May 15, 2020

The Weekly Gist: The Serenity Now Edition

by Chas Roades and Lisa Bielamowicz MD

We were saddened to hear of the passing this week of Jerry Stiller, half of the 1960s comedy duo Stiller and Meara, father of actor Ben Stiller, and best known for his portrayal of Frank Costanza on the 1990s sitcom Seinfeld. Appearing in fewer than 30 of the show’s 180 episodes, he gave birth to some of the funniest moments in television history—Festivus for the Rest of Us, the Manssiere (or Bro), Del Boca Vista, and, of course, the phrase we’ve been repeating over and over in our heads for the past nine weeks of lockdown…“SERENITY NOW!” Rest in peace, Jerry.

THIS WEEK IN HEALTHCARE

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

A worrisome bump on the road to nationwide testing

In a week that saw reopening activity pick up across the country, drawing even more attention to the need for sufficient testing to give employers and workers confidence in returning to work, a new study from researchers at New York University (NYU) suggested that a widely-hailed rapid testing machine from Abbott Labs may be unreliable. The Abbott ID NOW COVID-19 test produced false negatives a third of the time using nasopharyngeal swabs, and 48 percent of the time with less-invasive “dry nasal swabs”, according to the study, which has not yet undergone peer review. The five-minute, point-of-care test received emergency use authorization from the Food and Drug Administration (FDA) in late March and has been touted as a “great test” by President Trump, whose White House relies on it to test the President and those around him. On Thursday, the FDA issued a warning about the potential for false negative results using the Abbott test. The company disputes the findings and sent a list of questions to the NYU researchers for clarification. Meanwhile, two White House staffers—an aide to the President and the Vice President’s press secretary—tested positive for coronavirus, causing the White House to mandate masks for all employees starting this week. The uncertainty around test results, and the ensuing concern about safety at the White House, provides a foretaste of the difficult road ahead for thousands of employers nationwide as stay-at-home orders are lifted, and companies consider when and how to reopen workplaces. If the White House is struggling, how will ordinary businesses fare? US coronavirus update: 1.46M cases, 87K+ confirmed deaths, 10.2M total tests conducted.

CMS continues push toward price transparency

The Centers for Medicare and Medicaid Services (CMS) released its 2021 Inpatient Prospective Payment System (IPPS) proposed rule this week. Along with a modest overall rate increase of 1.6 percent for hospitals, and a change to residency funding to better protect residents in the wake of program or hospital closure, the rule builds on CMS’s 2019 price transparency efforts by requiring hospitals to list median, payer-specific, negotiated rates for inpatient services, reported by Medicare Severity-Diagnosis Related Group (MS-DRG) on cost reports. The American Hospital Association (AHA) denounced CMS’ latest transparency push as “unlawful”, building on its ongoing court challenge to the agency’s price transparency rule, and arguing that forcing disclosure of negotiated rates is government overreach, violates the First Amendment, and won’t further CMS’s goal of paying market rates that reflect the cost of delivering care. The new inpatient payment proposal signals the Trump administration’s continued commitment to price transparency, a key area of emphasis across the past three years. With consumers bearing a growing proportion of healthcare costs as the nation heads into a recession, continuing to defend “secret pricing” could be harmful to public perception of hospitals, and dampen the wave of support providers have received in the wake of caring for COVID-19 patients. Comments on the proposed rule are due by July 10th.

Approaching a “land grab” for virtual care

This week brought announcements from health plans and disruptors looking to expand their virtual care platforms, responding to consumers’ rapid embrace of online visits during the coronavirus lockdown. Having previously sold its services through employers, commercial insurers and directly to consumers, Doctor on Demand became the first telemedicine vendor expand into the Medicare Part B program, taking advantage of loosened regulatory restrictions to offer its services to seniors who rely on fee-for-service Medicare coverage. As provider concerns grow about the stability of telemedicine payment for 2021, BlueCross BlueShield of Tennessee became the first major commercial plan to announce that telemedicine coverage changes will be permanent (but included no mention of how future virtual visits will be paid, relative to reimbursement for in-person encounters). And Washington State-based Premera Blue Cross announced the launch of its first “virtual primary care health plan”, partnering with virtual care provider 98point6 to provide on-demand telemedicine visits through the health plan’s app, with no patient copayment. The telemedicine services Premera describes are in line with those offered by many other plans, and are clearly positioned to connect the health plan’s network offering and benefit design with its own virtual care platform to directly appeal to consumers. Providers have expanded telemedicine services dramatically as the pandemic forced cancellation of nearly all non-emergent care. The rest of this year will surely bring a flurry of new offerings from health plans, retailers and other disruptors, setting up a telemedicine “land grab” as companies look to use virtual care as a channel to build deeper relationships with healthcare consumers.


