‘COVID.  COVID. COVID.’

‘COVID. COVID. COVID.’

By George Chapman

Special for Oswego County Business

These are the words of our soon-to-be former president at a campaign rally just days before the November election. It was said somewhat sarcastically because it was dominating the headlines and he predicted we would never hear another word about COVID-19 after the election. Well … COVID-19 continues to dominate the news and our lives as the pandemic worsens and we approach 300,000 deaths. Thankfully, vaccines will be distributed throughout the early months of 2021. The virus, however, will continue to impact and influence our well- being, healthcare delivery and the news throughout 2021.

Average Age Continues to Rise

We are getting older. The New York Times ran an article in 2020 on the pending healthcare crisis facing the country as we age. (The impact of the pandemic remains to be seen.) Our birthrate is at a record low, continuing a steady decline since the 2008 recession. Ten thousand baby boomers are retiring every day and they are living longer. In 10 years, by 2030, the population of the prime caregivers (45-65) will increase by just 1% a year, while the population over 80 will increase by an astounding 80%. To compound the approaching dilemma, once you reach 85, your chances of developing Alzheimer’s is 14 times higher than when you’re 65 to 70. Most of the help received by the elderly, 83%, is provided by relatives or neighbors — without compensation — and two thirds of the caregivers are women. According to the National Institute on Retirement Security, the median savings of people in middle age is just $15,000. It is estimated that people over 65 withdrew $22 billion from their savings to cover what Medicare doesn’t. And Medicare does not cover long term care. It is human nature to kick the can down the road, ignore reality and avoid uncomfortable debate. Pending crises aren’t really addressed until they are smack in front of us. 2030 is just around the corner.

ID Doc Shortage Continues

PillsWith the coronavirus grabbing the headlines, overlooked is the fact that Infectious disease experts (ID docs) are a fading breed. There has been a 40% decrease in medical students enrolling in ID training programs or residencies between 2009 and 2019. Infectious disease is one of just two subspecialties where not all residency slots are filled. Telemedicine can help by transmitting increasingly rare and valuable expertise to physicians working in even the remotest areas. Telemedicine also allows physicians to treat patients remotely, keeping them from coming into EDs and offices and infecting provider staffs and other patients.

Drug Prices Will Remain Uncontrolled

The House bipartisan bill authorizing the Centers for Medicare & Medicaid Services (CMS) to negotiate drug prices on behalf of the 165 million people covered by Medicare and Medicaid remains stalled in the Senate and most likely will not be tabled for a vote in 2021. Sen. Chuck Grassley, a Republican, spearheaded the bipartisan bill. Opponents of the bill have argued that negotiating prices is a form of “socialism.” The rather timid bipartisan bill would authorize CMS to negotiate just 25 prices the first year, then ramp up to more over ten years. Drug prices remain totally unchecked while CMS literally sets prices and fees for physicians and hospitals. Rather than negotiate prices with U.S. drug manufacturers, the latest scheme is to buy drugs from Canada and Mexico where they are much cheaper. Both countries have told us they purchase just enough drugs for their citizens and have no interest in our roundabout scheme.

Amazon’s Impact to Increase

Just as Amazon changed the way we shop, resulting in the closure of 9,000 brick-and-mortar stores last year alone, so it is changing the way we receive medical care. It will continue to open primary care clinics, expand virtual medical services and introduce an on line pharmacy called PillPack. Amazon is working on an Alexa-based program whereby consumers can query drug interactions and side effects as well as manage their meds. Information will be updated regularly. The company is also working on clinical speech recognition whereby provider patient conversations will automatically be documented in the medical record. This will have a significant impact on “he said, she said” conversations. Amazon has the wherewithal, size, money, supply chain, artificial intelligence and IT expertise to alter the entire healthcare delivery system. Industry observers believe Amazon will have the same impact on brick-and-mortar providers as it did on stores. In lieu of the dire predictions of a physician shortage, Amazon could considerably reduce the deficit with increased automation and artificial intelligence.

COVID-19 in Perspective

VaccineVarious computer models have attempted to predict U.S. deaths from this pandemic. The earliest estimates were upward of one million deaths. These early predictions were based on spurious data from China. A year into the pandemic, we have more experience. Models in mid- April were predicting fewer than 100,000 deaths. The final tally for 2020 may exceed 300,000. It helps to put the impact of the virus in perspective.

The major causes of death for 2018:
• Heart disease: 655,381
• Cancer: 599,274
• Alzheimer’s/dementia: 267,311
• Emphysema/COPD:  154,603
• Stroke: 147,810
• Diabetes: 84,946
• Drug overdose: 67,367
• Pneumonia/flu: 59,690
• Liver disease: 55,918
• Renal failure: 50,504
• Car crash: 42,114
• Septicemia: 40,718
• Guns: 39,201
• Falls: 37,558
• Hypertension: 35,835
• Parkinson’s: 35,598
• Digestive diseases: 31,015
• Arterial diseases: 24,808.

In 2018 the US population was 327 million. COVID-19 with 300,000 deaths will move into third place behind cancer and before dementia.

