May 1, 2020

The Weekly Gist: The Quarantine Fatigue Edition

by Chas Roades and Lisa Bielamowicz MD

How are you sleeping? Like everyone else, we seem to be having a lot of weird dreams during the lockdown, and we’re logging our share of middle-of-the-night Twitter doom-scrolling as well. No wonder that getting up in the morning seems more and more challenging—not that it was ever anyone’s favorite part of the day. New analysis of electricity usage patterns seems to bear it out: we’re sleeping in later and later, and the morning “rush” has become a sustained morning “crawl”. We’re just grateful to have meaningful work to do once we’re up, and the luxury of staying at home to do it, unlike the legions of truly essential workers who have to take their chances in public. But boy, could we use a good night’s sleep. Maybe next month.

THIS WEEK IN HEALTHCARE

What happened in healthcare this week—and what we think about it.

Flagging resolve as the US reaches a plateau

“Quarantine fatigue” set in across the country this week, with individuals increasingly flouting stay-at-home orders, governors announcing “reopening” plans despite no single state meeting federal criteria for “Phase 1” of the Opening America Up Again framework, and the Trump administration allowing its social distancing guidelines to expire. This is despite US deaths from the coronavirus continuing to average around 2,000 per day, a level that has stubbornly plateaued over the past few weeks. At the current pace, the total number of deaths in the US will hit a level in the next week that the widely-watched IHME model still predicts for early August—a worrisome sign, given growing momentum behind reopening efforts. Worldwide, the virus has now infected nearly 3.3M people, including 1.1M Americans, and has killed more than 230,000, with nearly 65,000 of those in the US. Some good news appeared on the horizon this week, however, with White House health advisor Dr. Anthony Fauci hailing early results from trials of Gilead Sciences’ antiviral drug remdesivir as a sign the drug could help lessen the effects of COVID-19 for the sickest victims of the disease. And hopes for an early vaccine were raised as pharmaceutical giant AstraZeneca agreed to produce as many as 100M doses of an experimental vaccine under development at Oxford University.

Meanwhile, the economic toll of locking down the economy continued to grow, with more than 3.8M new jobless claims this week, meaning that more than 30M Americans lost their jobs in the last six weeks. The federal Bureau of Economic Analysis released preliminary data on gross domestic product (GDP) for the first quarter, showing a 4.8 percent decline in the size of the economy, compared to a 2.1 percent increase in the fourth quarter of last year. Startlinglynearly half of the first quarter decline was attributable to healthcare, as consumer spending on care dropped 18 percent, and hospitals and other providers shut down non-emergent care delivery. More than 42,000 healthcare jobs were cut in March, the first monthly drop in healthcare employment in more than six years. While the slow resumption of services may temper those numbers in the second quarter, the precipitous drop belies the notion that the coronavirus pandemic would result in more business for healthcare providers. Rather, it is insurers who stand to gain most from declining care delivery, with many beating earnings expectations for the first quarterHealthcare has been a reliable growth engine for the US economy for years, and the disastrous impact of this health crisis on GDP shows just how fragile that reliance has become. Brace for the second quarter to tell an even more stark story about the fortunes of US healthcare delivery.

More COVID-related regulatory changes from Medicare

On Thursday, the Centers for Medicare & Medicaid Services (CMS) released a second set of sweeping regulatory changes aimed at improving access to telemedicine and COVID-19 testing, and shielding accountable care organizations (ACOs) from losses due to COVID-related care. A few key details: Medicare has expanded the types of providers who can bill for telemedicine visits to include speech, occupational and physical therapists, and agreed to reimburse telephone visits at parity with in-person encounters—key to increasing access for patients without internet access. Medicare will now pay providers to collect samples for coronavirus tests in the absence of other services, and cover FDA-approved, at-home testing. Hospitals will be allowed to bill for an expanded set of services delivered in “expansion” settings, including makeshift hospitals in hotels and public venues, as well as in patients’ homes.

