Presented by
Health Care Advisory Board
Nearing the peak of the outbreak, or just a deceleration?
Anatomy of an Outbreak: Part 5
April 16, 2020
© 2020 Advisory Board • All rights reserved • advisory.com
Today’s Research Expert
Christopher Kerns
Vice President, Executive Insights
Christopher oversees all senior executive research
at Advisory Board, and is responsible for developing
the research perspective, official point of view, and
overall Advisory Board message to executives from
across the health care sector.
[email protected] @CD_Kerns
© 2020 Advisory Board • All rights reserved • advisory.com
6
Coronavirus cases in the United States
96 million cases
4.8 million hospitalizations
480,000 deaths
Original estimates of
possible effects
At least 606,800 cases
202,208 cases in New York
At least 25,922 deaths
Current COVID-19 cases
Current as of April 15, 2020
Advisory Board interviews and analysis.
Source: “Coronavirus Disease 2019 (COVID-19) in the US,” CDC,
March 11, 2020. “One slide in a leaked presentation for US hospitals
reveals that they’re preparing for millions of hospitalizations as the
outbreak unfolds,” Business Insider, February 27th, 2020.
© 2020 Advisory Board • All rights reserved • advisory.com
7
1
10
100
1000
0 5 10 15 20 25 30 35 40 45 50
Number of days since 3 daily deaths first recorded
Spain
Italy
U.S.
South Korea
U.K.
France
Germany
2000
1. Current as of 04/15/2020.
Source: Bernard S et al., “Coronavirus Tracked: The Latest Figures as the
Pandemic Spreads,” Financial Times, 2020; Roser M et al., “Coronavirus
Disease (COVID-19) – Statistics and Research,” Our World in Data, 2020.
Death tolls nearing a peak in U.S. and Western Europe?
Advisory Board interviews and analysis.
Daily coronavirus deaths (rolling 3-day average), by number of days since 3 daily deaths first recorded1
Country Total deaths
per million
Spain 385
Italy 349
France 235
U.K. 182
U.S. 80
Germany 39
South Korea 4
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8
1
10
100
1000
0 5 10 15 20 25
Number of days since 10 total deaths recorded
Michigan
New York
IllinoisLouisiana
Florida
California
Massachusetts
1. Current as of 04/15/2020.
Source: “We’re Sharing Coronavirus Case Data for Every U.S. County,” The
New York Times, 2020; Katz J, “How Severe Are Coronavirus Outbreaks
Across the U.S.? Look Up Any Metro Area”, The New York Times, 2020.
Daily deaths plateauing in New York City…
Advisory Board interviews and analysis.
Daily coronavirus deaths (rolling 3-day average), by number of days since 10 total deaths first recorded1
…But not yet peaking in other states
City Total deaths
per 100,000
Detroit 223
New Orleans 165
NYC 157
Boston 91
Miami 69
Seattle 54
Chicago 31
Los Angeles 9
© 2020 Advisory Board • All rights reserved • advisory.com
9
Source: COVID-19 Projections, The Institute for Health Metrics, April 1, 2020.
Resources and capacity expectations two weeks earlier
Prior projections painted a grim picture
Advisory Board interviews and analysis.
Projected ICU bed shortage and dates of peak resource use by state
April 7 - April 18 April 19 - May 2 May 3 - May 16 May 17 - May 30
41 0
16
0
00
22
47829 0
357
108
207
1,506
194 0 0
0
0
32166
625
58
643
247
2,269
78363
25
792210
159122
222
6098
25
93
10,602
114
810
21
123
MD: 465DE: 73NJ: 814CT: 123RI: 80
DC: 168
MA: 652
States with greatest predicted
peak ventilator demand
States with least predicted
peak ventilator demand
New York
Tennessee
Texas
Michigan
Florida
Vermont
Wyoming
North Dakota
Alaska
South Dakota
9,055
2,318
1,975
1,798
1,594
27
53
59
60
72
Updated April 1, 2020
© 2020 Advisory Board • All rights reserved • advisory.com
10
Source: COVID-19 Projections, The Institute for Health Metrics, April 8, 2020.
Access to resources and capacity varied widely a week ago
An extraordinary mobilization of resources
Advisory Board interviews and analysis.
Projected ICU bed shortage and dates of peak resource use by state
April 1 - April 7 April 8 – April 14 April 15 – April 21 April 22 – April 29
0 52
0
0
00
0
00 0
0
0
12
372
0 0 0
0
0
00
0
0
282
0
0
00
0
00
159350
330
0
0
5,173
0
00
12
25
MD: 281DE: 0NJ: 2,109CT: 1,258RI: 258
DC: 0
MA: 1,596
States with greatest predicted
peak ventilator demand
States with least predicted
peak ventilator demand
New York
New Jersey
Massachusetts
Florida
Connecticut
Vermont
Delaware
Idaho
New Hampshire
Wyoming
5,008
2,189
1,592
1,323
1,153
13
14
20
24
26
Updated April 8, 2020
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11
Source: COVID-19 Projections, The Institute for Health Metrics, April 15, 2020.
Challenges ahead, but progress across the board
Today’s projections much more optimistic
Advisory Board interviews and analysis.
