COVID-19’s Impact on the United States Healthcare Ecosystem
The COVID-19 pandemic has permeated across the entire spectrum of healthcare, from exacerbating healthcare accessibility issues in America to impacting the supply and demand of care. Throughout our COVID-19 series, we will provide a high-level overview across patients, payers, and providers to assess the lasting impacts of the pandemic.
This article will attempt to answer these questions:
· How have macro trends influenced utilization?
· How care delivery evolved from the traditional model?
· How are new, non-traditional players are leaning into this new opportunity in healthcare
· How will this change the trajectory of US healthcare going forward?
Future installments of the series will take a deeper look into patient experience, health equity, and economics of payer reimbursement.
Health Care Utilization Changes
Consumers view and prioritize care differently because of the COVID-19 pandemic. COVID-19 brought a wave of fright and hesitancy to schedule in-person office visits, even when considering a routine examination. It created new challenges for payers and barriers for providers, such as shifts in healthcare utilization due to financial implications, risk of exposure by visiting a facility, and overall capacity challenges.
Increased Uninsured Population
Millions of Americans lost their jobs because of COVID-19. Over 49% of the United States’ total population receives employer-sponsored health insurance. (5.9% non-group, 19.8% Medicaid, 14.2% Medicare, 1.4% Military, and 9.29% uninsured¹). With most insurance coverage coming through employers, losing employer coverage significant impacted ability to render effective care. Seeking medical care already takes an emotional toll, and the concern around payment for care compounds this emotional stress and uncertainty. There are different coverage options for consumers who lose their employer-sponsored insurance, but the application and enrollment process can be challenging or even unaffordable, even with subsidies. Extended unemployment benefits can reduce the extent of forgone care due to financial constraints, but those eligible may not know about different coverage options or even seek such coverage. The health consequences of uninsured Americans are far worse than the insured due to accessibility constraints and because they forgo care altogether.
Risk of Exposure
Many patients do not take the time to schedule and physically pursue care until their health conditions become serious. Scheduling annual check-ups or other forms of preventative care fall low on the average person’s priority list. Despite all providers of the care spectrum encouraging patients to seek preventative care, such as primary care providers sending out annual check-up reminders, insurance companies sharing “no cost to the patient” care options, and even pharmacy retailers encouraging to get the flu shot, COVID-19 has magnified the challenge of getting patients to seek such care. Many patients do not want to risk exposure from a visit and thus, health care utilization has dropped significantly over the past year.²,³
Regardless of if providers assure the safety of their patients and frontline staff (sanitization equipment, socially distant, mask wearing, health assessments), the fear of exposure may deter care for new and/or concerning symptoms.
Provider Operating Challenges
Both from a demand and supply side, we have seen health systems postpone surgeries to preserve capacity during surges of COVID-19 patients. Facilities scaled back operations for outpatient visits and elective surgeries to take on additional COVID-19 patients.⁴ Traditional care delivery needs to be augmented to keep up given these implications from the pandemic — examples include anchoring on the patient experience and meeting consumers where most convenient. The industry is re-thinking accessibility and the acceptance of telehealth by patients, providers, and payers has accelerated.
The Rise of Telehealth and Access to Healthcare Post COVID-19
Policy makers, insurers, and health systems are looking for ways to increase accessibility and deliver care to patients at home to limit transmission of the virus. The need for dependent, convenient, and affordable care reigns more important than ever. Telehealth addresses this current need and is expediting the paradigm shift away from solely in-person care. The pandemic has influenced healthcare policy, supply and demand of telehealth, and reimbursement across our communities.
