COVID-19 Recovery Document
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COVID-19 RECOVERY FOR THE AUSTIN HEALTHCARE ECOSYSTEM
Compiled By:
TEXAS MCCOMBS MBA HEALTH INNOVATION FELLOWS
PERRI COOPER | RUPAL DESAI | CAROLINE GREEN, MD | AMIT RAO | EMILY STEEMERS
In Collaboration With:
AUSTIN HEALTHCARE COUNCIL
GUS CARDENAS, PRESIDENT
MELANIE CONNOLLY, PROJECT SUPPORT
JUNE 9, 2020
Executive Summary
Introduction: This report provides a high-level roadmap of key challenges and opportunities for Austin Healthcare Council (AHC) members during the ongoing reopening period that can inform strategic planning around the COVID-19 pandemic. Our findings represent a collective scan of major trends and best practices synthesized from over 15 interviews with AHC members, Austin city leaders, and University of Texas at Austin (UT) faculty, as well as outside research. This project was a joint collaboration between AHC and Texas McCombs MBA Health Innovation Fellows (HIF).
Key Themes: Even before COVID-19, the U.S. healthcare system suffered from dysfunction, prompting the industry to lean away from fee-for-service towards more patient-centric delivery models. COVID-19 served as a shock to the system, highlighting flaws in the healthcare business model and triggering a hard reset for many stakeholders. The pandemic has also underscored key racial and socioeconomic disparities in health and access to healthcare. Austin healthcare leaders are responding by examining how COVID-19 can serve as a catalyst to accelerate health innovation, foster stakeholder collaboration, and improve value in healthcare delivery.
COVID-19 Crisis Recap
Starting in mid-March, providers experienced overnight patient volume declines of 30 to 100 percent, driven by the halt on elective procedures and patients avoiding non-elective care due to fears of COVID-19. Declining patient volume created downstream market demand impacts for hospitals, physicians, payers, medical device manufacturers, and health tech companies, triggering significant reductions in monthly revenue for Austin healthcare organizations. Surging demand for personal protective equipment (PPE), medical equipment, and sanitation supplies has increased certain short-term costs up to tenfold, creating new daily challenges in managing supply chains. Austin healthcare organizations have responded to these new pressures through workforce reductions and reallocations, telehealth expansion, and creative approaches for sourcing and managing medical supplies. COVID-19 transmission fears, in conjunction with payer reimbursement flexibilities, have rapidly accelerated patient demand for and provider adoption of telehealth services, particularly in primary care and behavioral health specialties.
Near-Term Reopening Challenges
We found several key challenges for Austin healthcare organizations to consider in the near-term while managing reopening, including costly new workplace safety practices, unmet healthcare needs, patient and consumer fears, supply chain disruptions, technology implementation concerns, and mental health risks. Implementing new safety practices to protect employees and consumers, ensuring adherence to public health guidelines, and managing liability risks will be costly, could reduce efficiency, and may result in interim operating losses. COVID-19 is contributing to growing displaced care from postponed surgeries and reduced chronic care management, potentially exacerbated over time by the rising uninsured population, veteran physician retirement, and independent practices closing. Austin healthcare organizations must reassure patients that they can safely seek medical care and restore consumer confidence to engage in business despite fears of COVID-19. Broadening PPE requirements from strictly clinical use to general use for businesses and consumers as the economy reopens may intensify supply chain struggles. Telehealth adoption may require new medical, regulatory, and security considerations; timely research for appropriate software vendors; workforce retraining and reallocation; and institution of new clinician procedures. Finally, providers have raised alarms about increasing behavioral health needs and healthcare employers are concerned about the growing risk of employee mental health burnout.
Best Practices for Reopening
Public Health Compliance: Adhere to and continually monitor the evolving Texas Minimum Standard Health Protocols and Centers for Disease Control and Prevention (CDC) Businesses & Workplaces Guidelines for reopening safely.
COVID-19 Processes & Patient-Centered Care: Sequester COVID-19 patients at separate facilities; segment high-value services at specific times/locations (e.g., designate a specific half-day for wellness/immunization visits); and reassess patient scheduling and intake to implement touchless check-ins, screenings, and payments, as well as reduce or eliminate waiting room usage. More broadly, COVID-19 presents an opportunity to reevaluate care delivery and pivot towards more patient-centric care coordination and value-based care.
Safety Communication: Over-communicate new safety protocols to build trust and credibility. Patients, consumers, and employees expect procedural/technological changes and seek to understand what is changing and why. Ensuring consumer and employee confidence while reopening businesses is critical for long-term performance.
Workforce Retention, Telework, & Behavioral Support: Examine avenues to repurpose existing staff and utilize flexible hours/shifts to minimize further workforce reductions. Enhance workplace accommodations and technological capabilities for virtual/remote work (especially for employees struggling without childcare services). Increase behavioral health support and reinforce healthy cultural norms for employees to seek behavioral care.
