Even after a worldwide COVID-19 vaccine is developed, or an effective treatment following exposure discovered, the pandemic will very likely have a lasting effect on behavior and social interaction. Additionally, the abrupt and nearly complete disruption of the United States economy will have persistent effect on all aspects of the healthcare system. Before the pandemic healthcare was consuming $3.5 trillion annually ($12,000 per capita). Even in a robust economy this trend was not sustainable. All aspects of healthcare will be affected by reduced revenue, potential rationing, and deflation. Both hospitals and providers should not expect reimbursement and volume to return to pre-pandemic levels. The reimbursement squeeze has been occurring for years but, by necessity, will accelerate.
The twin forces of social and economic changes will significantly impact hospital procedural services. Hospitals rely upon robust procedural services for the majority of their revenue and profits. Even now, with a national moratorium on elective operating room and procedural services, there is intense pressure on hospitals, system administrators and proceduralist to resume elective surgeries to stop the hemorrhaging of cash. The same moratorium on elective surgery has occurred in Ambulatory Surgery Centers (ASCs). However, ambulatory procedural services (especially outside the hospital), including ASCs and office based procedural care, will likely ramp up much more quickly. Patients, payers and proceduralists will drive this trend.
For hospitals, however, the ramping back up of elective cases will likely not be rapid as hoped or expected. Despite the demands of hospital backlogged cases and the desire to re-engage, patients will be cautious about returning to the hospital for their elective procedures. The current daily media barrage highlighting hospitals overloaded with COVID volume will undoubtedly fuel this patient concern even after the pandemic starts subsiding.
This means that the out-migration of procedural care to the ASC and the surgeon’s office will accelerate, as a direct result of COVID-19. It’s been estimated that 50% of procedures currently performed in the hospital before the pandemic could be moved to an outpatient facility.[i] Although it is likely that hospitals will experience a brief surge in patient procedures when the pandemic subsides, long-term there will likely be a significant loss in elective volume to the ASC and physician office.
The pandemic has also stressed healthcare personnel to excessive levels. Following the crisis there will also be continued demands placed on staff and clinicians as they cope with the expected short-term surge in procedural demand. The average age of the hospital operating nurse is approximately 55, with retirement age averaging 62.[ii] We should expect there will be a hastened loss of this valuable, highly skilled group to retirement following the pandemic.
The story does not need to end on this note. There is a real opportunity. Hospitals that foresee and adapt to these trends, can not only survive, but prosper!
- Change perspective: Clinging to historically cherished beliefs and traditional approaches to hospital-based procedural care must be critically reviewed. The pandemic may be just the shock needed by the system to produce a long overdue review and change in the approaches of providers, payers and hospitals.
- Evolve with the trends: Expect continued erosion of hospital procedural volume to ambulatory facilities. Additionally, the Hospital Outpatient Department (HOPD) will lose its traditional economic advantage over the ASC as the per-case revenue differences become negligible.[iii] Adopting an aggressive hospital-based expansion into the ASC and office-based procedure arenas is essential.
- Focus on retaining procedural staff: Maintaining hospital procedural volume will, by necessity, require accelerating the current trend of employing proceduralists
- Incent your team: Understanding that procedural services drive hospital viability, consider incentives that reward improvements in quality, efficiency, and productivity for both clinical and support staff.
- Govern wisely: Build a new multidisciplinary collaborative leadership model for procedural services. This include surgeons, anesthesia, nursing and administration. It should function as the administration-sponsored ‘board of directors’ of procedural services.
- Mange your capacity: Careful and continuous management of procedural capacity across your facilities (i.e., “the right case at the right place”) to optimize productivity and efficiency will become an integral part of maintaining financial viability.
- Align with the total healthcare continuum incentives: Payers are increasingly driving patients and primary care physicians to refer to lower cost specialists. Manage cost at a per-specialists basis to ensure that your specialists’ care cost structure is not misaligned.
The impact of COVID-19 will accelerate healthcare industry transformational trends in the US. At Surgical Directions, we’ve worked with over 400 hospitals and ASC’s who have needed to make transformational change. We can help you. Please do not hesitate to contact us at info@surgicaldirections.com for more information.
[i] The Advisory Board (2019). Three steps to build a winning ASC strategy. Retrieved from: https://www.advisory.com/research/health-care-advisory-board/research-reports/2019/the-new-rules-of-ambulatory-competition?WT.ac=Inline_HCAB_ResRep_x_x_x_TGC_2019Jul25_Eloqua-RMKTG+Blog
[ii] AORN, November 2015. Perioperative Nursing Succession Planning: Theoretical Learning, Clinical Opportunities, and Residencies.
[iii] Site Neutrality Regulations, Centers for Medicare and Medicaid Services. November, 2018. Retrieved from: https://www.cms.gov/newsroom/press-releases/cms-finalizes-rule-encourages-more-choices-and-lower-costs-seniors