Telemedicine to Increase

telemedicineUndoubtedly, COVID-19 is the catalyst for the widespread acceptance and use of telemedicine and virtual visits. As the virus resurges, providers may either postpone your upcoming routine office visit or offer to “see” you via telemedicine. Medicare has relaxed privacy and billing requirements for providers, (MDs, NPs, PAs, social workers, therapists, mental health providers) making it far easier for them to offer and bill for virtual visits. Smart phones and personal computers are acceptable for virtual visits. You must agree to the virtual visit verbally. Over the next several months. Medicare has relaxed physician supervision of nurse practitioners and physicians assistants, granting these two advanced practitioners more independence. Physicians can still provide virtual care across state lines regardless of the state they are licensed. No one could have predicted that a pandemic would be the catalyst or “black swan” event for telemedicine. Up until the pandemic, telemedicine was used infrequently. Virtual visits were just 10% of a typical provider’s schedule in 2019. In April 2020, it had ballooned to 46%. Industry experts are predicting that telehealth could be $250 billion a year in spending post pandemic. Both providers and consumers have adapted to the new reality. According to a recent consumer survey by McKinsey & Company, 75% of respondents are highly or moderately likely to use telemedicine services. Seventy-five percent of respondents who recently received services via telemedicine were satisfied. Up until the pandemic, providers were somewhat reluctant to incorporate telemedicine into their business models, primarily due to poor reimbursement from insurers. Before the pandemic, telemedicine was used primarily to reach isolated, rural or homebound patients. The unknown is whether or not Medicare will continue the improved telemedicine reimbursement beyond the pandemic. The longer this pandemic lasts into 2021, the further the “horse is out of the barn”. Medicare would certainly face a backlash from both providers and consumers who have adapted to this care delivery care option.

Reopening Healthcare, Again, in 2021

The initial surge in the spring of 2020, forced hospitals and physician offices to close to non-emergent care. The postponement or cancellation of elective surgeries and routine office visits put most pproviders in dire financial straits and most resorted to furloughing or laying off staff as bottom lines floundered. In April, CMS issued guidelines for providers to open up again for normal business. By summer, things started to return to normal. But with the pandemic resurging at the end of 2020 to heights never imagined last spring, providers may start to limit care again. Decisions to limit care will be consistent with federal, state, and local orders, CDC guidance, and in collaboration with state and local public health authorities. Last spring, with the initial surge, providers were hampered by shortages of personal protection equipment (PPE). That is still somewhat of an issue this time around. But now a worsening and more devastating problem is provider burnout and stress. As if that isn’t enough of a problem, competition for nurses, physicians, respiratory therapists among hospitals is furious. Traveling nurses can earn as much as $7,000 to $10,000 a week, especially in rural areas. While it is great for nurses, it is straining already disastrous hospital bottom lines.

“Retailization” of Healthcare

Female doctor with patientThe pandemic will cause this trend to accelerate. In addition to opening more and more primary care, dental, vision and mental health clinics, mega corps like Walmart have introduced healthcare insurance products. Walmart Insurance Services began selling Medicare plans last August in the Dallas Fort Worth area market. Not to be outdone, Walgreen’s plans to open 500 to 700 clinics called VillageMD over the next five years. The plan is to employ 3,600 primary care providers. Half of the clinics will be located in federally designated medically underserved areas. It remains to be seen how this will impact the private practice of medicine and hospital systems that also employ providers in remote, off campus facilities. The obvious question is where will all these care givers come from?

Hospitals Are Not “Gaming” the Virus

CoronavirusThere are several and totally unfounded rumblings on social media and the press regarding hospital “profiteering” during the pandemic. The inference is that hospitals are encouraged to label every respiratory infection as COVID-19 ( COVID-19) in order to get paid more. Nothing could be further from the truth. That would be out and out fraud and all the major payers like Medicare, United, Humana, BlueCross, etc. employ fraud police. Also, patients or family members of the deceased, are asked to inspect their hospital bills for suspected fraud and to report such. In 2017, well before the pandemic, the average payment to hospitals for respiratory and infections problems ranged from $13,000 to $40,000 depending on the patient’s insurance, severity of illness, comorbidities and length of stay. Medicare, that pays for most of the COVID19 hospitalizations, pays an average of 20% more because … it costs more. The average patient spends 20 days in the ICU, which is the most expensive and service intensive place to be in a hospital. According to the Association of Health Insurance Plans (AHIP), the average reimbursement to hospitals for  COVID-19 is about $30,000. No hospital is “making money off the virus”. Medicare partially reimburses hospitals for  COVID-19 care rendered to the indigent. The Kaiser Family Foundation estimates two million of us will get the virus and 15% will be hospitalized when all is said and done. There are plenty of hyped up stories about exorbitant hospital  COVID-19 bills. That is not newsworthy because all hospital bills are exorbitant. They are notoriously and historically absurd when compared to what they are actually are paid by insurers. Hospital charges have little to do with costs. But, despite their charges, all hospitals have suffered tremendous financial losses since the pandemic because they had to cancel all their elective surgeries. In a typical non-pandemic year, about one third of our 5,000 hospitals lose money, another third hover around break-evenand a third make a modest profit.   

‘Ten thousand baby boomers are retiring every day and they are living longer. In 10 years, by 2030, the population of the prime caregivers (45-65) will increase by just 1% a year, while the population over 80 will increase by an astounding 80%.’

Uninsured Increasing

UninsuredThe impact of the pandemic is evident in fatalities, increased social anxiety, a faltering economy and loss of jobs. It is estimated that as many as eight million workers will lose their jobs temporarily, if not permanently. Consequently, they will lose their employer-based health insurance.

If the ACA is stuck down, subsidized commercial insurance plans on the exchanges will no longer be an option as it is currently for 20 million Americans. Physicians and hospitals, already in financial peril due to the pandemic, are understandably concerned about the further strain on their revenue sources as patients lose their better paying commercial insurance plans.

The newly uninsured who qualify based on income, will be covered by Medicaid. Those who don’t qualify may decide individual commercial insurance is too expensive and risk being uninsured. Health insurance, for most under 65, has traditionally been employer based.

The ACA was designed to offer an alternative to employer based plans.


George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at gwc@gwchapmanconsulting.com.