2020 is challenging us to re-imagine integrated healthcare

August 20, 2020 2:27 pm

COVID-19 and other factors have damaged the financial foundations of healthcare delivery. We need a recovery plan, and some solutions are likely to involve still more forms of integration.

This year of the pandemic has revealed cracks in healthcare financing and delivery. Yet as in all times of upheaval, in addition to everything that has gone wrong, 2020 also has presented opportunities. We need to honestly assess our successes and failures, and then reimagine where integrated healthcare can go.

2020’s challenges

First, it is important to consider what went wrong in healthcare finance in 2020.

1. At a time of high stress and an intense need for strong healthcare performance, many healthcare organizations could respond only with physician and staff furloughs and deep operating losses. Similar to the way an over-extended housing mortgage industry brought on the 2008 recession, COVID-19 exposed a financially over-extended healthcare financing sector.

Healthcare financing did not meet its stress test.

2. Healthcare providers are now at risk for creating further cutbacks and/or mergers and consolidations for the wrong reasons. Balance sheets of many providers are telling them their only option may be to merge or close. These stressed providers include hospitals (particularly rural hospitals), health systems (particularly those that have heavy exposure to lower socioeconomic populations) and private practice physician groups.

There are many good reasons for further integration and consolidation. Here are just a few:

  • To create more synergies between primary care and specialty care
  • To reduce cost
  • To obtain wider-reaching information systems and more fully integrated health records
  • To achieve more economies of scale

However, integration that is forced on the parties by weak balance sheets is likely to be weak and ineffective.

3. Long praised on its “care for all,” healthcare’s safety net has developed a large hole. The problems ahead will disproportionately affect those patients and families with the least ability to pay.

One reason is that state budgets have been reduced by 50% due to the stay-at-home effects on sales and income taxes. State budget cuts lead directly to Medicaid budget cuts. And state-level cuts affect many other programs that address socioeconomic determinants of health.

Many states have limited ability to cushion the economic changes. Common impediments include constitutions that require annually balanced budgets and laws passed through taxpayer initiatives that limit annual tax increases.

4. Young healthcare professionals are dealing with unanticipated personal and career crises. The assumption has been that physicians and many others have long training periods but then have financially stable and lucrative careers to pay back their costs of training. Banks, landlords and mortgage companies have extended credit accordingly.

Yet this assumption may be challenged as young professionals increasingly perceive that healthcare is not the stable employment alternative it used to be. COVID-19 also has presented older healthcare professionals with challenges, including the need to limit their roles due to high personal health risk.

5. Inefficiencies have cropped up in many unexpected (as well as expected) places. Office processes that worked well when care was provided in an established healthcare facility may not work at all when part of the team is working from home. Patients get re-scheduled, sometimes more than once, and they don’t get the message and come to the wrong care site.

Protocols and workflows need to be changed to recognize social distancing in face-to-face patient visits, and often they initially don’t work as expected. Virtual healthcare options have presented new challenges, for example, software sometimes doesn’t always work from home computers. Zoom and related services can freeze or go down.

Healthcare teams have faced many other challenges amid the pandemic:

  • Supply chains are disrupted.
  • Some people who work very well in a personal setting do not work well in a remote setting.
  • Some families/living arrangements cannot accommodate another person working from home.
  • Some decision processes that work well sitting around a table don’t work well over Skype or Microsoft Teams.

But we also can celebrate many successes and the ways we have grown through the COVID-19 crisis:

  • Although healthcare finance took a big hit, clinicians still met patients’ most serious needs.
  • People who work in our industry are getting better at living with change; we are hardened for future changes.
  • Telehealth is exploding, offering the opportunity for new potential answers with lower costs and better patient experiences.

All these factors compel us to take time now to reimagine how things can work better.

Questions to help deconstruct and learn from problems and opportunities

One way to begin the reimagining process is to identify the key nodes and linkages in integrated care, then reassess them. For example, the link between patient and primary care is a key node, and many questions must be addressed in reassessing it:

  • How do we optimize the use of telemedicine?
  • Can we leverage the patient’s smart phone with the patient’s electronic health record?
  • Can we access specialists’ knowledge during or right after a patient’s primary care telehealth visit?
  • Can we develop a future-looking primary care process – one that is not only financially sustainable but also emotionally sustainable?
  • Where does artificial intelligence link to cognitive medicine?
  • How can health system leaders, including the CFO, identify quickly whether a practice or policy in the connection between primary care and the patient is not sustainable?

Another obvious key node is the link between payers and health systems. Here, the questions include the following:

  • How should payer contracts reframed so care is not hindered by the current fee-for-service contracts?
  • How can payer contracts facilitate optimizing the use of telehealth?
  • Can payment mechanisms work more smoothly as patients experience shifts, between a full-time and part-time economy, between employer-sponsored benefits and Medicaid, and/or between being furloughed and returning for an uncertain time?
  • Is there a way to ensure that vulnerable populations don’t fall between the cracks, such as ensuring there are enough providers willing to take them on?

There are many other key nodes, including between health systems and physician groups and between health systems and vendors. Each requires reimagining.

Reimagining and financing the future

Beyond reassessing the nodes in integrated care, we must determine which types of partners are best for the future and what kinds of leaders are needed today. Other key considerations include determining:

  • The shape of the ideal service area
  • The amount of risk and reward each part of the integrated system should bear
  • The appropriate risk bearing and financing approach
  • The right relationship between owning, partnering and contracting
  • When, why and how we should relate to different patient segments in different ways

It would be unfortunate to see integrated healthcare settle for returning to the status quo before the pandemic. The most common structures and relationships in integrated care go back to the 1990s or earlier. A lot has changed since then. But not enough has changed. It’s time to reimagine.


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