The Weekly Gist: The Viral Independence Day Edition

Happy 4th!

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

America celebrates a grim milestone

As the nation headed into the 4th of July weekend, the number of new COVID cases hit a string of daily highs, reaching a record high of more than 55,000 on Thursday. States across the South and Sunbelt, especially those that lifted stay-at-home orders early, saw the worst spikes. Florida broke a new record with more than 10,000 cases on Thursday, and Georgia also experienced a new daily high. Hospitalizations continued to rise sharply in several states as well. Many hospitals reported a shift in COVID admissions toward younger, otherwise healthy adults, reports borne out by the lower death rate than that experienced in the initial surge of cases in the Northeast. (Advances in the management of severely ill COVID patients have also brought death rates down.)

In a Senate hearing on Tuesday, top White House health advisor Dr. Anthony Fauci said that the US was “not in total control” of the pandemic, and predicted that daily new case counts could top 100,000 if more stringent measures are not taken. California, Florida, and other states took steps to roll back reopening efforts, and Texas Gov. Greg Abbott abruptly reversed direction and ordered a statewide mask mandate. Welcome news, but likely too late to prevent cities like Houston from exceeding available ICU capacity. Cases in the city have skyrocketed across the past month, with its positive test rate hitting 20 percent yesterday; its cancer and children’s hospitals began admitting COVID-positive adults to provide added capacity. With celebrations scheduled across the nation this weekend, including another large event today at Mount Rushmore to be attended by President Trump, where masking and social distancing will be optional, it seems certain that we will continue to reap the whirlwind of careless behavior and hasty reopening for the rest of this month and beyond. And looming in just six weeks—students return to schools and colleges. US coronavirus update: 2.7M cases; 130K deaths; 33.5M tests conducted.

HHS to extend COVID-19 public health emergency

With COVID cases surging in many parts of the country, the Department of Health and Human Services (HHS) announced via tweet this week that it intends to extend the COVID-19 public health emergency for 90 days beyond its current July 25th expiration date. The American Hospital Association and other provider groups have been urging HHS to renew the emergency—for the second time—as it undergirds several important payment policies and regulatory changes currently in place. These include waivers of telehealth restrictions, a 20 percent boost to Medicare reimbursement for COVID patients, requirements that insurers cover COVID testing without cost-sharing, and increased federal Medicaid matching rates. (Importantly, some of the other key changes made to help healthcare providers during the pandemic, like the ability to deliver care in alternative settings and temporarily enroll out-of-state providers, are in place due to the separate Stafford Act national emergency declaration.)

The longer these temporary HHS policies remain in place, the harder it will be to roll them back—particularly those that are consumer-facing, like telehealth. HHS is likely assessing which telehealth changes should remain in place after the national emergency ends from both a cost-savings perspective and as a result of growing pressure from patients, providers, and telemedicine vendors. Case in point: CMS proposed a rule last week that would permanently loosen restrictions on home health providers’ use of telehealth. Health systems and physicians should plan their COVID-era virtual care investments with an eye toward longer-term platform development and integration—whether or not HHS ultimately makes emergency changes permanent. In our view, delivering care virtually will prove critical for building consumer loyalty well beyond the pandemic.

