As a result of COVID-19, the American healthcare industry is on track to experience more than $200 Billion in financial losses through June 30, 2020. As the industry urgently seeks solutions - the recent, rapid embrace and deployment of telehealth holds one key to tackling hospital revenue cycle deficiencies and securing healthcare’s long-term financial health.
One agonizing irony of the COVID-19 crisis has been its impact on the American healthcare industry. Health systems and hospitals have stepped up to build and staff temporary treatment facilities. They have ingeniously overcome shortages of personal protective equipment and ventilators. Doctors, nurses and other caregivers have given their all - at great personal risk - to care for the sick and dying. In these and so many other ways, this episode in our history has been one of healthcare’s finest hours.
At the same time that Americans are celebrating the heroism of our healthcare industry, the COVID-19 crisis has driven the industry into a financial crisis. According to analysis just published by the American Hospital Association (AHA), the effects of COVID-19 hospitalization costs, cancelled and forgone services, added costs for the purchase of PPE and costs for support to workers is estimated to amount to $202.6 Billion for the four months March through June. For many, these financial losses are in addition to already precarious financial circumstances.
These effects have begun to moderate as COVID-19 case counts pass their peak and states allow providers to resume elective and other nonessential procedures. And although losses for many have been reduced by funding through the CARES Act and accelerated payments and incentives from Medicare/Medicaid, the financial damage wreaked by the crisis will take a long time to overcome.
Patients are struggling financially too. Long before the crisis began, patients’ financial access to care had become a growing problem. Because of high deductible health plans and copays, according to one report, as many as one in four Americans were either avoiding or delaying care because of concerns about personal, out-of-pocket costs.
Americans’ concerns about cost have certainly only gotten worse. According to a report published by the Kaiser Family Foundation, “Between March 1 and May 2, 2020, more than 31 million people had filed for unemployment insurance”, going on to estimate that, “nearly 27 million people could potentially lose employer-sponsored insurance and become uninsured following job loss.”
The report goes on to explain that the majority of these individuals should be eligible for Medicare/Medicaid or Affordable Care Act subsidies, but points out that “Even before the coronavirus crisis, there were millions of people eligible for Medicaid or marketplace subsidies who were uninsured.” In our opinion, that phenomenon will be even more prevalent following this crisis.
“Never Let a Crisis Go to Waste”: COVID-19 Lessons to Remove Inefficiencies, Restore Financial Performance Starting Now
Just as patients’ reluctance to seek care because of cost existed before the current crisis, healthcare revenue cycle has long suffered from a wide variety of systemic inefficiencies. This is particularly true in the discipline of patient revenue cycle, where our company, Loyale, operates. For healthcare providers, the industry’s rapid development of telehealth solutions in response to the crisis holds the key to tackling these chronic, often overlooked, revenue cycle inefficiencies.
Prompted by stay-at-home rules and consumer demand; and supported by temporarily expanded reimbursement policies from Medicare/Medicaid, the rapid implementation of telehealth digital care delivery has met with widespread approval by providers and patients alike.
In a story from Healthcare Finance News, pointing to growing demand for congressional action to make Medicare’s telehealth reimbursement changes permanent, Emory Healthcare is called out for the “velocity with which they made this change. …They went from zero telemedicine appointments to over 4,000 a day.” The story goes on to quote Sarah Kier, Emory’s vice president of patient access for physician group practices saying, “some things won’t work for telemedicine, but for the things that do work our patients and providers would love to see it continue post-COVID.”
It’s simple, really. By delivering appropriate healthcare on a safe, compliant platform to anyone with Internet access, everyone wins. Providers maintain patient volumes and their associated revenues while delivering intimate, one-on-one care experiences and patients stay safe and comfortable in their own homes.
The same principle also applies to the financial dimension of the provider - patient experience. By scaling and standardizing patient revenue cycle systems using a digital patient engagement platform, health systems and hospitals can reduce or eliminate unnecessary expenses, cutting costs by millions. These often-overlooked expenses may include:
- Merchant fees for credit card collections,
- Processing, shipping and handling of paper statements,
- Audits and management to ensure PCI and other regulatory compliance,
- Aged patient receivables due to billing errors and patient confusion
- Early-out and other revenue cycle vendors that purchase patient debt,
- Multiple billing statement cycles,
- FTE-intensive client and staff support functions, and
- Outsized costs associated with synching separate operations such as acute and ambulatory care.
In total, healthcare spends a lot - we think too much - to collect balances from their patients.
Like telehealth, digital patient engagement allows healthcare providers to interact intimately with patients, but at scale. By delivering personalized financial experiences that align with patients’ medical experiences, providers upgrade overall patient care and save themselves millions. Perhaps best of all, savings can be achieved almost immediately. By shifting embedded patient revenue cycle costs to a patient financial engagement partner, providers can begin to experience positive operational and financial outcomes in as little as 90-days.
Following the COVID crisis, there is little doubt that healthcare providers will face a new kind of normal. This crisis is teaching us useful lessons for what that “normal” might look like. Regardless of when or whether congress acts to extend Medicare’s telehealth reimbursement policies, we’re convinced that digital patient engagement is here to stay. Trends in patient behavior and preferences will support it, and the imperative for healthcare to operate more efficiently than ever will demand it.