Projected ICU bed shortage and dates of peak resource use by state
March 28 - April 6 April 7 – April 16 April 17 – April 26 April 27 – May 5
0 0
0
0
00
0
00 0
0
0
0
303
0 0 0
0
0
00
0
0
218
0
0
00
0
00
000
00
0
0
4,854
0
00
0
0
MD: 0DE: 0NJ: 1,372CT: 1,351RI: 198
DC: 0
MA: 1,522
States with greatest predicted
peak ventilator demand
States with least predicted
peak ventilator demand
New York
Massachusetts
New Jersey
Connecticut
Florida
Wyoming
Vermont
Alaska
Montana
North Dakota
5,246
1,671
1,665
1,290
968
13
12
7
7
5
Updated April 13, 2020
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12
1. Due to data reporting lags, the daily hospitalization rate is unknown.
Source: Dwyer, J., “What Doctors on the Front Lines Wish They’d Known a Month
Ago,” The New York Times, April 14, 2020; Total Daily COVID-19 Hospitalization
Rates, NYC Health Department, April 15, 2020; “Begley, S., “With ventilators running
out, doctors say the machines are overused for Covid-19,” STAT, April 8, 2020;
Fewer patients intubated as we learn more about COVID-19
Ventilators not the panacea we once thought
342
512
642
973
12141270 1290
1440
1633
1356
1612
1239
43 54
93120
176
237223
296283
309
172
8457 21
Net change in intubations and new hospitalizations in NY Initial lessons about COVID-19 from the front line
COVID-19 appears to decrease oxygen
saturation to critically low levels, but patients
do not demonstrate shortness of breath,
confusion, or heart abnormalities
COVID-19 can create acute respiratory
distress syndrome and immune cells attack
the lungs, filling them with yellow fluid and
limiting oxygen transmission from the lungs to
blood even if a ventilator pumps in oxygen
Risks from intubation (cognitive and
respiratory damage from heavy sedation)
don’t outweigh the little data to support
ventilation in COVID-19 patients 20.5%
Ratio of new
hospitalizations
to net intubations
on March 31
6.7%Ratio of new
hospitalizations
to net intubations
on April 8
Advisory Board interviews and analysis.
Daily hospitalizations Net change in Intubation
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13
Are we finally testing enough? (Probably not)While test numbers are increasing, positivity rates indicate insufficiency
Source: The COVID Testing Project, https://covidtracking.com/, updated April 15, 2020; Our World in
Data, https://ourworldindata.org/covid-testing, updated April 15, 2020.
1. As of April 15; “last week” data includes April 1-7, “this week” data includes April 8-15
2. Since beginning of outbreak. Figures based on most recently available data as of April 15. Data sources and methodology vary by country.
COVID-19 tests performed in United States to date1 COVID-19 positivity rate by state (%)This week and percent change from last week1
Last week This week
Total tested 2,054,462 3,138,413
Total positive 392,594 605,243
Overall positivity rate 19.1% 19.3%
COVID-19 positivity rate by country2
United Kingdom
United States
Italy
Canada
Iceland
South Korea
Australia
Taiwan
Vietnam 0.2%
2.0%
1.7%
0.8%
4.7%
5.9%
14.9%
19.3%
29.4%
NA = Not available
AK 5.0 72%
AL 9.7 -35%
AR 7.1 20%
AZ 11.5 25%
CA 10.5 28%
CO 21.2 -4%
CT 36.9 2%
DC 22.9 30%
DE 22.2 66%
FL 10.2 -6%
GA 19.2 -31%
HI 2.0 -47%
IA 13.8 34%
ID 7.3 -46%
IL 23.2 3%
IN 17.5 -20%
KS 11.4 -1%
KY 15.5 288%
LA 12.0 -61%
MA 28.7 15%
MD 23.1 28%
ME 3.7 NA
MI 34.4 28%
MN 6.3 37%
MO 10.3 -4%
MS 6.8 11%
MT 3.6 -32%
NC 7.5 -22%
ND 3.2 0%
NE 10.3 56%
NH 10.6 -20%
NJ 54.5 4%
NM 6.5 48%
NV 12.5 -12%
NY 39.8 -15%
OH 13.9 17%
OK 4.8 -39%
OR 4.8 -9%
PA 25.5 28%
RI 16.0 37%
SC 11.1 50%
SD 22.1 166%
TN 6.5 -12%
TX 11.0 1%
UT 5.7 8%
VA 20.1 47%
VT 5.1 NA
WA NA NA
WI 9.3 -6%
WV 4.6 44%
WY 3.0 -46%
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14
1. National Institutes of Health
Progress yet to be made before promise of antibody tests can be realized
Serology testing slowly starting up
Projection Graphic and Layout Guide
Few FDA-approvals, fewer high-throughput tests1
10,000People across the U.S. the
NIH1 is recruiting for study
using antibody tests
38,000Beaumont Health employees
in study on health care
worker susceptibility and
antibody response
Presence of antibodies doesn’t guarantee immunity 2
Serology tests measure antibodies
(IgG and IgM) in a person’s blood and
can reveal true community spread
Challenges with antibody tests for COVID-19
High threat of false positive
makes development of accurate
tests challenging
1FDA-approved, high-throughput
serology test from Ortho Clinical
Diagnostics
Large-panel antibody studies underway
"We simply don't know yet what it takes to be
effectively protected from this infection."
Dawn Bowdish, Professor Pathology and Molecular
Medicine, McMaster University
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15
Combination of technology and boots-on-the-ground required to mitigate spread
Our needs extend beyond diagnostics
Projection Graphic and Layout Guide
Disease surveillance system Widespread contact tracing
Apple and Google devices to wirelessly
exchange personal testing data, notify user
of contact with infected for those who opt in
Aggregate biometric data from
internet-enabled thermometers and
fitness wearables
Screen for pre-symptomatic
employees through employer-
sponsored testing services
Train idled workers from PeaceCorps
volunteers to furloughed public employees,
and phone bank staff as contact tracers
Who is contagious and how do we stop their spread?
Technical feasibility and debate over health privacy laws to
shape extent of surveillance and methods of contact tracing
© 2020 Advisory Board • All rights reserved • advisory.com
16
1
Unclear how well Bluetooth will work,
especially in crowded spaces2
Low adoption rates could limit efficacy
3Needs strong testing capacity to
determine positives
4System could amplify false positives or
be prone to bad actors
5 It could come too late
1. 2020.
Source: Kimmell J, Angers J, “5 Reasons Apple and Google's Contact-Tracing
Project Isn't a ‘Silver Bullet' for Covid-19”, Advisory Board, April 14, 2020.
However, new tool unlikely to be a ‘silver bullet’ for COVID-19
Apple and Google undertake massive contact tracing project
[Insert program name interviews and analysis.]