Another red state votes to expand Medicaid

Voters in Oklahoma narrowly approved a ballot measure that will require the state to expand Medicaid as part of the Affordable Care Act (ACA), making it the first state to expand the program since the beginning of the coronavirus pandemic. By a razor-thin margin of 50.5 percent to 49.5 percent—just 6,488 votes separated the two sides—Oklahoma became the fifth “red state” to approve Medicaid expansion by ballot measure, joining Idaho, Nebraska, Maine, and Utah. State Question 802, as the ballot measure was known, requires the state to expand eligibility for Medicaid by July 1, 2021 to include uninsured adults that earn up to 138 percent of the federal poverty level. About 200,000 additional Oklahomans will be covered by the program, at a cost of about $164M to the state—a 25 percent increase in coverage for only 2.7 percent more money than the state currently spends on Medicaid. That leverage is thanks to the 90-10 split in funding for the expansion population between the federal and state governments under the ACA, which critics argue will shift over time as the federal budget deficit grows. Ironically, despite the fact that the “Yes on 802” campaign was largely framed as an initiative to save rural healthcare, 70 of the state’s 77 counties opposed the expansion, with voters in Oklahoma City and Tulsa providing the votes needed for the win. Whatever the politics of Medicaid expansion, the vote comes at a time when Oklahoma’s unemployment rate is 12.6 percent, and the state is experiencing a significant spike in COVID cases and hospitalizations. The “yes” vote will be welcome news for the state’s low-income residents, who are disproportionately impacted by the virus.

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

Meeting growing consumer demand for “care anywhere”

While COVID-19 provided a big push for doctors and health systems to rapidly expand telemedicine visits and other kinds of remote patient interactions, many report that they are now seeing telemedicine visits decline sharply, as in-person visits return. While it’s natural to be glad that “things are returning to normal”, backing off virtual care is short-sighted, as recent experiences have set new expectations for patients. Survey data shows consumers like using telehealth services, both because they’re more convenient (65 percent) and help avoid COVID infection (63 percent)—and 51 percent say they would continue using them after the pandemic ends.

We’re increasingly convinced that virtual physician visits are just one part of a continuum of care that can be delivered in the convenience and safety of the patient’s home. The graphic below highlights the range of consumer-focused virtual care solutions, from asynchronous chat interactions all the way to hospital care delivered at home. Health systems that can deliver “care anywhere”—an integrated platform of virtual services consumers can access from home (or wherever they are) for both urgent needs and overall health management, coordinated with in-person resources—have an unprecedented opportunity to build loyalty at a time when consumers are seeking a trusted source of safe, available care solutions.

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

A brewing physician-health system disconnect

We’re hearing from medical groups around the country that in the past few weeks, office visit volumes have quickly approached pre-COVID levels. Some are even busier, running at 110 percent of their February volumes, or more. At the same time, practice has become more stressful, with doctors balancing virtual care with in-person visits, new safety procedures slowing operations, and staff and patients worried about COVID exposure. Everything feels different, and irrespective of the number of patients on today’s schedule, all of the changes make a physician feel like she’s working harder than before. A chief clinical officer from a Midwestern health system relayed the discord this has created when discussing incentives: “Our doctors were fully on board with the need to reduce salaries back in April, so we all took a 15 percent pay cut through the summer. Now that they’re busy again, they want to be bumped back to 100 percent. But the system’s financial picture hasn’t changed.” The growing disconnect between how hard many staff are working and the economic reality of the system isn’t unique to doctors. But physicians, most of whom have their compensation tied to individual productivity, may feel it more acutely. While there are no easy solutions, it’s critical to discuss this disconnect openly, rather than letting resentment fester under the surface. The pandemic has brought to light the brittleness of health system and physician practice finances. Prescient systems will use this moment to work with their doctors to rethink practice and align compensation with the financial success of the system, while meeting doctors’ needs for stability and security.

The turbulent experience of flying in the COVID era

After 107 days on the ground, we took our first flight this week to meet with a member executive team on the West Coast. The experience was nerve wracking and surreal—almost nothing about flying felt the same as before the pandemic. Frankly, the most stressful part of the journey was not the flights, but the time spent at airports before boarding. We traveled through Charlotte-Douglas, LAX, and Reagan National—in descending order of alarming lack of masking. Less than a third of people in Charlotte were wearing masks, and given the crowds (similar in size to a slow day before the pandemic), social distancing was next to impossible. The flights themselves were about 80 percent full (though we flew on American Airlines just before they announced plans to lift capacity restrictions), and everyone wore masks. Or at least made an attempt to—it’s shocking how many people weren’t wearing the mask properly, letting it rest below their nose. Passengers have also figured out they can skirt the mask rules by slowly nursing a drink and bag of snacks for several hours.

