Hospitals are the first line of defense during a public health crisis, but they are also grappling with significant financial losses and how to face the rapidly changing landscape of health care.
ChristianaCare lost about 40% of its revenue at the height of the pandemic in April, with surgeries down to 25% and primary care down to 12% compared to April 2019. Revenue has rebounded in July and August, but ChristianaCare Chief Financial Officer Rob McMurray said it’s yet to make up the shortfall.
“I would say we’re at the break-even point right now … It’s going to take some time and changes in the way we work,” McMurray said. “There is no business as usual. There’s no return to the normal, and I’m not sure there’s going to be a normal for a while.”
ChristianaCare is not alone. Bayhealth Medical Center lost $60 million in the first several months of the pandemic. Other hospitals declined to comment on the scope of the financial impact of COVID-19, but the Delaware Healthcare Association reported that hospitals lost $5 million per day. Saint Francis Hospital furloughed and laid off staff while reducing executive salaries, but no other Delaware hospital has made similar cuts at this point.
Things are improving with COVID-19 hospitalizations falling and elective surgeries gradually resuming to help boost revenue and insurance reimbursements covering telemedicine to bridge the gap. But still, hospital executives say that the storm has yet to pass.
In the short term, McMurray said that Delaware hospitals will need continued financial aid and patients to come back to make it through the storm. Delaware acute hospitals received roughly $85 million in aid from the CARES Act, but that was a stopgap for continued revenue shortfall. For example, Bayhealth received $32 million from the CARES Act, or almost half of what it lost during the pandemic.
“We’re grateful for our congressional delegation for helping us get that assistance, but hospital systems across the country will need more financial assistance, not only from the federal level but from the state as well,” McMurray said. “We’re really looking for our community to re-engage with us. We understand that people may have put off care, but today’s the day to make that appointment.”
Before COVID-19, Delaware was one of 10 states that required private insurers to reimburse telemedicine at the same rate as in-person visits. But federal regulations quickly relaxed to allow hospitals to continue seeing patients and bring in some revenue. Gov. John Carney issued an executive order in March to loosen state restrictions on access to telemedicine, and he recently signed legislation that expanded the practice to phone calls and out-of-state providers treating Delaware residents until July 1, 2021.
Gov. John Carney called telemedicine a “Godsend and incredibly important” to keep patients in front of physicians and planned look at the legislation’s provisions for it and adjust by July next year. He added that the state will have to establish fees to pay for telemedicine, taking the lead from Medicare and Medicaid.
“I know it’ll be an important way of of doing health care services in the future and we look forward to addressing any issues that occur over the next several months,” Carney said. “We need to think about how that will work, how it will create efficiencies in the delivery of health care. “
Saint Francis Healthcare Interim President and CEO Brandon Harvath said keeping that rate the same once the state emerges from the pandemic could be difficult.
“Frankly, we’ve been very encouraged by the support from the state, providers and payers in the state. But it’s a continuing concern and battle to make sure that the reimbursement levels are appropriate or equitable to allow us to offer that kind of access to care for our community,” Harvath said.
For now, the demand and innovation for telemedicine is there to keep it a viable option for healthcare provider. Bayhealth reported using it for about 80% of patient visits and Nanticoke Health Systems in Seaford seeing about two-thirds of its typical patient volume amid the pandemic. ChristianaCare transitioned CareVio, a web-based platform for virtual primary care practice that monitors chronic conditions, to a system to monitor COVID-positive patients via texts and phone calls.
It can be even more critical for hospitals in rural areas like Beebe Healthcare and Nanticoke, where it can be a long drive to the doctor’s office. Roughly 25% of Peninsula Regional Health System’s patients were from Delaware, driving the six miles to Salisbury, because it was a nearby option that provided comprehensive care . That was before the Salisbury-based health system acquired Nanticoke earlier this year.
“[Telemedicine] was always challenging for two reasons: the willingness of the end user and the reimbursement. Suddenly it’s become a viable option with restrictions loosened and people who could not go out,” Peninsula Regional Health System CEO and President Steve Leonard said. “I think payers want to support it, but the question is to what degree now that the surge is behind us.”
Bayhealth Chief Medical Officer Gary Siegelman believes telemedicine has cemented itself in the portfolio of healthcare options, but does think some of the restrictions will come back and make it less likely – and profitable– for hospitals to use it to its full potential. There will also always be a need to see patients face to face.
“I don’t think payment for phone visits will continue, and it may be dropped by Medicare and probably other insurers,” he said. “But I do hope that video reimbursement will be paid at the same level as regular visits. You also need that interaction with people who can understand their symptoms. Part of health is interacting with people and learning from them.”
Beebe Healthcare CEO and President David Tam said he’s committed to keep telemedicine at the hospital system and sees a world of possibilities with technology. In July, Beebe unveiled a smartphone app that uses artificial intelligence that screens patients through a series of questions. Tam envisions possibilities with smartphone accessories to allow patient to do at-home throat and ear exams – and getting a translator on the line for Spanish and Haitian speaking residents.
“This really will give us the opportunity to reach all populations. In something like a pandemic, it’s really shown us the power of having a local presence and having those relationships we’ve built in our community, that we can move forward with preventative education, and move forward aggressively,” Tam said.
Delaware hospital executives believe that COVID-19 will reinforce the healthcare sector’s focus on preventative care to ensure that small ailments do not become life-threatening in the long run.
“There are certain populations that are more prone to illness, and there are social determinants that can impact health, and that gets highlighted in a pandemic like this,” Siegelman said. “How we can address that, how can we prevent and reduce that, is a lesson we will continue to work on.”
-Katie Tabeling
ktabeling@delawarebusinesstimes.com
