America’s hospitals and health systems have shored up their financial position considerably since the early weeks of the COVID-19 pandemic last spring, a new report from Strata Decision Technology indicates.
Inpatient volumes are now approaching 90% to 95% of 2019 levels, the Chicago-based analytic firm says. The researchers reached this conclusion after evaluating financial and operational data for 275 hospitals across the United States from March through July.
Surgical procedures are 18.6% lower than they were last year, but screening and chronic care services have come back strong, Strata reports.
Outpatient volumes have rebounded after falling 56% at the bottom of the pandemic. During July, they were only 1.5% lower than in the previous year.
Emergency department utilization, which fell by 50% at one point, has partly recovered, but it’s still down about 25% from 2019 levels because many people are afraid to visit the emergency department, Strata says.
Across all hospital services lines, volumes in July were higher than they were in May and June. During July, they rose by 17.4%.
The service lines that have come back strongest are cancer, breast care, nephrology, and cardiology. Procedural work is still lagging in specialties such as orthopedic, spine, vascular, and general surgery.
Specialties such as allergy, dermatology, and ear, nose, and throat (ENT) are also less in demand than before the pandemic, perhaps because some of their services can be postponed or performed well via telehealth.
The picture was very different when Strata released its last report on May 11. At that time, Strata found there was an average decrease of 54.5% in the number of patients who sought care in a hospital setting during a 2-week period in March and April.
A report in late March from the same company predicted that many hospitals would be not be able to survive the damage to their cash flow for more than 60 to 90 days. That calculation included a potential 20% boost in Medicare payment for COVID-19 cases that was later included in the CARES Act.
The new report credits the $175 billion allocated to providers in the CARES Act as one of the chief factors in stabilizing hospitals’ financial status. It also cites the “heroic efforts” of providers to combat the pandemic.
“In recent months, we have witnessed dramatically lower mechanical ventilator use and mortality rates,” the Strata report notes. “And today, it’s clear that institutions can manage COVID-19 volumes while safely treating patients suffering from other issues.”
COVID-19 did not account for a large part of the average hospital’s caseload from March through July. Of the monthly inpatient admissions during the study period, 5.7% were of patients with COVID-19. In April, at the pandemic’s peak, the condition represented 11% of all admissions.
The most common diagnoses of inpatients with COVID-19 during the study period were respiratory diagnosis-related group (DRG) 177 (45% of the total) and/or sepsis DRG 871 (18%).
Admission rates of patients with COVID-19 have declined across all age cohorts, the report says, suggesting that emergency department physicians have improved their ability to identify who has COVID. However, the length of stay continues to be longer for these patients than for many others.
“Admitted COVID-19 patients in the top 7 DRGs used for COVID-19 have a length of stay 20% higher than non-COVID-19 patients in the same DRGs, justifying the 20% reimbursement increase the government offered providers,” the report states.
After declining by nearly half, office visits have made a major comeback. In July, they were down only 15.3% from the same month in 2019.
Office visit volume varied by region, however. The Northeast, for example, has fared better than have regions where COVID-19 reduced office visits later in the spring and summer. Perhaps because of pent-up demand, visits in the Northeast have rebounded above 2019 levels in recent months.
Telehealth visits accounted for almost 50% of office visits in the early part of the pandemic. Since then, they’ve fallen to 11% of the total.
Contrary to the common belief that technology is primarily utilized by younger age groups, telehealth utilization was strong across all age cohorts. About a fifth of telehealth visits during the study period involved patients who were aged 80 years or older.
On the basis of their data, the Strata researchers drew a few conclusions:
Fee-for-service is a systemic risk to healthcare providers because it is so dependent on the volume of visits and procedures. Providers should move faster to value-based arrangements.
Hospitals must be able to quickly recast their plans and financial strategies to deal with volume shocks.
Hospitals should reexamine their telehealth strategies, because virtual visits were critically important during the pandemic.
“This report should compel health systems to accelerate their move to value-based models of care, fast track digital health efforts, and evaluate how to reduce their cost of care delivery,” commented Steve Lefar, executive director of StrataSphere for Strata, in a news release.
“It is more important than ever to understand cost and revenue drivers today and in the future. The time is now for leaders to quickly evaluate and start making changes.”