GRAPHIC OF THE WEEK

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

Consumers trust providers but aren’t hearing from them

Last week, we reported that consumer healthcare confidence is down—it’s unclear when people will feel safe enough to return to reopened care sites. Recent polling data provided by our friends at Public Opinion Strategies, and detailed in the graphic below, shows that direct provider communication is crucial to reengaging patients and rebuilding their trust in seeking care. The majority of Americans receive health-related information from news media outlets, but only 18 percent say they regularly hear it from their doctors or providers—yet 66 percent of Americans view doctors and providers as highly trusted sources of information. Consumers are looking to providers to demonstrate and communicate a commitment to safe operations that are as “COVID-free” as possible. In particular, many patients would feel safe returning to a healthcare facility if their doctor assured them it’s safe to go. Health systems are taking myriad steps to provide COVID-safe care—staggering appointments, eliminating waiting rooms, screening temperatures upon arrival, providing masks, enhancing sterilization and testing at-risk patients—more communication about the specifics of their efforts, directly to patients, will be vital to restoring consumer confidence. (See more survey data gathered by Public Opinion Strategies here.)


THIS WEEK AT GIST—ON THE ROAD PHONE

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

Facing a reckoning on physician compensation?

As health systems take tentative steps to resume non-emergent procedures and office visits, it’s increasingly clear that volume will not quickly return to pre-COVID levels. According to a health system chief physician executive we spoke with this week, this has forced medical group leadership to reevaluate physician compensation, at least for the rest of 2020. “We’ve kept our doctors pretty much whole for the past three months,” she said, “but given the losses we’re facing for the rest of the year, we can’t keep it up much longer.” We’ve had a flurry of calls in the past two weeks with systems in the same position. Most of their doctors are primarily paid based on their productivity. “We all loved the upside opportunity,” mused one physician leader, “but we never thought something could happen that would completely wipe us out.” This point got us wondering whether we might be seeing the beginning of the end of RVU-based physician compensation, as physicians seek greater stability and safety. But moving to a salary-driven model is far from easy. How much upside are doctors willing to trade off for security? The survey data used to benchmark compensation, based on last year’s business model, is essentially irrelevant—and likely will be for next year as well. According to one consultant, “Given that there’s no consistency in volume or compensation strategy, the 2020 data will be garbage, too.” Not to mention, dramatically shifting the way doctors are paid has huge cultural and operational ramifications.

There are no easy answers, but we think this conversation about the future of compensation, and the larger issues it raises about doctors’ relationship to, and role in, the health system, is long overdue. One executive shared his system’s plan to pay their doctors 85 percent of their 2019 compensation through the summer. He’s not sure yet what the other side of August looks like. “Maybe we’ll have physicians who want to continue to be paid on productivity like a car salesman. But if you want that kind of upside now, the safety net likely won’t be there the next time.” However, he hopes this experience “provides a reset point that gets us to a more sustainable—and professional—way of working together for the future.”

Harnessing the vision of future healthcare leaders

For the past several weeks, we’ve spent our days talking to executives at member health systems across the country about what the world will look like moving forward—how to think about strategy and operations in the post-pandemic “Brave New World”. It’s been a fascinating set of conversations, and we’ve been struck by the optimism with which people are approaching the exercise, viewing this as a moment to advance much of the care transformation work that’s been difficult to accomplish in the “old world” of healthcare. But given the wide variation in where different parts of the country are on their coronavirus curves, senior executives come to the work in varying states of distraction: some are already spending most of their time on recovery planning; others are still largely absorbed with “incident command center” duties. Even for those who have mostly moved past the immediate crisis, it’s been difficult to balance the hard work of planning financial recovery and identifying cost reduction targets with taking a longer view of forward-looking strategy. One best practice we’ve seen: identifying future leaders of the organization and involving them in the future-focused work—after all, the discussion is about how the health system will look in three-to-five years’ time. Now’s the perfect moment for up-and-coming leaders to scrub in and share their perspectives on how tomorrow’s healthcare might be different, and better. It’s been energizing to work with these next-generation leaders—bringing their vision and enthusiasm for what’s possible will help ensure we don’t just fall back into our old habits once the virus is behind us.


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 John Gorman, chairman of social determinants of health-focused investment firm Nightingale Partners, ahead of what is likely to be an unusual Medicare Advantage open enrollment period. Gorman is looking to see what supplemental benefits insurers will offer seniors in light of continued COVID lockdowns.

Coming up next Monday, we’ll talk to Mayo Clinic’s Director of Business Integrity and Continuity, Dr. Erich Heneke. He’s responsible for planning for catastrophes like COVID-19, and managing the system’s supply chain. Heneke is working to secure precious COVID-19 equipment, while also procuring more traditional supplies as Mayo resumes elective care. 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 watched this instead.

