COVID-19 May Permanently Shake Up Healthcare

While the ongoing COVID-19 pandemic continues to reshape healthcare in the short-term, the industry may also see several long-term changes once the emergency ends. For example, many providers not dealing with COVID-19 patients have adopted telemedicine to serve their patients. While the technology has been around for years, its adoption by providers, patients, and payers has been slow. With the pandemic forcing all parties to use the model for the time being, it is likely that telemedicine will gain a foothold in the market that will not fully disappear once the pandemic passes. Its long-touted benefits, including less waiting, quicker care, and greater availability to those who lack transportation, will likely convert many people, at least partly, to the telemedicine model.

The pandemic is also threatening Medicare’s years-long effort to transition from fee-for-service to quality-based models of reimbursement. A recent survey shows over half of risk-based Accountable Care Organizations (ACOs) may drop out of the program in fear of significant financial losses stemming from the COVID-19 crisis. The ACO program is one of the key features in the Affordable Care Act designed to reshape healthcare financing and cut costs. However, such a large decrease in participation could cripple the ACO program, which is already on shaky footing due to it showing little promise in cutting costs or increasing quality so far. 

Medicare tried to ease ACOs fears by announcing they will not use health data from the first half of 2020 in their calculations. However, this has provided little comfort according to the National Association of ACOs. The group expressed concern that the system may collapse without further changes to ensure ACOs are not unfairly punished for lower than expected quality scores due to the pandemic.

Another welcome, but less likely long-term change is that the pandemic leads to a concerted effort to decrease the administrative burden healthcare providers face. Through the industry’s struggle to respond to the pandemic with adequate supplies, hospital beds, and staff, we have seen how the administrative burden in healthcare, be it credentialing, high operating costs, billing, Medicare quality reporting, EHR, etc., takes time and resources away from other priorities that can be better leveraged during a health emergency. While seemingly unlikely, there exists the possibility that this experience will motivate the industry and government to streamline and eliminate some of these burdens, giving them the resources and flexibility they need in the future.

Sadly, recent directives by the government dampen these hopes. For example, the government’s extension of the submission window for 2019 MIPS data from March 31st to April 30th, while good-intentioned, shows a lack of focus on priorities. The small change does little to help an industry that must currently focus all of its attention and resources on treating COVID-19 patients and/or surviving the financial distress caused by nation-wide shutdowns.