As the number of COVID-19 cases peaks across the country, many states are moving forward with plans to reopen in an attempt to stabilize local economies. Though the move is encouraged by the administration, health experts warn that diminishing social distancing efforts too early could result in an even greater number of infected. Meanwhile, those most essential to the crisis don’t stand to benefit either way – health systems are positioned to face challenges in both scenarios.
The White House unveiled a plan for reopening the economy, encouraging states to begin loosening social distancing orders. Within the plan is the recommendation that states wait until they have reached a place where confirmed cases have been in steady decline for two weeks. The guidelines also state that strong testing procedures be in place for healthcare workers and hospitals not to be “overwhelmed” prior to reopening though no formal explanation is offered providing for parameters for either.
Despite the official recommendation from the federal government, health experts warn against reopening so soon, including Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, who stated: “it’s going to backfire.” Reopening too soon has the potential to diminish all the progress that state lockdowns and distancing efforts have achieved to slow the spread thus far. Additionally, experts say that there is not enough known about how the virus spreads yet. It’s still unclear as to whether or not we have truly seen the peak and if those recovered from the virus are still capable of spreading it. Without that knowledge, they warn, we could be facing an even more catastrophic second wave.
The nation appears to stand divided on the issue; some states enthusiastic about reopening for the sake of local economies while others aim to exercise more caution and ask for more federal assistance with regard to available testing and personal protective equipment (PPE) for healthcare workers. While both sides openly express concern for health systems and the healthcare workers on the frontline of the crisis, neither outcome appears to serve them.
Financially health systems are strained to say the least. The outbreak appears to have created the perfect storm; increasing the number of people that need care (and thus related expenses) while removing patients’ ability to pay (due to the unprecedented number of furloughed or unemployed). They have had to put a halt on other potential revenue sources such as elective surgeries and devote all their resources to the virus, while those that don’t are seeing mass cancellations from patients honoring social distancing efforts or too scared to enter a clinic and risk exposure. Additionally, demand and disrupted supply chains have pushed up the cost for essential supplies such as PPE and swabs used for testing.
Projections for the health sector are grim. Private insurance carries higher deductibles now making it less generous for patients and reimbursement rates are not likely to keep pace with the volume of claims. Health systems that participate in payment models linked to Medicare, such as Accountable Care Organizations, are facing major losses as shared savings are all but completely wiped out by the high volume of beneficiaries that require care. With a recession looming from a shuttered economy, hospitals can also anticipate a decrease in charitable funding and government assistance – even the $100 billion set aside for health systems in the CARES Act stimulus bill does not appear to be enough to prevent closures as an already record number of rural facilities were close to shutdown prior to the epidemic. Furthermore, new analysis shows the estimates for the cost of COVID-19 patient treatment are much higher than the bill was designed to address with its moderate increase to Medicare reimbursements.
Meanwhile, healthcare workers are having to cope with pressure from all sides. Putting their lives at risk to care for the infected without the proper protective gear or supplies to do their jobs and being isolated from support networks, such as family and friends, is creating a mental health crisis. Adding to the dilemma, the financial burden on health systems has pushed many to cut doctor’s pay and move medical staff to part-time if not furlough them entirely – so those most essential to diverting this public health disaster are also not exempt from the economic fallout.
For health systems, reopening is a double-edged sword: restarting the economy could help offset the financial burden created by the pandemic, but any increase in COVID-19 cases would only exacerbate it. Regardless of each state’s decision on reopening, health systems may continue to face financial challenges. While consumers are often given the advice to take care of other debts before they pay their medical bills, now would be a good time to be diligent in paying our healthcare providers. In order to ride out this storm, providers need to continue collecting on existing accounts and it is increasingly important that, for those of us who can, we prioritize paying medical bills. Every small bit of revenue is essential in offsetting the cost in the fight for public health.