The agency also made significant changes to the Medicare Shared Savings Program (MSSP), aimed at encouraging participants to stay in the program.  The new rules use the program’s “extreme and uncontrollable circumstances policy” to mitigate losses for the duration of the public health emergency, and to remove COVID-related care from cost calculations. ACOs will also be allowed to remain at the same level of risk for 2021. More controversial was the decision to halt enrollment of new ACOs for 2021 (existing ACOs can still add new practices). While CMS cited a goal of allowing providers to focus on COVID-related care, critics countered that the decision slows doctors’ ability to organize around the coordinated, expanded care needed for the crisis. All in all, the new rule ushers in a welcome set of changes that provides payment and flexibility to enhance providers’ response to COVID-19, adding to a list of regulatory changes that could be truly transformative if allowed to continue once the pandemic wanes.

Optum to acquire behavioral telehealth provider AbleTo

Insurance giant UnitedHealth Group’s Optum division is expected to buy New York-based mental telehealth startup AbleTo for $470M, building on its previous investment in the company through its Optum Ventures arm. AbleTo has a network of more than 750 therapists and coaches that provide virtual mental health services to patients via phone or text chatThe company’s main service offering—an eight-week virtual therapy program—is covered by some insurers, and it also offers many free tools for the public on its website for coping with coronavirus. Demand for AbleTo’s services has increased by 25 percent since the pandemic began, with millions of Americans isolated under stay-at-home orders and unable to access in-person therapy. And the country’s behavioral health capacity needs, already in severe shortage, are predicted to intensify as the pandemic persists, increasing the need for mental health prevention and early intervention. United has previously been criticized for inadequate mental healthcare coverage, and AbleTo would allow it to address increasing demand for behavioral health access through its Optum platform. This acquisition continues Optum’s strategy of amassing care delivery assets and gives the company a stronger foothold at the intersection of the behavioral health and telehealth markets.


GRAPHIC OF THE WEEK

A key insight or teaching point from our work with clients, illustrated in infographic form.

Introducing the Gist Healthcare COVID-19 Risk Index

As states and cities start to reopen, there is a fear that infections will (re)surge in those places—and if that occurs, the virus is likely to quickly spread. To identify areas of the country with particularly vulnerable populations, we’ve created a county-level COVID-19 risk index. As shown on the interactive map, we’ve given each county a score from zero to 100 based on three categories of metrics that have emerged as underlying risk factors for COVID-19: 1) chronic disease prevalence; 2) age and poverty rate (which captures the impact of racial and economic disparities on vulnerability); and 3) availability of hospital and intensive care beds. To assess chronic disease prevalence, we included rates of hypertension, diabetes, and obesity, the three most common comorbidities for hospitalized COVID-19 patients in New York City according to a recent JAMA study. Each of the risk factors was normalized and weighted equally to create county-level composite scores—the higher the score, the more vulnerable the population of that county to COVID-19.

While the average index score across the country is 48, it’s evident from the large swath of dark blue across Southern states—some of which are already reopening—that many areas in the region are at greater risk, scoring about 15 points higher than the US average. It’s important to note that this risk index, like any scoring methodology, has some limitations. Take New York City, which has a lower-than-average score despite being a COVID-19 hotspot. The city likely has many other risk factors at play, including high-density living and a heavy reliance on public transportation, that promoted virus spread early on. We will continue to develop and refine this risk index in the coming weeks as we learn more about COVID-19, and we’ll aim to add additional risk factors like race, density, numbers of nursing homes, and possibly even air pollution levels.


THIS WEEK AT GIST—ON THE ROAD PHONE

What we learned this week from our work in the real world

Planning for a “new normal” for hospital finances

In several conversations with health system executives this week, it became clear to us that, as the immediate crush of COVID-19 cases begins to ease, the work of charting the financial future of hospitals is now underway. Near-term measures to redeploy or furlough staff have shifted to longer-term planning for reductions in force, as system executives forecast sizeable hits to operating income lasting through the rest of this year and possibly beyond. At the heart of the effort is a critical question: how much of the profitable, “elective” case volume will come back as the economy reopens? In general, we’re hearing estimates of between 75 and 90 percent, and an overarching concern that even getting back to that diminished level may take months. The shortfall will leave many hospitals in the red, looking to rebase cost structures to match a “new normal” of fewer admissions, a faster shift to lower-dollar settings (ambulatory and virtual visits replacing ED visits and hospital stays), more medically-complex (and thus more costly) patients whose health status has worsened during the lockdown, and consumers who may be skittish about visiting a healthcare setting for some time to come.