Uses anonymized Bluetooth
smartphone infrastructure to alert user if
they have been within close proximity
(~6 ft) of an infected person
How their tool will work
PHASE 1 (mid-May1)
Users can download third-
party apps from state-level
health agencies to participate
Users can opt in directly on
their phones, eliminating
need for app download
PHASE 2
Timeline
Significant limitations may hinder success
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17
Health systems must balance tradeoffs in ensuring sufficient PPE to reopen
Imperfect solutions to a critical problem
Sustainable
scale
Major safety and cost considerations
Timeliness
Procure steady stream
of new disposables
Do I have stable,
reliable vendors?
What is the price premium
for guaranteed delivery?
Sanitize and
reuse disposables
Does sanitization break
down protective materials?
How many times can we
safely reuse?
Spectrum of options for obtaining PPE needed to reopen non-essential services
Use DIY products
from local businesses
and volunteers
Are we compromising on
individual safety?
Can we scale and sustain?
Shift to medical-grade
reusable products
How can we encourage design
and manufacturing of medical-
grade, reusable masks?
What are added costs for
procurement and cleaning?
Advisory Board interviews and analysis.
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18
As surge subsides, staffing challenges will take center stage
[Insert program name interviews and analysis.]
Immediate post-COVID staffing challenges
Frontline staffing
shortage
Senior leader
burnout
Long-term staffing unknowns
How will COVID impact organizational
culture—positively or negatively?
Will COVID impact health care’s
desirability as a profession?
Source: Advisory Board interviews and analysis.
Furloughed staff
(dis)engagement
Environment ripe for
unionization
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19
Moderate COVID-19 scenario entails immediate cash crunch
For most, new revenues won’t backfill loss of electives
Moderate, concentrated COVID-19 scenario
• 1,000-bed system treats 2,000 hospitalized COVID-
19 cases over 3 months
• Peak of 440 cases in week 8 (i.e. system is surging
significantly beyond normal capacity)
• Average revenue per COVID-19 case: $15,506
$31.0 M in COVID-19 revenue
Note the revenue shortfall in the first weeks of the
scenario—if elective shutdowns and reduced
demand precede significant COVID-19 caseload,
even by a few weeks, cash flow challenge will be
immense and immediate.
The COVID-19 caseload needed to make
up for lost revenue from elective procedures
and other reduced demand is well beyond
system capacity—implying need for large
surge expenditures
Advisory Board interviews and analysis.
Wild cards
• Actual DRG mix of IP cases
• Further changes to payment rates, including by
commercial payers
-$14
-$12
-$10
-$8
-$6
-$4
-$2
$0
Lost Revenue from Cancellations/Delays COVID-19 Revenue
Re
ven
ue
re
lative to
base
line,
mill
ions
Weekly revenue impact, 3-month scenario
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20
COVID-19 Elective Surgery Cancelation Impact Estimator
Assess the financial impact of canceling elective procedures
Advisory Board interviews and analysis.
Estimate financial impact from
COVID-19
• Postponed surgeries
• Canceled surgeries
Incorporate customizable inputs
• Varying time frames
• Crisis acuity levels
• Capacity scenarios
• Past facility volumes and capacity
Plan accordingly for future
operations
• Lost revenue
• Potential future gained revenue
• Future capacity levels
To access the top COVID-19 resources,
visit advisory.com/covid-19
© 2020 Advisory Board • All rights reserved • advisory.com
21
Source: Influenza Hospitalization Surveillance Network, The Centers for Disease Control, April 14th,
2020; Rodriguez-Leor, et al, Impacto de la pandemia de COVID-19 sobre la actividad asistencial en
cardiologia intervencionista en Espana, Revista Espanola de Cardiologia, April 2, 2020.
Social distancing and fear of COVID keeping people away from health care
COVID-19 impacting non-elective utilization
5.2 5.5
4.8
3.6
2.7
4.6 4
2.7
1.1
0.2 0.1
29-Feb 7-Mar 14-Mar 21-Mar 28-Mar 4-Apr
2018-2019 2019-2020
Growth rate of laboratory confirmed influenza
hospitalizations in the U.S.
1,247
429
644
258
PCI STEMI
February 24 - March 1 March 16 - March 22
Number of cardiology interventions in Spain
before and during COVID-19 epidemic
Conditions that could require higher intensity care if people delay medical attention
Advisory Board interviews and analysis.
Acute myocardial
infarction
Stroke and vascular
pathologies Cancer
Fractures and other
orthopedic trauma
© 2020 Advisory Board • All rights reserved • advisory.com
22
1. As of April 14.
Source: HHS.gov. “CARES Act Provider Relief Fund,” April 13, 2020. Hancock, Jay, et al. KHN. “Furor Erupts: Billions Going To
Hospitals Based On Medicare Billings, Not COVID-19,” April 13, 2020. CMS. “Press Release CMS Approves Approximately $34
Billion for Providers with the Accelerated/Advance Payment Program for Medicare Providers in One Week,” April 7, 2020.
Grant amounts determined by Medicare share, not Covid or financial distress
Initial federal distribution: speed vs. need
CARES ACT allocates $100B to hospitals
First tranche: details announced April 10
• $30B being disbursed as grants to hospitals based on national
share of 2019 Medicare FFS volumes
• Health systems have 30 days to electronically sign terms and
conditions including no balance billing of patients
• Amount paid to hospitals does not take COVID-19 volumes or
acuity of volumes into account
• Systems with low Medicare volumes, high uninsured/Medicaid
population see limited benefit
Future tranches
• HHS says further tranches will focus on areas seeing
significant volumes, the costs of treating uninsured patients,
rural hospitals
• 20% bump to Medicare reimbursement rates for COVID-19
and related diagnoses
Accelerated and Advance Payment
Program offers loans
Program designed to speed cash flow in time
of public health emergency
CMS agreed to speed approval from
3-4 weeks to 4-6 days
Hospitals able to request Medicare
payment amount for 3-6 months
Has approved 21,000 applications1
up from 100 applications total across
past five years
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
23
Source: HHS.gov. “CARES Act Provider Relief Fund,” April 13, 2020.