More worrying, the flight crew presented a safety problem. Upon boarding, one of our Alaska Airlines flight attendants openly complained that she didn’t like wearing masks—both she and a colleague had their masks down, exposing their noses and mouths, during the entire boarding process. While she made the gesture of pulling it up after being asked, she didn’t keep it there for long. She wore it around her chin for most of the flight, even when pouring drinks. Mid-flight, the pilot also emerged from the cockpit without a mask. The disregard among the flight staff was alarming: what hope is there of enforcing mask policies and other COVID safety measures among passengers if airline staff fail to follow their own guidelines? (When we reported the experience to customer service, the knee-jerk response was to suggest the employees may have a health condition preventing mask-wearing. But if that’s the case, perhaps they shouldn’t fly, just as a nurse wouldn’t be allowed in the operating room if she couldn’t wear a mask for the duration of surgery.)

All things considered, we’ll probably fly again for important member meetings. But we’ll be cautious and nervous every time. The idea of flying for leisure, however, is off the table. Moreover, this experience demonstrates that the FAA’s policy of letting the airlines set their own rules is creating an inconsistent experience that’s less safe for passengers. Alaska Airlines announced this week that it plans to “yellow card” passengers who won’t wear a mask. We’ll be avoiding flying them, or any airline, unless we’re assured that noncompliant staff face the same consequences as passengers.

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 Chuck Stokes, partner at Relia Healthcare Advisors and former CEO of Houston-based Memorial Hermann Health System. He said COVID-19 has exposed the fragmented relationship between the acute care and public health systems. Post-pandemic, he expects to see accelerated retirements among providers, which will exacerbate workforce shortages.

Note to listeners: Our podcast will be on holiday hiatus next week. Make sure to tune in Monday July 13, for a week of “best of”—our favorite conversations with healthcare innovators. The regular podcast will return with new episodes on July 20th. Alex wishes everyone a safe and happy July 4th holiday!

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What we’ve been writing about this week on the Gist Blog.

Is it Time for Hospital at Home?

Spoiler alert: yes. We think it’s time health systems reexamine the decades-old hospital at home model for the COVID era, both to meet emerging consumer demand for care outside the hospital setting, and to provide new flexible capacity for future pandemic surges. Click here to read our thoughts on the model and let us know if you’d like to discuss it further with our team!

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

What you really need for this 4th of July weekend is mindless fun—something to make you forget the neighborhood barbeques, community parades, and fireworks shows that you’re avoiding like…well…the plague. Just in time, there’s a new movie from the reigning king of mindless fun, Will Ferrell. There’s an argument to be made that Farrell, known for his one-note, man-child characters, hasn’t made a good movie since 2004’s Anchorman (or maybe 2003’s Elf). More to the point, he’s made the same movie over and over again—Ron Burgundy is Chazz Michael Michaels is Ricky Bobby, and on and on. His latest, Eurovision Song Contest: The Story of Fire Saga is standard Ferrell fare, with one big exception that makes it well worth catching on Netflix this weekend. The plot centers around Ferrell and Rachel McAdams as Iceland’s entrants in the legendary, pan-European television phenomenon that is Eurovision. There’s loads of tasteless sex jokes, predictable pratfalls, and obvious stereotyping of the tiny Scandinavian country. But the song parodies…just wow. Ferrell and company capture with pitch-perfect accuracy the absolutely bonkers world of Eurovision, and the bombastic and bedazzled hyper-pop acts that compete in Europe’s annual songfest—so over the top they beggar belief. Suffice to say you’ll be humming the tune to “Jaja Ding Dong” for days afterward. If nothing else, the movie is a great primer on Eurovision for the uninitiated—don’t stop with Ferrell, but take some time to dig into YouTube’s trove of actual acts from the contest, which first made ABBA famous. (Personal favorites: Ukraine’s 2007 “Dancing Lasha Tumbai”; Finland’s 2006 “Hard Rock Hallelujah”; Romania’s 2013 “It’s My Life”). Even if we can’t travel to Europe at the moment, there’s every reason to invite these silly Euro acts into our living rooms during lockdown. Enjoy!

