Pandemic fuels 2021 healthcare megatrends

By Scott Hampel

When I wrote about megatrends last year, the predictions were, naturally, forward-looking. Telehealth, for example, was important because of increased healthcare consumerism and the convergence of technologies to make its use quick and easy for payers, providers and patients.

Now when I look at telehealth as one of several 2021 megatrends, it’s tinged by the coronavirus pandemic. Rather than telehealth being a nice-to-have in 2020 with adoption over time, the service has become a necessity needed in real-time caused by the pandemic’s social distancing mandate and the highly communicable nature of the virus.

Each 2021 megatrend has the pandemic front and center. The pandemic exposed many issues facing the healthcare industry. Challenges and problems that weren’t a surprise, but simply rose to the top astonishingly quickly as the healthcare industry responded to the pandemic. The pandemic is and will continue to propel many analytics challenges and needs throughout healthcare.

Coronavirus sets the stage

Now that we’ve established the pandemic as the dominant megatrend across healthcare businesses worldwide, we’re going to take a deeper look at the pandemic’s impact on the industry: payers and providers, members and patients.

As COVID-19 rapidly descended, many different types of organizations changed to partial or fully remote workforce operations and took necessary measures to preserve the safety and health of employees. After securing operations, organizations quickly started to understand how they could help clients navigate the pandemic.

Much of the work in healthcare IT (HIT) was shaped by COVID-19. We wanted to help payers and providers understand the impact of the pandemic on business, financial and clinical outcomes to help healthcare remain viable for the many people working for the organizations or receiving care.

The following are 2021’s healthcare megatrends.

Telehealth goes mainstream as the new normal

The first major pandemic-propelled trend that everyone is talking about is increased telehealth usage. Many of us, my family included, began seeing our doctors online for the first time because of the pandemic.

The U.S. Department of Health and Human Services reported a staggering change for Medicare and Medicaid populations. Telehealth use was 0.1% of overall health services in January 2020, but by April it had increased to 45.9% of utilization. (Telehealth use by Medicare and Medicaid patients later decreased to 20%.)

Meanwhile, Definitive Healthcare reported in June 2020 that 33 percent of inpatient hospitals offered telehealth in 2019. By June 2020 that was up to 75%; another staggering increase. We see telehealth here to stay after COVID-19 is controlled. Utilization likely will come down from current pandemic levels, but industry analysts almost universally predict telehealth adoption will remain high as mainstream patients adopt and become comfortable with the technology. (Last year, an increase in the use of telehealth was one of our megatrends, though for different reasons.)

That said, there remain many challenges around reimbursement for telehealth, as well as a lot of concern about new analytics needs for payers and providers.

There’s a definite need to:

• understand and predict the utilization of telehealth; and
• measure the cost of and payment for telehealth in terms of an organization’s profitability expectations.

For these reasons, healthcare organizations should continue to monitor the telehealth trend through purpose-built dashboards and reporting as part of ongoing initiatives and 2021 priorities.

Elective procedures, care delayed

The pandemic caused a massive delay or cancellation of elective procedures and general care.  

McKinsey estimated the revenue loss for hospitals between March and June 2020 to be around $200 billion with a reduction of surgical volumes of 35%. While the volume of elective procedures dropped significantly, the same was happening in emergency departments (ED) across the country. ED visits were down 40% year-over-year.

A major concern is what will happen to the health of those delaying or ignoring their care needs during the pandemic. What will those delays cost an already financially challenged healthcare ecosystem?

Then there’s the complexity for hospitals around navigating which service lines—elective surgeries, for example—to re-open and when it should be done. They also must plan the start and stop of those services as the pandemic ebbs and flows, which is a major complicating factor.

Healthcare economics and population health solutions can help offer insights into members who are delaying care and offer a better understanding of the surrounding economics. These measures can help healthcare organizations plan for needed supplies and staff. This information also can be used to inform the opening of certain service lines and for bringing elective procedures online or offline again as dictated by the pandemic.

Health plan membership trends downward

Health plans have seen a tremendous shift in members due to the pandemic. Depending upon the current U.S. employment and unemployment rates going forward, you can see where the major shifts are forecasted:

• millions of members dropping out of commercial group coverage
• Medicaid membership increasing substantially;
• the numbers of uninsured growing; and
• growth of the individual lines of the health insurance business.

The pandemic has decimated many small businesses and driven high unemployment, hurting the economy in a multitude of ways. And while the stock market has generally maintained, the job market has certainly suffered. This has led to a rapid change in health plan membership.

A September 2020 HFMA research report found 70% of hospital CFOs and revenue cycle executives expect an increase of Medicaid and self-pay patients and a decrease of commercially insured patients. Meanwhile, AHIP, the big payer industry association, reported 7.5 million Americans lost their commercial group coverage in April and May. Centene, among the nation’s largest Medicaid managed care organizations, said it added more than 1.1 million members since March; many of the new Medicaid enrollees are those who have lost a job.

Scenario analysis using existing data can help health plans understand additional membership shifts caused by the pandemic.

From a financial perspective, this means payers must do all they can to retain key employer group accounts as the PMPMs (per member per month) in Medicaid are far less than they are in the employer-sponsored group business.

The supply chain breaks

Another pandemic-propelled trend is supply chain and service line stability and profitability. The pandemic exposed a major flaw and weakness in the global supply chain: the supply chain for commodity supplies, those most critical for everyday care lacked the flexibility and continuity to adapt to the emerging surge in demand.

We’ve all seen and heard myriad news reports around critical shortages of PPE (personal protective equipment) at different locations. There were hospital and governmental bidding wars over basic hospital supplies, ventilator manufacturing challenges and more.

The Advisory Board, a hospital industry research firm, said providers now will require suppliers to have contingency options that guarantee supply chain continuity. These options often come with a premium, but these types of plans likely are necessary for hospital executives to make informed risk-based decisions on supply chain commitments and costs.

With the pandemic and the associated supply chain shortages and problems, the healthcare industry will need effective data analytics to better understand the flow of supplies, while also building a demand and forecast plan. Scenario planning will assist with supplier contracting to help with a better understanding of supply chain contingencies.

Healthcare inequities emerge in real time

The pandemic caused legitimate concern around the inequities in healthcare delivery—especially defined by race and socioeconomic status.

While I wrote earlier about the increased prevalence of telehealth, one interesting statistic is that just 36% percent of people making less than $25,000 a year say they have access to the service. This is just one example of how the pandemic has brought healthcare inequities to the fore.

The pandemic also propelled a new recognition of behavioral health issues and the many challenges that are part of social determinants of health. News headlines indicate we’re seeing a 3X increase in depression and anxiety diagnoses during the pandemic.

The pandemic made clear to what many had already been aware of: Inequities in our healthcare system. As an industry, we can use data analytics to better understand the populations we serve and take thoughtful action to better help the underserved in 2021.

What’s next for 2021?

While the pandemic has and will continue to influence healthcare megatrends, each challenge and issue existed—albeit they were less apparent—before the virus affected people around the world. These issues will likely continue long after the vaccine is rolled out worldwide.

Healthcare has faced many very serious and concerning questions throughout 2020. Today, there seem to be many more questions than answers as they relate to healthcare, and we don’t see that changing much in 2021.

Nevertheless, the fact that we’ve been able to shine a bright light on these worldwide healthcare issues and challenges is perhaps the only positive to come from the pandemic.

Until next year, stay safe and healthy!