Federal Legislation
The federal government temporarily loosened licensing, electronic prescribing, and written consent laws to allow more patients to access telehealth services during the COVID-19 pandemic. Some states loosened licensing requirements for telehealth providers. For example, Pennsylvania suspended licensing requirements to allow licensed practitioners in other states to provide telehealth services to Pennsylvanians without needing a license to practice in the Commonwealth for the duration of the COVID-19 emergency.⁵
Market Landscape
The funding pool to build and scale telehealth organizations grew exponentially over the last year and a half. The telehealth space includes segments like telemedicine, telepharmacy, and remote monitoring and diagnostics. Funding for these companies rose for the fourth consecutive quarter, growing 17% QoQ and 169% YoY to reach a record high of $5B across 163 deals in Q2’2021.⁶ Hospitals and health systems use telemedicine applications to connect clinicians with specialists when working on complex cases or when additional expertise and support is required.⁷ Integrating remote monitoring and digital therapeutics into providers’ care models is essential in care coordination and will improve overall performance.
Finally, the Centers for Medicare and Medicaid Services has added 160+ new current procedural terminology (CPT) codes to its list of services payable under the Medicare Physician Fee Schedule⁸ As a result, many payers have increased the coverage for telehealth services for visits they previously would not have covered to take advantage of this opportunity.
Other Considerations
Expansion of telehealth and increasing accessibility to care across the country comes with a multitude of logistical challenges. Though most cities already have broadband available, the speed might not be fast enough to handle multiple people in a home trying to work, study, and stream entertainment simultaneously — a common scenario during the coronavirus pandemic. In general, telehealth tends to be more affordable than an in-person office visit. However, the cost also can be more expensive than lower-income residents can afford.⁹
The Future of Care Delivery
Healthcare management and preventative care are essential to optimal patient care. To successfully deliver better healthcare outcomes, the patient, the provider, and the payer must coordinate within an ever-expanding care delivery model. Companies who can support this comprehensive outlook of care will be the most successful in the near-term future. Achieving better health outcomes at a lower total cost of care while improving the patient experience is extremely difficult to achieve.¹⁰
Today, traditional pharmacy retailers are expanding their sphere of care. Pharmacy retailers, such as Walgreens and CVS, are evolving from solely dispensing medications to providing total patient care and expanding into other health care services (e.g., diagnostic testing).¹¹ Diagnostic testing provides timely information to inform clinical decisions, which results in more data-driven clinical support to lead to higher-quality care. Testing also identifies underlying health issues, facilitating faster speed-to-therapy and avoiding unnecessary high-cost care visits. These pharmacies can leverage the pharmacist and/or collaborative practice agreements to support both chronic and specialty disease state management. Additionally, retailers can leverage their existing footprint across the country to their advantage. Going to your local pharmacy is much more convenient than scheduling an appointment through a traditional office visit. The convenience and lower-cost provider factors will continue to drive how health care delivery is redesigned.
Providers know that having a frictionless patient experience is integral to adherence and overall willingness to work with the healthcare system. Studies show that positive patient experience is linked to improved health outcomes. Understanding patients’ expectations and ensuring positive experiences will help pharmacies and other healthcare providers deliver personalized care and prepare their businesses for future success.¹²
Concluding Thoughts
The COVID-19 pandemic tested our healthcare system to the core. It applied pressure on our hospitals and providers, instilled urgency to expand reimbursable services, and accelerated the redesign care delivery. The disruptors that find the most success will be those who can keep up with the pace of this rapidly changing environment and with evolving customer expectations.
SOURCES
7. https://www.beckershospitalreview.com/lists/260-telehealth-companies-to-know-2020.html
8. https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes
10. http://www.ihi.org/Engage/Initiatives/TripleAim/Pages/default.aspx
11. https://www.drugtopics.com/view/future-pharmacy-chains
12. https://www.mckesson.com/Blog/Pharmacy-of-the-Future-Personalized-Care/
Meet the Author:
Katie Li is a Senior Consultant in Slalom Chicago’s Business Advisory Services practice. Find her here on LinkedIn.
Slalom is a modern consulting firm focused on strategy, technology and business transformation. Our healthcare and life sciences industry teams partner with healthcare, biotech and pharmaceutical leaders to strengthen their organizations, improve their systems, and help with some of their most strategic business challenges. Find out more about our people, our company and what we do.