Advanced payment plan incentives tend to further value-based goals
Commercial payers also adjusting policies, offering grants
United Healthcare
• Will accelerate and advance payments to medical and
behavioral care providers
• Also providing $125M in small business loans to clinical
operators with whom OptumHealth is partnered
Blue Cross and Blue Shield of Michigan
• Will accelerate payments to more than 40 physician
organizations that are a part of the Physician Group
Incentive Program (PGIP), including more than 20,000
primary care and specialist physicians in the state
Blue Shield of California
• Will provide up to $200M in direct financial support to
providers including financial guarantees, advance
payments, and contract restructures with favorable
repayment terms
• Working with two financial institutions to assist providers
with loans and payment advances on expected costs
CASE STUDIES
• Requires insurers to waive patient cost-sharing for
COVID-19 testing
Families First Coronavirus Response Act
Health systems should confirm each payers’ policies as well as
State regulations for the following:
• Cost-sharing for COVID-19 treatment: United, Cigna,
Aetna, Humana, many of the Blues
• Preauthorization waivers for COVID treatment: policies
vary greatly payer to payer
• Out-of-network transfers: policies vary greatly payer to
payer
Advanced payment programs tend to:
• Focus on physician practices
• Tie payment to cost and quality metrics
• Use funds previously tied to value-based programs
Advisory Board interviews and analysis.
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24
1. See full list of Covd-10 codes in blog post, How to bill for Covid-19 testing and treatment
Source: Rae, M., et al. “Potential Costs of Coronavirus Treatment for People with Employer
Coverage.” Peterson-Kaiser Health System Tracker. Peterson-KFF, March 13, 2020.
Accurate payment hinges upon revenue cycle performance
Critical action items
Update chargemaster with new
COVID-19 CPT/HCPCS codes
Create EMR flag to allow easy
identification of COVID-19
charts
Documentation and coding
Claims Billing
• Ensure sufficient number of billers able to work from home with remote access
• Clarify policies with state, commercial payers
• Consider billing small batch of claims to see how COVID-19 adjudication works
before more widespread billing
• Review claims to prevent balance billing and evaluate out-of-pocket costs being
billed to patients
• Train coders, CDI on new CPT and HCPCS codes, ICD-10 for diagnosis1
• Retain strongest CDI specialists for documentation rather than redeploying bedside
to ensure full CC/MCC capture
• Create documentation templates specific to COVID-19
• Deploy clear processes and revisit expectations around performance metrics, such
as:
‒ Holding charts until positive test confirmed
‒ Recalibrate query rates given MD workload
‒ Adjust number of chart reviews per day expectations according to volumes
DATA SPOTLIGHT
Range in cost of treatment per
COVID-19 patient depending on
documented case severity
$9.7K – $20.3K
Advisory Board interviews and analysis.
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25
Patient financial experience still critical to revenue capture
Patients under immense financial pressure Adjust patient financial strategy to ensure those
that can pay, want to pay
Depending on payers’ policy, patients
may have significant obligations from
COVID-19 and other types of care
Skyrocketing unemployment means
increased self-pay population
Pandemic taking place earlier in
calendar year means deductibles
haven’t been met
Reassign/deploy surplus front office staff
toward eligibility checks to check/recheck
insurance status of all patients
Update payment guidelines and publicize
widely1
Extend length of payment plans
Offer 30-60 days payment deferment
1. Suggestions: website, patient portal, recorded call center hold message, call center scripting, etc.
Modifications to current policies increase likelihood of grateful patients
Advisory Board interviews and analysis.
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26
Assessing potential admission bumps in a post-COVID world
What will “normal” look like?
Complications from non-
elective procedures that
people delayed
Return of elective
procedures that were
postponed during COVID-19
Admissions from viral
infections if people’s
immune systems are
weakened from isolation
Surge of COVID-19
cases after social
distancing is lifted
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
27
Many providers will be constrained in ability to recapture, serve all backlogged cases
Volume recovery not just about turning the lights on
For Internal NNI Purposes Only, Not for Dissemination or Detail
When do we reopen
this service?
How many patients
leave the queue?
What is our post-COVID
capacity for this service?
How is post-COVID demand
for this service different?
• Safety
• Legal restrictions
• PR concerns
• Financial pressure
Longer shutdowns mean a
larger backlog of unserved
deman
For any service, recapturing and serving deferred demand depends on a four-part analysis:
Attrition in the backlog
transforms revenue delays
into actual losses, but
opportunity to attract
others’ “impatients” exists.
Providers with excess capacity
in normal times, or those that
can extend hours or otherwise
“surge,” will clear backlog
faster, avoid dropoff, and
potentially attract new share
Lower new demand would
make it easier to clear backlog,
but difficult or impossible to
sustain pre-COVID volume
• Self-resolving issues
• Care plan changes
• Defections to competitors
that open earlier, especially
asymmetric actors
• OR capacity
• Staff, especially
specialized surgeons
• PPE
Limiting factors will vary widely
across services.
• Lingering fears of visiting health
care facilities (-)
• Economic stress (-)
• Poorly managed conditions (+)
• Durable shifts in modality (e.g.
telemedicine) (+/-)
Implications
© 2020 Advisory Board • All rights reserved • advisory.com
28
Speed of recovery will vary based on multiple factors
When will utilization get back to “normal”?