We said it, they quoted it.

“Michigan Hospitals Still Expect to Lose Millions After $850M in Federal Coronavirus Funds”
Detroit Free Press; July 1, 2020

“By the end of June, Henry Ford will likely have lost $500 million because of COVID-19…It happened across the country, said Chas Roades, co-founder and CEO of Gist Healthcare, a Washington-based advisory firm that works with health systems.

‘What happened is the leg of the stool that was funding the hospital operations, the leg of the stool that pays for most of the profitability, got yanked out in those weeks,’ he said.

Roades estimates that federal funding will backfill 40% to 50% of losses for the nation’s hospitals. Hospitals will continue to make cuts, and that may include staff, as they also struggle to return to pre-COVID patient loads, he said.”

Stuff we read this week that made us think.

Why our “starved” public health system was unprepared for COVID-19

The American public health system has long been considered one of the best in the world, but decades of underfunding have left states and counties woefully ill-equipped to handle the worst pandemic in a century. An extensive analysis by Kaiser Health News and the Associated Press found that over the past ten years, per-capita spending by state and local public health departments has dropped by 16 and 18 percent, respectively, leaving our public health system “underfunded and under threat, unable to protect the nation’s health”. Public health departments are mandated to provide a laundry list of critical functions, from restaurant inspections and water testing to immunizations. But over time, many of these functions have been privatized, and staff and budgets reduced. Both were cut further as state budgets tightened.

The federal government has extended $13B in emergency funding, but many local public health departments have still been forced to furlough workers during the pandemic. Citing comparisons to the funding extended during other crises like Zika and the H1N1 influenza, experts are concerned that baseline budgets will continue to decline. Moreover, public health workers face unprecedented cultural challenges, and are often disrespected by political and clinical leaders. And as public health workers are putting themselves at risk of COVID exposure just to do their jobs, many face resentment and anger from angry citizens who blame them for the policies they are charged to enforce—with some local public health leaders even resigning due to threats and intimidation. The current crisis has shown that we need a more expansive, and better coordinated public health infrastructure. Getting there will require not just more investment, but repairs to the foundation of this critical national asset.

Slow the spread, save the economy—mask up

If Americans don’t believe public health officials or medical researchers, perhaps they’ll believe Wall Street. A new analysis released by the investment bank Goldman Sachs this week argues that implementing a national mask-wearing mandate is “worth” about 5 percent of US gross domestic product (GDP). Performing a regression analysis of reported masking behavior among residents of states with state-level mandates, as well as infection rates following the mandate implementation, Goldman’s analysts found that mask mandates result in a 25 percent reduction in the growth rate of infections, as well as a decline in COVID fatalities. The analysis estimates that implementing a national mandate would increase the percentage of people who wear masks by 15 percentage points, with larger impact in states that currently have low levels of mask compliance. Goldman Sachs had previously constructed an “effective lockdown index”, estimating that the coronavirus pandemic subtracted 17 percent from US GDP between January and April. Given spikes in COVID infections across Sun Belt states, the analysis found that avoiding potential lockdowns by instead implementing a mask mandate could avoid a further 5 percent decrease in GDP. Both the Centers for Disease Control (CDC) and the World Health Organization (WHO) recommend that the general public wear masks, and a growing body of scientific research indicates that masking significantly reduces the spread of COVID. Now the bankers have weighed in. We don’t know who still needs to hear this, but please wear a mask when you’re out and about this holiday weekend. Please.

Most importantly, please 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