At the Helm

10 takeaways: America may be 'flattening the curve.' (But it's too early to declare victory.)

by Christopher Kerns and David Willis

A lot has happened this week as the Covid-19 pandemic continues to ramp up. To help navigate the developments, we have compiled a list of 10 key takeaways on Covid-19, consolidated from our webinar on April 16. Join us Thursday, April 23, for an update on where things stand.

Slide deck: Your 45-minute Covid-19 update

  1. US case count tops 600K

    The number of confirmed Covid-19 cases in the United States continues to grow, exceeding 600,000 as of April 15th, with more than 25,000 deaths attributed to the virus. However, although the pandemic continues to cause significant damage to the health and economy of the United States, for the first time this past week there have been signs of progress.

  2. NY is flattening the curve

    For example, while many states have yet to see the peak of the virus' spread, there are additional indicators that New York may be flattening the curve. The death toll in New York City appears to have plateaued across the past week; this is unquestionably good news for the nation's largest and hardest-hit city. It will be worth watching closely if Detroit, New Orleans, Boston, and other high-incidence areas are able to show similar progress in the coming weeks.

  3. As ICU bed shortage projections decrease, testing availability increases

    Sustaining another welcome trend from last week, the nation continues to see a reduction in projected ICU bed shortages and simultaneous increases in the availability of testing. States across the country have mobilized in advance of surges, finding (or creating) more ICU capacity, and using alternatives to ventilators as a primary therapy.

    When combined with continued adherence to aggressive social distancing measures, a situation that seemed dire just two weeks ago now appears much more manageable, with only a handful of states projected to fall short of the necessary number of beds.

  4. …but rate of testing might not be increasing fast enough

    The news on testing is not all positive however. Nationally, the United States has conducted about a million tests in each of the past two weeks—a vast improvement from prior weeks, although the number is not growing.

    More concerning, the overall positivity rate remains just shy of 20%, which is very high compared with other countries. This may suggest that the rate of testing is not increasing fast enough to keep up with the spreading virus, and may also indicate that we are missing large numbers of people who have the disease.

    As the debate around reopening the economy continues, it is important to watch this metric, which almost certainly needs to come down substantially to ensure public safety.

  5. Health systems must solve for two post-surge challenges

    As health systems start addressing the question of when to reopen for routine care and elective surgery, they must develop sustainable solutions to at least two challenges. First, can they ensure a steady sufficient supply of PPE? Second, will they have enough healthy, fully engaged staff to care for both ongoing Covid-19 patients and new patients who will be seeking care for other conditions?

    Health systems that are unable to address both of these issues will find themselves unprepared to meet market demands for care.

  6. Post-Covid, volume recovery is the key variable for providers' success

    Volume recovery in a post-Covid world is likely the most important variable that will determine the success of provider organizations across 2020 and 2021. The immediate consequences of dealing with a surge of Covid-19 patients largely center on maintaining sufficient cash flow to fund operations. This is clearly an urgent issue; but more important over the medium- and long-term will be the ability of health systems to return to a sustainable margin.

    Capturing volume alone will be necessary but not sufficient, as the case mix and payer mix in the months ahead will be weighted toward complex medical admissions for Medicare and Medicaid beneficiaries, crowding out opportunities to capture latent profitable procedures. Further, as the economic effects of a recession take hold, health systems should expect a significant deterioration in payer mix; even those individuals who retain employer-sponsored insurance are likely to see their benefits plan shift to more aggressive models for controlling cost.

  7. Looking ahead, revenue cycle performance emerges as another key variable

    Another variable that will heavily influence provider economics in the near- and medium-term is revenue cycle performance. Health systems need processes, systems, and adequately trained staff, all capable of appropriately coding, documenting, and billing for Covid-19-related care.Simultaneously, provider organizations will need to carefully manage the patient financial experience, both to comply with emerging regulations around Covid-19 and to account for the immense financial pressure many patients will likely be facing.

  8. Silver lining? Improved public opinion of the industry.

    One potential upside from the current pandemic is a positive shift in public perception of the industry. The consistent narratives of heroism on the front line, of hospitals dramatically changing operations to accommodate a surge of Covid-19 patients, and of emerging community partnerships to fill gaps in care, all have contributed to improved brand equity for health systems and physician groups.

  9. But post-acute care facilities aren't sharing the 'era of good feeling'

    The one segment of the industry that is not sharing in this "era of good feeling" is post-acute care. Well-documented cases of post-acute facilities being unprepared and ill-equipped to deal with the outbreak have created a PR problem that may prove insurmountable for some and may further accelerate the shift to home-based care as a preferred alternative.

  10. Post-Covid, organizations need to use positive momentum to restore financial health

    For health systems and physician groups, the shift in public perception is a welcome, albeit likely temporary, respite from the barrage of recent issues such as surprise billing and disruptive innovators. But those concerns have not gone away, and are certain to return to the national stage in the months leading to the election.

    Provider organizations should recognize that the industry that emerges from Covid-19 will not be one that resembles the days of limited external competition and minimal pricing scrutiny. Instead those who are best positioned to win will be those who can harness the positive perception of the current environment long enough to restore financial health and regain competitive advantage.

Slide deck: Your 45-minute Covid-19 update

Stay up to date on the Covid-19 epidemic with this on-demand webinar and downloadable slides from April 16, 2020.

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