Encouragingly, we’re hearing an increased bias toward “systemness”, a clunky term that stands for running the health system as one enterprise, rather than as a portfolio of disparate assets. Executives from three different parts of the country described new plans to “de-layer” corporate structures, eliminate duplicative services, and move to system-wide service line management—all initiatives that have been difficult to achieve politically, but are now urgent priorities given the new revenue picture. These ideas are long overdue, and will be central to the effort to reduce the cost of care by cutting away corporate fat. “Living on Medicare margins” has long been a mantra among executives in the post-ACA era; the coronavirus pandemic may prove to be the burning platform needed to finally make that notion a reality—as financially painful as that will be.

Helping local businesses plan for a safe reopening

Businesses face a long and complicated set of questions as they plan to reopen. Do we need a COVID-19 testing plan? Should employers and customers be screened for illness daily? Do workers need masks and other PPE? And where can we find those masks and thermometers? The decisions are daunting, particularly for smaller and mid-sized businesses. Given the paucity of information from state and local regulators, health systems have told us they’re now getting calls from local businesses looking for guidance. We spoke with two systems this week who are working not just to answer employers’ questions, but to build more comprehensive offerings to enhance COVID-19 workplace safety. Services include COVID testing and screening strategies—and also nurses to support them (with the benefit of mitigating furloughs for those staff). Some are thinking more comprehensively: could the system survey entire workplaces to provide recommendations for social distancing? Employers have been quick to take advantage of this new source of information and assistance. One system in a mid-sized market reported that hundreds of businesses signed up for a hospital-led COVID-19 webinar offered through the local Chamber of Commerce. Providers can play a critical role in helping businesses reopen and operate safely, and build relationships that will pay dividends and enhance their ability to work closely on other solutions once the crisis is over.


THIS WEEK AT GIST—ON THE PODCAST

All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

On last Monday’s episode, we heard from Dr. David Carsten about the urgency for dental practices to make safety modifications and build patient trust; without that, he fears many practices may go bankrupt. The COVID-19 pandemic has also pushed the American Dental Association to change its decades-old, live-patient licensure requirement.

Coming up next Monday, we’ll hear from former Cigna executive-turned-industry-observer Wendell Potter, about how the pandemic will alter the insurance market. Potter expects rising 2021 premiums will drive more employers away from offering health benefits. He is also watching to see if insurers acquire physicians hard-hit by drops in patient volume. Make sure to tune in!

[Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.]


BINGE WATCH ALERT

We would’ve worked harder, but we watch this instead.

Nostalgia is a hell of a drug, and it goes down pretty smooth these days, what with the state of the world. If you’re a Gen-Xer, treat yourself to a heaping helping of the good old days, in the form of a new documentary from filmmaker Spike Jonze now streaming on Apple TV+. Beastie Boys Story is a walk down 80s and 90s memory lane, in the form of what at first blush looks like an extended TED Talk (complete with PowerPoint) by the band’s two surviving members, Mike Diamond (Mike D) and Adam Horovitz (Ad-Rock). Shot live on stage during a handful of NYC and Philadelphia dates, and originally slated to debut at SXSW this year, the film is really a belated wake for late Beastie Adam Yauch (MCA), who passed away in 2012 at age 47, after a battle with cancer. Mike D and Ad-Rock share photos, video, and behind-the-scenes stories about their tumultuous career, from the early days under the tutelage of rap impresarios Rick Rubin and Russell Simmons to their later festival-headlining days. But the documentary is more than just a retelling of the Beasties’ history, or a monument to the incredible talent of MCA—it’s a sweet story of the lasting power of friendship in troubled times, and an honest reckoning with some of the problematic chapters in the band’s history. Plus, lots and lots of great music and video—talk about a band that was in the right place at the right time, just at the dawn of MTV and the explosion of rap. Ch-Check It Out.


GIST IN THE NEWS

We said it, they quoted it.

