Over the past several weeks, one question in particular has been top of mind for many healthcare systems: how will utilization change in a post-COVID world?

By now, we know that we will continue to live with this virus for years to come. As such, we will surely endure periods of shut down, as well as the need to limit face-to-face visits to help protect vulnerable populations. Change is continually happening and, unfortunately, we won’t be able to stay in a holding pattern as we wait for a vaccine. 

The Continued Decline of Face-to-Face Interactions

For healthcare systems that operate in a fee-for-service model, drops in utilization have resulted in significant financial strain. Emergency departments (ED) have been hit especially hard, and the sustained loss of utilization has had a significantly negative impact on their bottom line.

Many patients, out of fear of being exposed to the virus, have elected to stay at home and many will continue to do so. It’s well known that a significant number of emergency department encounters are avoidable, and the virus proved that point. 

However, there have no doubt been many instances in which patients should not have stayed home and should have sought medical attention. A patient who works as a cashier in a grocery store and doesn’t have stable housing or an established primary care doctor may avoid the ED with a headache today, but without some type of intervention, she may not be able to avoid a diabetes-related hospital stay in the months or years to come. Healthcare systems will almost assuredly have tens of thousands of patients just like this. 

Current Obstacles for Health Systems

It is unlikely that utilization rates will rebound back to pre-COVID numbers while the number of virus-related deaths continues to climb. So, what can healthcare systems do to stay financially viable? How do they ensure that patients are cared for when emergency departments were how they primarily accessed care? How can healthcare systems plan for future events that are being shaped now? 

Healthcare systems, already struggling, will not be able to operate long term in these volatile conditions. As we know, EDs can’t be turned off and on like a light switch. They are able to manage ebbs and flows; but maintaining the staff and infrastructure for a persistently empty ED on a fee-for-service basis is simply not sustainable. A healthcare system needs reliable revenue in order to care for patients – and patients want and need care. Regardless of the appetite for change, the emergency department and other parts of the system as we know it may not look the same in the future.   

For years, healthcare systems, health plans, and providers have developed and deployed clinical programs, strategies, and interventions to curb avoidable ED or inpatient utilization. From a population health perspective, even modest success is a double-edged sword for a healthcare system. On one hand, the system wants to decrease avoidable utilization or shift care to more appropriate settings; but on the other hand, they need to meet revenue targets, which are negatively impacted when patterns of utilization change and there isn’t an alternative payment model (APM) in place.

Value-Based Care as an APM

As COVID continues to transform the entire healthcare industry, healthcare systems now need to figure out how to care for patients outside of a traditional model and find alternative revenue streams while continuing to care for their communities who are affected by the pandemic. That is a tall order. This is one of the many reasons it can be difficult to meaningfully shift to a value-based care model.

Prior to the pandemic, the majority of providers and healthcare organizations wanted to and were moving toward value-based care. Most have contracts that tie their revenue to performance measures; but the proportion of those was limited. To take it to the next level, operating in a near complete value-based model requires significant operational capabilities (e.g., clinical, financial, etc.). It also requires the ability to manage at the provider level in order to manage cost and quality. This may sound easy enough, but it is still an area that in which healthcare systems commonly struggle.

While the pandemic forced the industry to immediately re-think the mechanism by which most care was delivered (e.g., face-to-face, telehealth, etc.), it doesn’t solve the problems that have plagued the healthcare system for years – inappropriate utilization, poor outcomes, disjointed care, etc. Telehealth is an incredible tool, but it isn’t a silver bullet. It needs to be part of a healthcare provider’s broader population health strategy.

Where Do We Go from Here?

Significant decreases in utilization of traditional service lines, such as the emergency department, may accelerate the move to alternative delivery and payment models accelerating an organization’s move to value-based care. Healthcare systems, already stretched thin, will need to revisit their population health strategy to prioritize efforts and plan for our “new normal”.

As the pandemic continues to change the way in which care must be provided, GHG’s subject matter experts stand ready to assist you in developing your population health strategy. To start the conversation, contact Kate Rollins, Senior Vice President of Population Health and Clinical Innovations at GHG.