There’s no television genre more prone to cliché than teen drama. All the familiar tropes—popularity contests, first loves, sexual awakening, leaving home, and so on—are often the stuff of lazy writing and scenery chewing, and can make the prospect of watching yet one more hormonally-saturated series seem pointless. Then along comes a show like Normal People, the BBC/Hulu adaptation of Irish writer Sally Rooney’s 2018 critically acclaimed novel, and suddenly what’s old seems fresh and important again. Across twelve brief episodes, the show follows the coming of age of two young lovers, whose unlikely high school romance follows them through their years at Dublin’s Trinity College. It’s a 19th century bildungsroman, almost Austen-esque—with class inversions, family baggage, and youthful self-discovery—but with a millennial sensibility and characters that aren’t just caricatures. Rooney’s story speaks to the chameleon-like experience of college, a place for trying on new identities while nostalgically holding on to earlier innocence, for experimenting with different ways of being and loving. Most remarkable, however, are the two young actors (Daisy Edgar-Jones and Paul Mescal) who portray Marianne and Connell, the on-again, off-again couple at the story’s center. Their chemistry creates a luminous melancholy that radiates through every scene, delivering a startling level of emotional and physical intimacy. It’s a frank, honest, and sometimes raw exploration of how we become who we are, and who we are to each other. You won’t want to binge Normal People—instead, you’ll find yourself holding on to each brief episode like a cherished memory of forgotten youth, lovely and sad.


WHAT WE’RE READING

Stuff we read this week that made us think.

Quantifying the massive blow to hospital volumes

Even after hearing dozens of reports from health systems about how steep their COVID-related volume losses have been, we were still floored by this analysis from healthcare analytics firm Strata Decision Technology, documenting a 55 percent drop in patients seeking hospital care across the country. The report, which analyzed data from 228 hospitals in 51 health systems across 40 states, found that no clinical service line was immune from steep volume losses. The graphic below shows volume loss by service line in March-April 2020 compared to the same period in 2019. Unsurprisingly, ophthalmology, gynecology, ortho/spine and ENT—all specialties with a high portion of elective cases, and heavily dependent on procedures—saw volume declines of greater than 70 percent. But even obstetrics and neonatology (which we expected to be “pandemic proof”) and infectious disease (which we thought might be busier in the throes of COVID-19) saw losses of 20-30 percent. Looking at specific procedures, complex elective surgeries like spinal fusion and hip and knee replacements were almost completely obliterated. Precipitous declines in encounters for chronic diseases like coronary heart disease and diabetes (down 75 and 67 percent, respectively) and cancer screenings (a 55 percent decline in breast health and a 37 percent decline in cancer care overall) point to the likelihood of worrisome disease exacerbations, and a future full of more complex patients. The volume losses, plus a 114 percent rise in uninsured patients, led to average two-week losses of $26.5M per health system across the study’s cohort. Strata will continue to track and publish volume changes, but this early snapshot paints a bleak picture of staggering financial hits, and “lost” patient care that will carry lasting ramifications for the health of communities nationwide.

Putting a pillar of the community in jeopardy

It’s easy to become numb to the numbers we’re bombarded with on a daily basis—case counts, deaths, financial losses, unemployment claims, bailout funding. An article from the Washington Post this week put a very human face on how the coronavirus crisis is playing out on the ground, profiling the experience of 115-bed Griffin Hospital in Derby, CT. We first got to know Griffin, and its CEO Patrick Charmel, years ago in the course of work for our former employer. It’s a remarkable, fiercely independent organization—recognized as the flagship hospital of the “Planetree” patient-centered care model, and a decade-long fixture on Fortune’s list of Top 100 Best Companies to Work For. But the COVID-19 wave hit Griffin hard, as it did much of Connecticut. With the high cost of caring for COVID patients, and lost revenue from cancelled procedures, Griffin has had to make hard decisions about furloughing and redeploying staff—incredibly difficult for a small facility that has been a pillar of the community for a century. Charmel has been able to secure some relief in the form of advance payment from Medicare, but his efforts to lobby for a share of the state’s allocation of CARES Act grant funding for hospitals proved unsuccessful, and so the future of the hospital—or at least its continued viability as an independent organization—is in jeopardy. In the words of Griffin’s chief financial officer, “This could be devastating for us.” As the recovery begins, and questions begin to be asked about the billions of dollars of “bailouts” paid to “greedy hospitals”—an easy narrative for the media to latch onto—it’s worth remembering what’s happening to Griffin Hospital, and to hundreds of other similar organizations across the country. Countless communities rely on these hospitals, and their survival is worth safeguarding.


That’s it for another “from-our-basements” edition of the Weekly Gist. Thanks so much for reading our work, and taking the time to share your comments and suggestions for future editions—we love hearing from you! If you’re so moved, please consider passing this along to a friend or colleague, and encouraging them to subscribe, and to check out our daily podcast.

A personal note: congratulations to Gist offspring and occasional intern Thomas Roades, who will receive his Master of Public Policy degree from the University of Virginia this weekend. Well done, lad! Welcome to the crazy world of healthcare.

As always, let us know if there’s anything we can do to be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

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

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

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