Amid Coronavirus Distress, Wealthy Hospitals Hoard Millions
The Washington Post/Kaiser Health News; April 27, 2020

“Before the stock market drop, 365 hospitals — about 1 of every 13 — reported an investment portfolio exceeding $100 million, according to a Kaiser Health News analysis of hospital cost reports from 2018 filed with Medicare. Together, those investments pumped $2.8 billion into those hospitals during that year.

“‘A lot of the big hospitals have developed fortress balance sheets since the financial crisis’ of 2008, said Chas Roades, co-founder and CEO of Gist Healthcare, a consulting firm. ‘The reflex is to protect the operation.’ But, he said, ‘if that’s a rainy-day fund, it’s raining pretty hard right now.’”


WHAT WE’RE READING

Stuff we read this week that made us think.

Sweden’s pandemic experiment: miracle or cautionary tale?

As states begin to reopen and stories of overwhelmed ICUs fade from the evening news, a bit of “May euphoria” has emerged, with the hope that the worst of the pandemic is behind us. Supporters of more rapid reopening have pointed to Sweden as a paragon of safely loosening social distancing restrictions. The Scandinavian country has famously taken a laissez-faire approach, in stark contrast to every other Western country (and contrary to the consensus of public health experts worldwide). It has put in place few official measures to slow the spread of the virus, apart from banning events with fifty or more people. Bars, restaurants, schools, and hair salons have remained open; masks and other protective gear aren’t recommended. For a Los Angeles-based journalist who recently moved back to his native country, arriving in Sweden was a jarring and surreal experience, walking down crowded sidewalks and seeing crowded coffee shops, as if the past three months hadn’t happened.

Swedish officials point to their citizens’ longstanding trust in the state and self-discipline as justification that few formal policies were needed, and that Swedes could be relied on to follow voluntary guidelines. (Critics also point to a cultural sense of “Swedish exceptionalism”—sound familiar?) But they deny pursuing an official strategy of achieving herd immunity. Data suggest the strategy may not be working as well as hoped. New cases and deaths continue to rise, and testing rates are low. COVID-19 deaths per capita are over five times higher than in neighboring Norway and Finland, and nearly 30 percent higher than in the US—astounding, given that with low population density and half of residents living alone, Sweden has a high level of “built-in” social distancing. The country pulled back from an earlier report suggesting that a third of Stockholm residents may already have been exposed. It is too soon to call Sweden’s strategy a success or failure, but thus far the experiment is proving to be more cavalier than genius. The world will be watching to see how this outlier nation fares.

Redefining experience and operations for the COVID age

We’re (very) frequent travelers, so part of the adjustment to quarantine has been managing our withdrawal from the familiar routines of airports, hotels, and restaurants. With a long, slow recovery period ahead, it looks like those routines could be in for some major changes—and what we’re learning about travel in the era of COVID could contain lessons for healthcare delivery, too. Hotels are rethinking cleaning procedures, amenities, and guest management as they prepare for reopening. This piece on the Four Seasons in New York City, now repurposed to house healthcare workers, provides some clues. Gone are many of the “extra” items in guest rooms—extra bedding, hangers, and minibars. Guest check-in and check-out are now contactless. Temperature screenings are routine. Meals are available only in take-away containers. And rooms are deep cleaned after every guest stay and left empty for a full 24 hours between stays. Airlines are making big changes too: passengers and crew are required to wear masks, meal service has been curtailed, and middle seats are blocked to allow distancing.

All of these changes slow down operational processes, reduce effective capacity, and de-emphasize consumer experience in the name of safety—an obviously correct choice. Think of this as “The 50 Percent Economy”, and now ask how many fixed-cost businesses (like hotels, airlines, and yes, hospitals) will be able to sustain this kind of configuration for the next year or more. Not only will the economics be challenging, but it will be critical to communicate this new, safety-first value proposition to consumers who, like us, are used to a very different standard of service.


Another week, another Weekly Gist. Thanks so much for making us a part of your routine, and for your generous feedback and suggestions. Please remember to share this with a friend or colleague and encourage them to subscribe, and check out our daily podcast.

Most of all, please let us know if we can be of assistance in your work. You’re making healthcare better—we want to help!

Stay safe and take good care,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com