High impact Low impactMedium impact
Near-term
Long-term
Medium-term
State and federal orders continue to
prohibit elective procedures
Manufacturers increase availability of
PPE and tests, increasing comfort and
readiness among patients and staff
Backfilled cases lead to bed and
operating room capacity constraints,
shifts to “higher capacity” competitors
Lingering consumer anxiety/fear of
exposure to infection results in site of
care shifts or absolute reductions in use
Loss of insurance and/or job results in
delays or cancellations
Delays in care lead to exacerbation of
health issues
Closed ambulatory sites delay and/or
reduce downstream referrals
Positive experiences with telehealth
encourage first-time users to use virtual
care for future needs, possibly with
competing organizations
Lasting negative stigma of SNF sites
leads to longer LOS, less bed turnover,
and greater home health use
Regulatory flexibilities regarding scope
of practice, licensure, and SNF 3-day
stays are left in place until a vaccine is
developed, expanding capacity
Employers/plans manage premium cost
growth by increasing consumer cost
exposure for next year’s benefit year
Loss of clinical workers who were
furloughed, laid off, or quit limit capacity
Organizations proactively reach out to
patients to reschedule appointments;
effectively communicate re: safety
The availability of therapeutics and
vaccines reduces the probability of a
second Covid-19 wave—and need for
additional postponements
Reduced travel leads to less accident-
induced trauma
Mortalities in highly affected regions
reduces demand
Patients become more activated in
preventive health
Decreased utilization Increased utilization
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
29
1. After restart of elective surgeries (i.e. 3 months)
Clearing backlog depends on boosting supply, avoiding defection
Recovery will be a race to serve before others do
For Internal NNI Purposes Only, Not for Dissemination or Detail
Inpatient surgery scenario:
• 1,000-bed health system performing 40 inpatient surgeries per day, 6 days per week, at 80% of max capacity.
• 50% of IP surgeries considered elective
• All elective surgeries cancelled for 3 months; no cancellations of non-electives.
If supply remains at pre-crisis levels, and no patients
leave the queue for competitors or otherwise…
Time to clear queue1: Cases lost from queue:
25 weeks 0
If supply remains at pre-crisis levels, but 5% of
patients drop out of the queue each week…
Time to clear queue1: Cases lost from queue:
13 weeks 677
If maximum capacity is 20% LOWER post-restart for 8
weeks, and 5% of patients leave the queue each week…
Time to clear queue1: Cases lost from queue:
18 weeks 883
If maximum capacity expands by 20% after restart until the
queue is cleared, and 5% of patients leave queue weekly,
Time to clear queue1: Cases lost from queue:
8 weeks 556
© 2020 Advisory Board • All rights reserved • advisory.com
30
The top 16 open questions we’re looking at now
Advisory Board interviews and analysis.
How will COVID-19 impact…
…the demographic makeup of
the US—and future demand?
…demand for behavioral
health services?
…the purchaser landscape
and the nation’s payer mix?
…employers’ health benefits
strategies?
…the future of value-based
care and risk-based payment?
…perception of government’s
role in health care?
…site-of-care shifts, including
to virtual channels?
…the U.S.’ approach to post-
acute and long-term care?
…the competitive landscape
efforts to “disrupt” the industry?
…expectations about U.S.
health care capacity?
…public perception of
industry stakeholders?
…future fundraising and
philanthropy efforts?
…perceptions of the value of
systemness and scale?
…the structure of the U.S.
health care supply chain?
…the future of the clinical
workforce?
…the pharma, device, and
tech innovation pipelines?
© 2020 Advisory Board • All rights reserved • advisory.com
31
Today’s focus
Advisory Board interviews and analysis.
How will COVID-19 impact…
…the demographic makeup of
the US—and future demand?
…demand for behavioral
health services?
…the purchaser landscape
and the nation’s payer mix?
…employers’ health benefits
strategies?
…the future of value-based
care and risk-based payment?
…perception of government’s
role in health care?
…site-of-care shifts, including
to virtual channels?
…the U.S.’ approach to post-
acute and long-term care?
…the competitive landscape and
efforts to “disrupt” the industry?
…expectations about U.S.
health care capacity?
…public perception of
industry stakeholders?
…future fundraising and
philanthropy efforts?
…perceptions of the value of
systemness and scale?
…the structure of the U.S.
health care supply chain?
…the future of the clinical
workforce?
…the pharma, device, and
tech innovation pipelines?
© 2020 Advisory Board • All rights reserved • advisory.com
32
62%
35%
33%
31%
30%
26%
26%
22%
1. Society for Human Resource Management.
Source: Fronstin P, “The Impact of the Recession on Employment-Based Health Coverage,” Employee Benefit Research Institute,
May 2010, https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_05-2010_no342_recssn-hlthbens.pdf?sfvrsn=26db292f_0;
“The Post-Recession Workplace: Competitive Strategies for Recovery and Beyond,” Society for Human Resource Management,
September 2010, https://blog.shrm.org/sites/default/files/reports/SHRM%20Post%20Recession%20Workplace_FINAL-sm.pdf.
But unlikely to be the main strategy this time
Employee cost sharing a favorite lever in the last recession
Advisory Board interviews and analysis.
Blunt: HDHPs lead to delays and reductions
in all care below the deductible, including
preventive care
Limited: HDHPs do not encourage price
shopping for services above the deductible
Increase employee share of health coverage costs
Combine leave into PTO bank
Reduce pension plans
Reduce retirement contributions
Reduce health coverage for dependents
Eliminate paid relocation
Reduce leave annual carryover
Reduce leave accruals/balances
Likely employer benefit changes post-recession (2009)
Percent indicating likely or very likely to make
or keep changes after economy recovers
n=329 HR professionals from a random sample of SHRM member companies
Shortfalls and challenges with cost sharing
Unpopular: HDHP enrollment has generally
leveled off over the last four years
Apathetic: Less generous health
benefits risk public backlash after a
health-induced economic downturn
How will COVID-19 impact employers’ health benefits strategies?
© 2020 Advisory Board • All rights reserved • advisory.com
33
1. Individual coverage health reimbursement account.
Employer actions will depend on financial health and public policy pressure
Two paths forward: public coverage or intense management
Public coverage off-ramp Creative micromanagement
Rely on the Medicaid safety net:
• 37 states (and DC) have adopted expansion
• 4 states in current legislative battles
Employer
Benefits
Strategy
Actively shift employees to Marketplaces:
• Stabilizing premiums and increasing number
of carriers per county
• New options (e.g. ICHRAs1) for employers to
offset costs while providing benefits support
Lobby for public coverage
expansion or replacement?
Advisory Board interviews and analysis.
