"Perhaps the most substantive change to the delivery of health care during the COVID-19 pandemic has been the broad expansion of telehealth services," writes Yehuda A. Sugarman of the AACU.
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The coronavirus disease 2019 (COVID-19) has changed all aspects of our daily lives. Even as vaccines are rolled out and a possible light has emerged at the end of the tunnel, the impacts on our health care system will linger for months, perhaps years.
Providers have been forced to adapt to changes brought about by federal mandates, state directives and guidance, and economic realities. Some of the shifts in the delivery of medicine were already underway before the pandemic, such as the move to value-based care and increased demand for telehealth services, but those shifts have been accelerated by the public health emergency (PHE).
Fear of exposure to COVID-19 and widespread loss of health insurance coverage due to job losses, among other reasons, has resulted in sharp declines in patient visits and elective procedures. It will likely take years and/or a significant federal policy change to bring the millions of workers who lost their employer-sponsored coverage back into the commercial insurance system.
This article will address the 3 health care trends that seem most likely to continue in 2021 or until the millions of jobs with health benefits return and the threat of contracting COVID-19 has subsided.
Continued demand and access to telehealth
Perhaps the most substantive change to the delivery of health care during the COVID-19 pandemic has been the broad expansion of telehealth services. Greater flexibility in telehealth policies provided by federal, state, and commercial payers has provided a mechanism for medical care to be delivered safely and conveniently.
By and large, physicians and patients alike have embraced the changes, leading policymakers at all levels to push for at least a partial continuation of the policies that have allowed telehealth to gain popularity during the pandemic. By the end of 2020, about half of all U.S. states had passed legislation extending telehealth waivers beyond COVID-19.
According to a TransUnion Healthcare report from November, a strong majority of patients (67%) said they would be at least somewhat likely to continue utilizing telehealth once a COVID-19 vaccine became available. The report also showed that 71% of patients felt the quality of care they received via telehealth was the same as or better than in-person medical care.
Health care providers appear to be equally interested in continuing to offer telehealth services. A Mayo Clinic/MITRE survey of providers conducted last summer found that nearly 70% were motivated to expand their usage of telehealth because of their experiences with it during the pandemic.
As more people are vaccinated and the pandemic slows, the utilization of telemedicine will continue to decline as it has already from its peak during the first few months of the PHE. But utilization will almost certainly remain higher than it was pre-pandemic, particularly for patients who have difficulty traveling to physician offices due to distance or disability.
Urology patients, many of whom fall into a high-risk category for COVID-19 due to their age or chronic medical conditions, could be more inclined to wait longer before returning in-person to their physicians’ offices. Indeed, a study out of Germany last year found that nearly 85% of urology patients preferred a telehealth visit over a face-to-face consultation.
Ultimately, the ability of providers to continue offering telemedicine to their patients will depend, in large part, on the continuation of state and federal regulations, as well as commercial payer policies, that have authorized fair reimbursement for telehealth services provided during the PHE.
Accelerated shift to value-based care
The sudden and steep decline in elective procedures last year caused a major financial hit to providers, especially those dependent upon the traditional fee-for-service reimbursement model. Practices that participated in shared-risk financial models, however, had much more success remaining solvent during COVID-19 lockdowns as revenue remained more consistent.
The pandemic has helped shift the notion that joining value-based payment arrangements requires taking on significant downside risk. With patient visits still considerably lower than pre-COVID levels, some providers who participate in fee-for-service models that reward physicians based on patient volume are rethinking the concept of risk.
Additionally, government entities, strained by the economic toll of the pandemic, are exerting more pressure to reduce health care spending, which can be achieved by a move toward value-based care (VBC) contracts. Last year, the Centers for Medicare & Medicaid Services (CMS) announced its intent to accelerate mandatory bundled payment models and is aiming to transition 100% of Medicare providers into 2-sided risk arrangements by 2025.
Commercial payers are moving in the same direction. In September, CareFirst, the mid-Atlantic’s largest not-for-profit health care insurance company, and MedStar Health, the region’s largest not-for-profit health care provider, announced that the organizations are partnering to offer value-based health care “to improve affordability, accessibility, quality, and the patient experience for the communities they collectively serve”. Other health systems are actively seeking similar payer-provider partnerships.
With the new administration committed to closing racial and ethnic disparities and gaps in health care coverage, there are likely to be incentives over the next 4 years for providers to adopt alternative payment models that are more successful at closing those gaps and more closely tying health care costs to outcomes as opposed to volume.
Continued attrition of commercial plan payers
A study published this past October found that 7.7 million US workers had lost their jobs because of the COVID-19 pandemic. Despite steps taken by policymakers to shore up employer-sponsored health insurance, an estimated 15 million Americans (including workers’ dependents) lost their coverage—one of the greatest losses of health coverage ever recorded.
The result has been a steady migration to government-run programs, like Medicaid, CHIP, and the ACA insurance exchanges, which reimburse providers at much lower rates. The rise in Medicaid patients and self-pay patients will continue to pose a financial strain on providers who rely upon margins from commercial insurance to offset costs from government-funded programs and uncompensated care.
According to a 2017 analysis from the American Medical Association, for an average physician practice with approximately 43% of revenue coming from commercially insured patients and 17% coming from Medicaid patients, each 1% shift of commercial enrollment to Medicaid, exchange, and uninsured coverage will result in an estimated .26% loss in aggregate revenue.
Data from Inovalon’s MORE2 Registry indicates that the rates Medicaid Managed Care Organizations pay for the top 10 urology codes average about 58% of what commercial payers reimburse for the same services. Medicare Advantage plans reimburse on average at 66% the rate paid by commercial payers for those urology codes (based on 2019 Medicare FFS spending).
A strong economic recovery in the latter half of 2021 could lead to more churn in the insurance markets as people are rehired and regain their employer-sponsored coverage. But so far, employers have shown reluctance to hire back at full capacity, particularly full-time employees with health benefits. Additionally, some of the jobs that come back, even at full-time, will no longer offer health insurance.
One additional factor that may impact the distribution of enrollees in commercial vs government-run plans is if, and to what extent, Congress provides aid to state and local governments whose revenues have been decimated by the pandemic. If the economic turmoil lags on and the federal government does not step in to stabilize state budgets, states may be forced to reduce their number of Medicaid and exchange enrollees.