The New Normal, Interrupted

MHE PublicationMHE August 2020
Volume 30
Issue 8

U.S. healthcare was gearing up for a rebound that includes telehealth. But then the pandemic surged back.

Don’t bother asking Keith Blechman, M.D., when his practice will get “back to normal.”

Operations at his Upper East Side plastic surgery practice in Manhattan have shifted so drastically in the months since the COVID-19 pandemic began that the bygone era of “normal” seems hopelessly anachronistic. “There’s nothing not normal about this,” he said. “This is just how things are.”

It’s not that things aren’t changing for Blechman and his practice. Just about everything has changed. It’s just that he sees little chance that his business will revert to where it was, and in many ways he’s glad it won’t. “There are a lot of things I don’t want to go back to, to be perfectly honest with you,” he says. “This has been a great way to reset and pick the things I like and spend time on the things that I wanted to integrate.”

Don’t call it “the new normal.” The optimists speak of embracing change and their silver-lining playbooks, while their less-sunny counterparts see enormous uncertainty that is hard to get your head around.

But July stress-tested the optimists (and many others, but maybe especially the optimists). After dipping to lows in late June and early July, the number of COVID-19-related hospitalizations and deaths shot back up as outbreaks flared up in Texas, Arizona, California and elsewhere. The Atlantic’s COVID Tracking Project counted 306 deaths on July 4. On July 29, the tally was 1,418, a roughly fourfold increase. Providers hoping for quick rebound had to lower their expectations, and payers with large profits and margins because of lower expenditures had to defend their relative good fortune.

One analysis predicted that without further government support, half of all the country’s hospitals will operate in the red this year. The New York Times science reporter Donald G. McNeil Jr. described the U.S. as a “wounded giant” and characterized the mood of the 20 public health experts the newspaper interviewed as sad and exhausted: “While once there was defiance, and then a growing sense of dread, now there seems to be sorrow and frustration.”

Telehealth’s moment

Blechman continued normal operations until March 13. By the following week, he and his staff were working from home, inasmuch as they were “working” at all. He had lots of company. A report released by Fair Health in June showed that utilization of healthcare professional services plummeted by 65% year over year in March and that revenue fell by an estimated 45%. The drop-off in April was even worse, with utilization and revenue falling by 68% and 48%, respectively.

Telehealth has been a port in the storm — one of the few ways providers were able to provide some services and bring in some revenue amid the pandemic. Findings like those from a McKinsey & Company consumer survey are rife. In 2019, about 1 in 10 U.S. healthcare consumers reported using telehealth, according to the consulting firm. By late April that proportion had grown to about 1 in 2. On the provider side, McKinsey found the number of telehealth visits jumped between 50-fold and 175-fold across health systems, practices and other providers.

Marlena Kane, M.P.H., associate administrator of consumer solutions and access at the University of Southern California’s Keck Medicine, says the acceleration of telehealth amid the pandemic had a running start.

“It’s not that people didn’t have telehealth platforms before this happened,” says Kane. “Systems have been trying to do this for quite some time, so most people have platforms already.”

Uncertainty about payment and a prevailing opinion that in-person visits were better in almost all domains kept telehealth in holding pattern. But amid the pandemic, CMS and private insurers shifted reimbursement policies, and provider and patient views about telehealth’s inferiority changed the same way that attitudes about working from home have shifted. In late July, the COVID-19 public health emergency was extended for another 90 days, so the pandemic status quo won’t be disrupted for another couple of months.

Kane says the prospect of going back to pre-pandemic reimbursement rates for telehealth is scary. “Not everyone has access to telehealth, and it does create some questions around social equity,” she notes. “But for those that do and can have (access to telehealth), it has prevented a lot of gaps in care that might not have been prevented otherwise.” Kane expects high levels of telehealth utilization to continue, including in ways that hadn’t previously been conceived.

Sri Bharadwaj, M.S., vice president of digital innovation at Franciscan Health, an Indiana-based health network, said one COVID-19-related change his hospitals have implemented is an overhaul of multispecialty rounding. Instead of making individual rounds, patients’ teams of specialists now gather in a conference room while one care team member takes an iPad attached to an IV pole to the patient’s room. Using the iPad, all a patient’s specialists can “visit” at the same time, cutting down patient interruptions and decreasing the odds of gaps or miscommunications. “It changes the way care is delivered to the patient on the inpatient side,” he says. While this new way of rounding was born out of necessity, Bharadwaj says it is here to stay at his hospitals.

The expanded use of telehealth for specialist care could be particularly important because specialists have seen huge drops in patient visits. Oral surgery was the hardest-hit specialty, according to the Fair Health report, with utilization dropping by 80% year over year in March and 81% in April.

Now the question is whether healthcare utilization (and expenditure) will come back. The answer: It will because after the cliff dive of the second quarter, the only way is up.Perhapsthe better question to ask is by how much. A June report by the financial consultancy Kaufman Hall said that the operating margins of U.S. hospitals increased to 4% in May, though the report noted that the positive result was only possible thanks to government aid through the Coronavirus Aid, Relief, and Economic Security Act.

Humana CEO Bruce Broussard said at a virtual meeting in late June that his company has seen roughly a 15% drop in inpatient and outpatient volume compared to a normal year. Consistent with Fair Health and Kauffman Hall reports, Broussard said volume dropped markedly in March and April before coming back somewhat in May. He expected volume to continue to ebb and flow in the coming months.

“We continue to believe over a period of time that we will see the continued normality of the care,” he said. “I think it will go in spurts because of threats, of waves and other things.”

Broussard said he’s hopeful that by the end of the year the industry will “get back to normality.”

But that was in late June, before July brought a rebound of cases, hospitalizations and deaths that seemed to push the U.S. back into the throes of the pandemic.

Into the unknown

But adjustment and innovation continue. At his plastic surgery practice, Blechman says he reevaluated every expense and shifted to a model of virtual pre-surgery consultations. As of early July, he had a waiting list of 75 patients. Those virtual visits have opened up new opportunities. He’s considering opening a second office in California, so he can hold virtual consults with patients from his home office in New York and then fly to California to perform the actual procedures. “It’s just sped along what I always wanted to do,” he says

Yet, from a revenue standpoint, Blechman is still operating in the dark.

Asked if the streamlining, the move to telehealth consultations and potential business expansion would leave his practice financially whole, he says the question is impossible to answer. “I can tell you in three months.”

Jared Kaltwasser is a healthcare reporter based in Iowa.

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