How to Shorten the Long Road to COVID-19 Economic Recovery

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Addressing patient acquisition and retention issues that began years before the pandemic will be key to getting back in the black

By Angie Franks

Even though the COVID-19 economic recovery has begun, hospitals and health systems still face a long road ahead. The delta variant of the virus is driving up hospitalizations at a faster rate than the alpha variant among unvaccinated patients. As a result, organizations are experiencing financial challenges in 2021 similar to the first surges of 2020.

For example, while operating margin and patient volume were higher for the first seven months of 2021 compared to 2020, it is still lower compared to pre-pandemic 2019, according to a recent report based on data from more than 900 U.S. hospitals. Likewise, adjusted discharges are down 4% and emergency department visits are down 13%. 

Despite this challenge, health systems have the opportunity in this uncertain time to mitigate risk and improve financial performance by improving operations. This includes acquiring and retaining patients—as well as repatriating them back into the system if they have left. A focus on optimizing healthcare access will support health systems’ financial recovery, but it is also a sustainable, long-term revenue enhancement strategy that has never been more important. 

A critical component of this healthcare access strategy is to ensure the right technology and strategies are in place to help patients navigate to the next optimal care setting faster and easier, freeing clinicians to focus on patient care to improve experience and outcomes. Ensuring efficient access to the appropriate level of care—via transfers into and out of the acute setting—is critical for new patient acquisitions and to prevent leakage.

New Research Reveals Preventing Patient Leakage to be a Top Priority

Patient acquisition and retention were major concerns among health system executives even before the pandemic, according to The Patient Keepage & Leakage Report. This survey of 138 health system senior leaders, primarily C-suite executives, was released in 2020 just weeks before the first major COVID-19 outbreaks in the U.S.

The report is more relevant now than ever. It provides an in-depth, state-of-the-industry snapshot of the views of executives on the challenge of patient leakage, in which patients seek care beyond their networks. In the report, 96% of those surveyed said addressing patient leakage is a top organizational priority. Similarly, 75% said reducing the number of patients who leave their network is essential to reaching financial goals.

The results of the survey make it clear that attracting patients back to health systems and retaining them will require a focus on optimizing healthcare access and orchestration. This is particularly true when it comes to higher margin services delivered within specialty centers. As health systems rebuild, they need to take a system-wide view of a patient’s entire care episode. Leveraging technology tools and access-focused strategic approaches can expand patient volume to pre-pandemic levels—and higher.

Rebuilding Networks

The research for The Patient Keepage & Leakage Report was conducted by an independent market research firm, and issued by Central Logic. It includes responses from a random sample of healthcare executives involved in direct patient care oversight, hospital administration, finance and operations. Eighty percent (80%) of respondents were C-Suite executives.

Executive responses are especially meaningful given that many health systems’ Centers of Excellence, such as those focused on neurology, cardiology, and orthopedics, have been hit especially hard hit during the pandemic. Patients can arrive at these centers from the emergency department (ED), where volume also significantly decreased in 2020. At Cleveland Clinic, for example, emergency department referrals to its specialty centers for ST-segment–elevation myocardial infarction (STEMI), stroke and aortic emergencies dropped by 39% overall and by nearly half (49%) for STEMI during the pre-delta variant surges. 

While some specialty center referrals come from the ED, this is not the primary source of referrals for specialty centers. According to The Patient Keepage & Leakage Report, executives reported that 35% of specialty center referrals to come from their own EDs. Only 22% believed that EDs alone “definitely” drove enough volume to support those Centers of Excellence.

This means referrals from community hospitals and other patient transfer locations must fill that gap.  According to the report, 65% of executives surveyed said creating ready access for these patient transfers was a priority for their hospital in 2020.

Lack of Visibility and Processes

Many executives report not having accurate or comprehensive data to track patient transfer activity. For example, more than 20% of healthcare executives do not know which service lines are most impacted by patient leakage. More than 38% of leaders did not know or were not confident about their health system’s visibility into leakage.

A possible cause for this lack of awareness is that many hospitals and health systems have historically not recognized that leakage was a problem and did not put processes in place to track it. This mindset is changing due to the advent of value-based care payment models, healthcare consolidations and highly competitive healthcare markets. Better tracking of patient movement into and out of health systems has emerged as a top priority, as outlined in the report. 

Nearly 80% of executives said value-based care payment models have made addressing patient leakage a top priority. Under these payment models, such as Medicare accountable care organization (ACO) contracts, the ACO is responsible for managing the care for each Medicare beneficiary within their network. When the patient seeks care at a provider outside the ACO, the provider experiences a negative financial impact. The ACO loses revenue, but also incurs costs attributed to that beneficiary. Those costs come directly out of the organization’s reimbursement or incentive payment from CMS.

Access to care also seems to be a significant differentiator, according to survey respondents. Nearly half (46%) of executives surveyed reported patient leakage was due to easier access at their competitor.

Patient Leakage Tracking and Data

Having the tracking processes and data available to spotlight when patients leave the health system is essential. Here again, many executives reported challenges. For example, 45% of executives said they do not have the information or the tools necessary to reduce patient leakage. Twenty-seven (27%) of these leaders reported that this is specifically due to insufficient data tracking and reporting. 

An IT infrastructure that offers health systems real-time visibility to bed availability and on-call providers within their health systems is essential to overcoming these challenges. Relevant and meaningful data to evaluate patient volume opportunities is also critical. Likewise, providers need supportive technology such as referring provider portals to streamline hospital admission access. The portal should also facilitate consultations between physicians at the time of admission. This type of support creates strong reciprocal relationships between health systems and providers and optimizes care access for patients. 

Interestingly, 87% of executives in the survey had a formal plan in place to address patient leakage. That plan, however, has in some cases been put on the back burner during the COVID-19 pandemic. As health system leaders begin to look at ways to get back in the black, it is recommended that they consider meaningful data about patient care access, leakage and retention to help them achieve their objectives and restore their organizations to sustainable financial health.

About the author:

Angie Franks is CEO of Central Logic, a flexible, purpose-built solution that empowers hospitals and health systems to operate as one connected network of care. 

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