The COVID-19 Crisis has rattled the world. While the action in most other spheres of business has come to a screeching halt or at least slowed down to a snail’s pace, the healthcare industry is frenetically fighting this dreadful virus from the frontlines. The US Healthcare system has faced many challenges in the past but never before had it encountered a challenge of such a catastrophic scale. The latest CDC reports have pegged the confirmed number of persons infected with the virus in the US at a startling 632,548 and deaths at 26,930.
Even without data, we can plainly see that the cost of this crisis on our economy is going to be huge. The UN’s trade agency UNCTAD augurs that in 2020, the loss to the economy brought by COVID-19 can get as high as 1Trillion $. What will be the economic impact of the pandemic on our healthcare system that is already reeling under a heavy cost burden?
The cost of the pandemic for Providers
Hospitals are overwhelmed with the increasing volume of COVID-19 patients with hospitalizations in the last week reported at a rate of 12.3 per 100,000 population. Personal protective equipment, ventilators, and other requisites are short in supply and consequently have to be purchased at higher prices. This sudden stress on resources can soon prove to be too much for hospitals. Hospital Administrators warn that their struggle to meet payroll and rising supplies costs can bring operations to a standstill. Moreover, hospitals have postponed revenue-generating procedures and elective surgeries. Financial consulting firm Moody’s says that this can bring down the revenue of hospitals by as much as 40% per month.
Non-profit Organization, FAIR Health has made an analytical study on the cost of COVID-19 cases to hospitals and reports that hospitals on an average will incur around $73,000 per COVID-19 hospitalization out of which only $33,221 can be reimbursed. The study further reports that out of the estimated total cost of the pandemic of $362 billion to $1 trillion, reimbursement may cover only half. This means that hospitals will have to bear the loss of the remaining half. With the current reimbursement rate hospitals can lose anywhere from $ 2000 to $10,000 per case.
A more Acute Cash flow crunch for Physician Practices
Large Hospitals and health conglomerates, though they struggle to cope up with the cash flow shortage, may sail through the crisis with the reserves they hold. Most small physician practices, on the other hand, do not have such resources to fall back on. Private practices around the country have reported a drastic reduction in in-office visits since they have suspended non-urgent visits, preventative care, and elective surgeries keeping with CDC guidelines. Though these measures are necessary to stop the pandemic’s spread, they have precipitated a severe cash-flow crunch that threatens the sustainability of physician practices in the next 6 months to one year.
The cost of the Pandemic for Payers
Payers in the US healthcare system also have to bear the brunt of the high cost of this unprecedented crisis. Wakely Consulting Group conducted a study that estimates the cost of the pandemic for commercial health plans at $56 billion to $ 556 billion over 2020 and 2021 depending on the infection rate and how well people comply with social distancing guidelines. At a 20% infection rate in the population, more than 50 million can get infected with at least 5.5 million requiring hospitalization and 1.3 million requiring intensive care. And at an average cost of $30,000 for Intensive Care per patient, the total cost can escalate to well over $ 400 billion.
A small relief with the CARES Act
The Government has responded with a $2 trillion stimulus package through the Coronavirus Aid, Relief, and Economic Security (CARES) Act to mitigate the financial losses that the pandemic has wrought. This includes more than $100 billion in emergency funding to hospitals and a 20 % Medicare rate for COVID-19 hospitalizations. But with the enormity of the losses that the healthcare system faces, even this huge step by the Government may be insufficient to tide over the crisis. Co-ordinated action from the Government, payers, private players, suppliers and allied industries will be needed to ensure that medical practices and healthcare providers stay in business in the coming years.
Rannsolve is a leading RCM service provider based in Texas. We stand in solidarity with the physician community and offer our COVID-19 billing and other revenue cycle management services at concessional rates. Our processes and workflows have been carefully streamlined to maximize cost savings for our healthcare clients. Reach out to us today, if you are a provider in need of a reliable billing partner who can steadfastly support you in maintaining your financial health, especially at challenging times like these.
But it is not any less important.
As the first context of contact with the patient, it strongly affects the entire experience that a patient has with your healthcare service.
A 2017 study by the University of Utah reports that 39% of patients surveyed considered scheduling a timely doctor appointment as the most important expectation they have from a healthcare service.
That is not quite surprising when you consider the results of another study.
Confirm appointments by text or emailWhen a patient misses his/her appointment, it is not only the patient who suffers the consequence but the physician’s office too.
Leverage the potential of data analytics Data analytics has opened up unique solutions for problems in every industry and specialization and it could be very well explored for rectifying hitches in Patient scheduling too.