High-touch navigation support
Forced
steerage
Reference
pricing
Network
alignment
• HMO gating
• Virtual visit-
based triage
• Second
opinion service
• Value-based
cost sharing
• Advance price
information
• Hyper-narrow
networks
• Dedicated (or
owned)
providers
© 2020 Advisory Board • All rights reserved • advisory.com
34
Source: FiveThirtyEight, How Americans View The Coronavirus Crisis And Trump's Response, April 2020. Kaiser Family
Foundation, Public Opinion on Single-Payer, National Health Plans, and Expanding Access to Medicare Coverage, April 2020
COVID-19 is likely to become the central focus of the race for the presidency
A presidential election in the midst of a pandemic
How will COVID-19 impact public perception of government’s role in health care?
American’s split on Trump’s COVID response
Approval of President Trump’s response to the
coronavirus pandemic
30%
50%
70%
3/1 3/11 3/21 3/31 4/10
Approval Disapproval
35%
34%
10%
15%
6%
American opinion of public option
Majority support Biden’s public option proposal
Somewhat
favor
Strongly
favorSomewhat
oppose
Strongly
oppose
No response April 14
Disapproval: 48.6%
Approval: 47.8%
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
35
Source: Morning Consult, 41% of Public More Likely to Support Universal Health Care Amid Pandemic, March 2020.
APCO, Resilience in the Face of Challenges: America’s Healthcare System, April 2020.
Public wants gov’t to play larger role in coverage and emergency preparedness
Cries for both more—and less—government intervention
Less government involvement More government involvement
Hospitals’ financial and resource challenges
laid bare by the crisis offer an argument
against replacing private insurance with
government plans that have lower
reimbursement
Percent of survey respondents who said that
the pandemic has made them more likely
to support universal health care, in which
all insurance was provided by the
government
Percent of survey respondents that want the
government to ensure that private
companies are meeting the public
demand for medical equipment to combat
the COVID-19 crisis
41%
89%Regulations that have burdened
providers for years are being loosened to
accommodate COVID response–may be
little enthusiasm to bring them back after the
pandemic
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
36
COVID brings renewed focus to the health care industry Could perception of the industry change like it did after 9/11?
Source: “Fewer in U.S. See Health System as Having Major
Problems,” Gallup, December 2, 2019; Business and Industry Sector
Ratings, Gallup, August 14, 2019
DATA SPOTLIGHT
How health care industry
is rated by consumers,
compared to 25 other
major industries
23rd/25
Advisory Board interviews and analysis.
How will COVID-19 impact public perception of industry stakeholders?
0
10
20
30
40
50
60
70
80
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
% State of crisis/ major problems % Minor problems/ no problems
Negative view of health system mostly holds steady
Is the U.S. health care system today in a state of crisis, has major problems,
has minor problems, or it does not have any problems?
n= 1,015 adults in all 50 states
49%
63%
37%
© 2020 Advisory Board • All rights reserved • advisory.com
37
Early polling indicates span of changing perceptionsProviders and provider organizations get early boost for COVID response
Clear early winners
Source: “Resilience in the Face of Challenges:,” APCO Worldwide, April 2020; Coronavirus Response: Hospitals Rated Best, News Media Worst, March 25,
2020;Most Americans are confident hospitals can handle the needs of the seriously ill during COVID-19 outbreak, Pew Research, March 26, 2020
Advisory Board interviews and analysis.
Clinicians
68% have a more positive view
of providers because of how
they’ve reacted to the crisis
Neutral (but trending positive)
Pharmaceutical companies
48% have not changed their
perception based on the COVID
crisis
However, those who did change their
perception of health plans or pharma are
two-times more likely to feel more positive
Negative change in perception
Hospitals and health systems
65% have a more positive view
of hospitals and health systems
because of how they’ve reacted
to the crisis, 88% approve of how
they are responding to COVID
Health plans
55% have not changed their
perception based on the COVID crisis
Post-acute
Just 54% say they at least somewhat
confident that nursing homes in their
area can handle the needs of seriously
ill people during the outbreak
The Guardian
“'We're living in fear': why US nursing
homes became incubators for the
coronavirus”
Wall Street Journal
“One Nursing Home, 35 Coronavirus
Deaths: Inside the Kirkland Disaster”
© 2020 Advisory Board • All rights reserved • advisory.com
38
Longer-term changes likely more nuanced Actions taken by individual organizations will dictate perception in coming months
• Following mandated
infection control
measures
• Home health serving as
an alternate care site
• Getting PPE to staff
• Only accepting COVID-
negative patients with
multiple tests
• Failing to communicate
with families
• Large losses in staff
volume due to infection
Hu
rt p
erc
ep
tion
Health systems Health plansClinicians
• Executive pay cuts
• Lower-than-expected
death rates
• Stepping up amid gov.
inaction
• Fighting to secure PPE
Pre
dic
ted
im
pa
ct
He
lp p
erc
ep
tio
n
Pharma Post-acute
• Staff cuts/ furloughs
• Aggressive billing for
COVID patients
• Vocal clinicians upset
about response
• Care rationing/
restricting end-of-life
visitation
• Medical volunteers
stepping up in hard-hit
areas
• Media highlighting
clinician’s plights
• Hero narrative
• Patients blaming
clinicians for inability to
get tested/ treated
• Possible decline in
patient relationship over
telehealth
• Being blamed for COVID
deaths
• Waiving COVID cost-
sharing, treatment costs
• Facilitating advanced
provider payments
• Cutting telehealth copays
• Promoting Medicaid
• Self-funded employers
choosing not to cover
COVID treatment
• Slow prior-auth1 process
for moving COVID
patients
• High patient bills
• Future premium increases
• Quickly developing a
COIVD treatment
• Forgoing patent
exclusivity
• Collaborating across
organizations
• Bad side effects of a
treatment/ vaccine
rushed to market
• Price gouging/ attempts
to patent vaccine
• Fumbling vaccine rollout
• Blamed for FDA delays
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
39
Erosion of Medicare cross-subsidization taxes nursing facility model
$216
Average SNF revenue per patient day
CY 2019
Reliance on Medicare cross-subsidization
leaves SNFs underfunded…
Source: Medicare Payment Advisory Commission, Annual Report to Congress Chapter 8: Skilled Nursing Facility Services, March 2020; National Investment Center for Seniors
Housing and Care, Skilled Nursing Quarterly Report, January 2020; Rutledge, Cory, et al. 34th SNF Cost Comparison and Industry Trend Report. Clifton Larsen
Allen LLP, 2019; Post-Acute Care Collaborative 2019 turnover benchmarking initiative.