Supply Chain Diversification: Seek non-traditional vendors, build redundancies, and hold more inventory on-hand. Consider permanent changes to diversify long-term sourcing. Austin healthcare companies may also explore forming buying consortiums or utilize supply trading platforms to increase purchasing power and reduce prices.
Structured Telehealth Adoption: Prioritize nimble software vendors willing to respond and evolve with feedback, ensure universal browser and device access (e.g., Android vs. Apple), coordinate implementation physician and operation team leads, identify “tech comfortable,” creative physicians to pilot programs, and utilize both messaging and video chat capabilities to meet patient preferences.
Service-Focused Innovations: Target health tech/start-up innovations utilizing service components with recurring revenues that connect with specific provider needs, as these opportunities will be more appealing to investors concerned about market uncertainty.
Longer-Term Strategic Outlook and Key Risks
Stakeholders should note numerous financial, regulatory, technology, and workforce risks over the long-term, as well as the increasing potential of a second COVID-19 surge during the summer and fall. We anticipate a gradual return over the next year to pre-COVID-19 patient volumes, and hospitalists, specialists, and proceduralists dependent on physician referrals may lag in volume recovery. Healthcare organizations must implement costly reopening processes, while managing public health uncertainty and responding to evolving Austin COVID-19 policies. Business and workforce flexibility will be key to pivot and plan for the emerging healthcare delivery environment. Stakeholders expanding telehealth face an uncertain regulatory and reimbursement landscape, and increased use of telehealth across diverse platforms may raise fraud and abuse, licensing, credentialing, privacy, and cybersecurity concerns. Regulatory changes could allow patients to choose physicians based outside the Austin area via telehealth, diverting business from the Austin market. Companies seeking to retain workforce and diversify supply chains may face new economic pressures limiting these efforts. Healthcare leaders are also universally concerned about the mental health of their workforce. Finally, the nationwide impacts of COVID-19 may prompt changes in the federal government’s spending and regulatory role in healthcare.
Summary Breakdown of COVID-19 Trends & Impacts by Healthcare Stakeholder
Stakeholder
Hospitals
Challenges
Revenues decreased as elective procedures were halted.
Costs and difficulty obtaining PPE increased significantly.
Staff burnout and disengagement have become prominent concerns.
Opportunities
Diversify the supply chain and consider PPE stockpiling to meet potential pandemic stresses.
Over-communicate new safety measures to staff and patients to promote trust and confidence.
Stakeholder
Physicians
Challenges
Volumes decreased significantly, requiring many providers to make cost-saving staffing changes.
Telehealth requires new workforce training, medical protocols, and clinician operations.
Safely providing care requires changes in processes and workflows to adhere to public health guidelines.
Opportunities
Reallocate workforce in response to changing care delivery model for PCPs with increased telehealth (e.g. more “home-based" patient-centered medical home model).
Optimize care protocols to limit physical contact with patients as much as possible.
Stakeholder
Behavioral Health
Challenges
New stresses on already under-resourced mental health services—45 percent of U.S. adults report negative mental health impacts due to worry and stress regarding COVID-19.
Opportunities
COVID-19 has prompted increased behavioral health awareness that may promote inclusion in primary care.
New reimbursement policies are needed for shorter and potentially cheaper telehealth encounters.
Stakeholder
Payers
Challenges
Providers seek advance reimbursement, while employers press for deferred premiums.
Medical claims uncertainty as members avoid care or lose employer-sponsored insurance.
Shrinking commercial insurance market anticipated through 2020.
Opportunities
New payment models for telehealth, mobile labs, and home-based care could help optimize patient care and meet employer cost-saving needs.
Declining and changing healthcare utilization could improve identification of necessary and unnecessary care.
Stakeholder
Medical Device
Challenges
Cancellation of elective surgeries, clinical trials, and research reduced revenues significantly.
International supply chains are strained due to the pandemic.
Opportunities
COVID-19 related products (e.g. testing, PPE, home care, etc.) could provide alternative revenue streams.
Innovations utilizing service components that connect to provider-needs may be in higher demand.
Stakeholder
Health Technology
Challenges
Contact tracing requires a high volume of personnel for success and raises new cybersecurity concerns.
Data accuracy and patient matching is increasingly important as patients migrate to online services.
Opportunities
New patient demand and physician adoption of telehealth and digital health platforms unlikely to go away.
Market for contact tracing, touchless front desk technologies, and patient identification tools will increase.
Stakeholder
Non-Profits
Challenges
Event-centric funding opportunities were cancelled or postponed, removing a key source of funding.
Opportunities
Consider alternative funding opportunities.
Streamline operations where possible.
