring technologies, and innovative service models to manage diabetes, COPD, and mental health problems.
- Leaner Medical Care
COVID-19 is the largest natural experiment in the history of US health care. Well before the epidemic, there were ongoing debates on the value of certain high cost procedures (such as vertebroplasty, knee arthroscopy, and stents for stable cardiac disease, to name a few). With COVID, the volume of many services has been cut back dramatically out of patient safety concerns. Researchers will be able to link lower volumes of services (from primary care to high cost surgery to specialty services) to outcomes, showing that some services bring essential clinical benefits while others offer only modest value relative to their cost.
This new knowledge on cost and value will become available while the economy is still damaged and public budgets are under pressure. It seems likely that the combination of greater insight and more intense cost pressures will lead to a health care system more receptive to providing less low-value care.
- Health Care Reform: A Wild Card
COVID is highlighting and exacerbating pre-existing flaws in the health care system, making what was already a barely tolerable situation even worse. In 2018, employer-sponsored insurance cost about $20,000 for a family of four. Much of that amount is paid by employers (reducing the amount of take-home pay) but families are also subject to about $6,000 in out of pocket expenses. Many individuals and families are unable to afford these levels and therefore one in four Americans skip needed care due to cost.
That was before COVID. The epidemic has already led to over 33 million job losses, and unemployment is forecast to reach 16%. With few work prospects, many people will be unable to afford to pay for COBRA benefits. Some will go on Medicaid, increasing financial pressures on providers, since Medicaid reimburses providers at much lower rates than commercial payers. Others will become uninsured, making it much more difficult for individuals to access needed services and pressuring providers still further. The struggles that providers and patients have long grappled with get worse from here.
With support for and resistance to meaningful health care reform deeply entrenched in US politics and the short-term prospects for reform largely dependent on the upcoming presidential election, it is difficult to predict how these forces resolve. But it is safe to bet that pressure for some type of reform will increase at the state and federal levels. Absent meaningful change, frustration with the current practice will intensify.
* * *
These changes – more telemedicine, more consolidation, greater disease burden, leaner medical care, and volatile prospects for health care reform – scratch the surface for a post-COVID health care industry. The dislocation will be profound and the baseline moving forward will look and feel very different.