Post-acute and long-term care financials, staffing model inextricably tied
9% increase in Medicaid patient days
between 2012 and 2019
68% Medicaid patient day mix in Q4 2019
$544
…and discourages investment required for
higher-level care
Two-thirds of nursing hours are
provided by aide-level staff
53.1% of staff turn over annually,
on average
Majority of facilities lack adequate
space for private rooms, patient cohorting
Traditionally less medically complex
patient population meant few facilities
had invested in large stores of PPE
Medicaid patient days are increasing in SNF
Medicare
Medicaid
How will COVID-19 impact the U.S.’ approach to post-acute and long-term care?
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
40
Covid-19 continues to spread rapidly in nursing homesAt least 3,466 long-term care facilities have reported cases of Covid-19
Advisory Board interviews and analysis.
0 nursing homes 1-50 nursing homes 51-100 nursing homes >100 nursing homesSource: Khimm, Suzy, et al. “More than 2,200 Coronavirus Deaths in Nursing Homes, but Federal Government Isn't Tracking Them.” NBCNews.com,
NBCUniversal News Group, 16 Apr. 2020, www.nbcnews.com/news/us-news/more-2-200-coronavirus-deaths-nursing-homes-federal-government-isn-n1181026;
“Coronavirus in the U.S.: Latest Map and Case Count.” The New York Times, 3 Mar. 2020, www.nytimes.com/interactive/2020/us/coronavirus-us-cases.html.
Not reporting
136 cases linked to
nursing home in
Massachusetts.
115 cases
associated with
rehabilitation center
in Tennessee.
128 cases linked to
nursing home in
Washington.
83 cases linked to
Texas nursing
home.
92 cases
associated with
post-acute center in
Kansas.
98 cases linked to
Maryland nursing
facility.
Number of nursing homes with Covid-19 cases, by state
© 2020 Advisory Board • All rights reserved • advisory.com
41
Source: Connolle, P., Rep. Wexton Pushes to Make Funding for LTC Facilities a Priority in COVID-19 Fight, Provider Magazine,
http://www.providermagazine.com/news/Pages/2020/APRIL/Rep--Wexton-Pushes-to-Make-Funding-for-LTC-Facilities-a-Priority-in-COVID-19-Fight.aspx.
Will current crisis lead to more funding for SNFs, or accelerate the shift to home?
Shaping the future of the post-acute continuum
Advocates begin to rally for more
funding in long-term care……but an accelerated shift toward home-based care is more likely
Representatives Jennifer Wexton
(D-VA) and Abigail Spanberger (D-VA)
spearheaded a new effort this week to
include more dedicated funding for
post-acute and long-term care
providers in the next stimulus bill.
INNOVATION
The COVID-19 pandemic adds to trends supporting home-based care models
Post-acute providers are unlikely
to get substantial increases
given limited available funding
Proliferation of value-based payment models
supporting lower total cost-of-care
Increasing consumer preference to age in place
Rapid development of at-home patient monitoring technology
Growing stigma associated with long-term care due to frequent
COVID-19 outbreaks; causes patients, families, and providers
to opt for home care over facility-based
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
42
Startup Health Insights, “2019: The Year for Health Innovation,” Startup Health, 2019.
Despite short-term slow-down, threat of disruption will persist
COVID-19 may give incumbents short respite from disruptors
Advisory Board interviews and analysis.
Short-term impact
• Some start-ups face liquidity issues leading to lay-offs and
closures; government-funded grants and private equity
commitments may lessen impact
• Digital health companies will be partially immune to short-term
negative impacts, while disruptors at large will experience
stalled growth
Medium-term impact
• Venture capital firms will continue to invest funds they have
already raised, but with greater scrutiny
• Consumers will exhibit more selective spending habits as
economic downturn persists, dampening success of direct-to-
consumer ventures
Long-term impact
• Well-capitalized and “too big to fail” companies remain, and in
some cases, will acquire distressed assets
• Demand returns for solutions focused on long-standing issues,
such as chronic disease management, expanded primary care
access, and an aging population
Impact of crisis on disruptors
$6.2 B
$8.2 B
$11.7 B
$14.7 B
$13.7 B
568
688
881
789727
0
100
200
300
400
500
600
700
800
900
1000
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
2015 2016 2017 2018 2019
Funding Number of Deals
Health innovation funding and number of deals pre-COVID-19
Fundin
g (
in b
illio
ns)
Num
ber
of deals
How will COVID-19 impact the competitive landscape and efforts to “disrupt” the industry?
© 2020 Advisory Board • All rights reserved • advisory.com
43
Outbreak will create new opportunities for disruption
New normal from stay-at-home
economy and lifestyle
Second-order effects from financial
pressures and an economic recovery
Growth of direct-pay models
Consumers seek primary care membership models
or low-cost self-pay options to compensate for loss
of insurance
New users of telehealth
Virtual visits and remote monitoring may be here to
stay if first-time users have a good experience and
payment parity stays in place and/or reimbursement is
secured through other arrangements
Changes to benefit design
Employers take a more activist approach to managing
costs, and become receptive to COE programs,
digital therapeutics programs, and stronger virtual
care incentives
Momentum for home-based care
Consumers may attach to the convenience of home-
based care; Hospital at Home companies will have case
for receiving reimbursement
Renewed focus on value-based payment
Payers may refocus their attention on value-based
programs to address cost pressures, opening the
door for wellness and population health management
companies
Adoption of self-administered diagnostics
Technologies enabling consumers to submit diagnostic data
garner awareness during pandemic, while proving ease,
safety, and convenience
Advisory Board interviews and analysis.
© 2020 Advisory Board • All rights reserved • advisory.com
44
COVID-19 to have unprecedented psychological impact
Advisory Board interviews and analysis.
While need skyrockets, most barriers to treatment remain
Source: Mental Health Care Health Professional Shortage Areas (HPSAs),” Kaiser Family Foundation; Honberg R, et al., “A Long Road
Ahead: Achieving True Parity in Mental Health and Substance Use Care,” NAMI; Coe EH and Enomoto K, “Returning to Resilience: The
Impact of COVID-19 on Mental Health and Substance Use,” McKinsey; Brooks SK, et al., “The Psychological Impact of Quarantine and How
to Reduce It: Rapid Review of the Evidence,” The Lancet, 395, no. 10227 (March 2020): 912-920; Lai J, et al., “Factors Associated With
Mental Health Outcomes Among Health Care Workers Exposed to Coronavirus Disease 2019,” JAMA Network Open, 3, no. 3 (March 2020).
State of BH1 pre-COVID
Denial rates of
private insurance
for BH compared
to medical care
2X
Shortage of
mental health care
professionals2,3
56%
► Physician and nurses concerned
about maintaining licensure
► Financial insecurity and job loss
exacerbate unaffordability problem
1. Behavioral health.
2. Mental health professionals include psychiatrists, clinical
psychologists, clinical social workers, psychiatric nurse
specialists, and marriage and family therapists.
How will COVID-19 impact demand for behavioral health services?
Clinicians and first responders
• Extreme stress and trauma with
frontline staff in China reporting
high rates of depression (50%),
anxiety (45%), insomnia (34%),
and distress (72%)
COVID-19 patients and their families
• Quarantining can cause post-
traumatic stress symptoms,
confusion, and anger with possible
long-lasting effects
COVID drivers of BH need
General population
• Collective grief, fear, and
loneliness; 80% of Americans report
moderate or high levels of distress
• Financial crises are linked to
increased depression, anxiety,
substance misuse, and suicides4
People with BH conditions
• Limited access to BH treatment
• Stress, isolation, uncertainty, etc. can
trigger or exacerbate symptoms
3. As of January 2017.
4. There was a 13% increase in suicides attributable to
unemployment during the Great Recession in 2008.
► Stigma and discomfort seeking care
for behavioral health
© 2020 Advisory Board • All rights reserved • advisory.com
45
1. Telebehavioral health is the remote diagnosis and treatment of mental health and
substance use disorders. Behavioral health providers include psychologists, psychiatrists,
licensed clinical social workers and licensed practicing counselors, among others.
Source: Ravindranath M, “America’s Having a Nervous Breakdown. Can Telemedicine Fix It?,” Politico, https://www.politico.com/news/2020/04/09/mental-
health-online-coronavirus-177499; Shane L, “Veterans’ Remote Mental Health Appointments Skyrocket Amid Coronavirus Outbreak,” Military
Timeshttps://www.militarytimes.com/news/2020/04/13/veterans-remote-mental-health-appointments-skyrocket-amid-coronavirus-outbreak/.
Tele-BH1 a necessary short- and long-term investment
Advisory Board interviews and analysis.
Expanded field of providers
• Trump administration allows
therapists and social workers
to video chat with patients
Reimbursement parity
• Some insurers reimburse for
virtual treatment at the same
rate as in-person treatment
Regulatory changes
ease implementation
4XIncrease in the VA’s phone-
based mental health check-ins
and consultations, from 40K in
February to 154K in March
130%Increase in tele-BH visits from
telehealth company Doctor on
Demand over this time last year
Recent tele-BH surges
indicate willingness High-priority populations
for tele-BH during COVID-19
• Patients diagnosed with
COVID-19 and their families
• People at high risk of
infection
– Frontline clinicians
working with COVID
patients
– First responders
• People already receiving
BH treatment
© 2020 Advisory Board • All rights reserved • advisory.com
46
Source: Gold J, “The Covid-19 Crisis Too Few are Talking about: Health Care Workers’ Mental Health,” STAT,
https://www.statnews.com/2020/04/03/the-covid-19-crisis-too-few-are-talking-about-health-care-workers-mental-health/.
Self-service and on-demand support required to meet surge in demand
Investment required beyond tele-BH
Advisory Board interviews and analysis
Medium
High
Medium
On-demand support
• Help lines for navigation
or immediate care
• Crisis support
Intermountain’s emotional
health relief hotline navigates
callers to self-care tools and
treatment options
Medium
Medium
High
Ongoing treatment
• Virtual screening
• Individual or group therapy
• Medication management
• Text messaging or emails
Atrium Health’s 24/7 help line
is staffed by master’s level BH
clinicians and RNs to offer
immediate care and referrals to
ongoing tele-BH support
Self-service resources
Low
High
Medium
UCSF's curated resource
page for employees includes
digital health apps made free
to providers, wellness tips,
and methods to seek treatment
• Digital health apps
• Educational materials
• List of local resources, such
as mental health centers
Investment
Reach
Impact
© 2020 Advisory Board • All rights reserved • advisory.com
47
Your top resources for COVID-19 readiness
Advisory Board interviews and analysis.
To access the top COVID-19 resources,
visit advisory.com/covid-19
CDC and WHO Guidelines
Compiles evidence-based information on
hospital and personnel preparedness, COVID-
19 infection control recommendations, clinical
guidelines, and case trackers
Coronavirus scenario planning
Explores twelve situations hospital leaders
should prepare for and helps hospital
leadership teams pressure test the
comprehensiveness of their preparedness
planning efforts and check for blind spots
Managing clinical capacity
Examines best practices for creating flexible
nursing capacity, maximizing hospital throughput
in times of high demand, increasing access
channels, deploying telehealth capabilities, and
engaging clinicians as they deal with intense
workloads
How COVID-19 is transforming
telehealth—now and in the future
Explores how telehealth is being deployed
against COVID-19 and essential next steps for
telehealth implementation
© 2020 Advisory Board • All rights reserved • advisory.com
Meet our experts
Christopher Kerns
Vice President, Executive Insights
Christopher oversees all senior executive research
at Advisory Board, and is responsible for developing
the research perspective, official point of view, and
overall Advisory Board message to executives from
across the health care sector.
[email protected] @CD_Kerns