Reopening of Elective Surgeries and Alleviating Pent-Up Demand

Reopening of Elective Surgeries and Alleviating Pent-Up Demand

By Jorge Serrano, Growth Manager, EdjAnalytics

The coronavirus pandemic has had a significant impact on hospital finances in the last couple of months, with organizations reporting steep volume, revenue and ultimately hospital operating margin declines. Hospitals, clinics, and doctor offices have been essentially empty due to many states banning the performance of elective procedures and patients concerns over safety. As the country unwinds from its three month lockdown, municipalities are beginning to allow the performance of elective surgeries and hospitals more than ever, need a data-driven solution that quickly identifies and reaches the proper candidates.

COVID-19 has not affected hospitals across the country in the same way. In many areas, particularly in more rural parts of the country, COVID-19 patients have not materialized to the extent that was expected. In many hard-hit regions, the care of COVID-19 patients is currently manageable and states are starting to change their guidance, allowing for outpatient surgeries to begin. With evident reductions in hospitalizations, emergency room visits, and doctor visits, this trend may signal another looming problem: many people, especially those with chronic conditions and newly surfacing serious illnesses, are not getting the care they need. It is highly unlikely that there’s been a dramatic drop in heart attacks, but rather people are simply not getting the care they need. Being able to identify who these people are by using a data-driven strategy is imperative, as unmanaged chronic care conditions will simply lead to higher upstream cost for patients, healthcare systems and insurers.

Increases in COVID-19 cases have not offset the drastic declines in patient volumes in other parts of the health system. With hospital revenue losses tallying every day during the pandemic, health systems must prepare for a long recovery. Each hospital’s revenue recovery program will be unique based on how the COVID-19 pandemic has impacted their communities, but all leaders will need to address certain clinical and operational factors. According to a recent study by Crowe, the average hospital will need to operate at 110% of previous capacity for six consecutive months to recover from lost patient volume. This might mean that hospital systems would be forced to perform elective surgeries through the middle of the night in order to recoup losses.

The shutdown of our healthcare system has also severely impacted employment. Due to lack of elective surgeries, these changes have had predicable results on a system’s revenue, which have decreased by 50% to 90%, leaving hospital leadership across the country with no choice but to begin furloughs, cut salaries, and reduce shifts, among other expense reduction tactics. Kaiser Permanente, one of the largest and most established organizations, recently secured a $2.4 billion line of credit showing that even the strongest are not immune.

Regional & Rural Hospitals

Prior to the COVID-19 pandemic, research already highlighted that a quarter of U.S. rural hospitals are at a high risk of closing unless their financial situations improve. Rural hospitals are not only essential to the health and wellness of nearby residents, they are often a rural county’s largest employer and a crucial economic link for other local businesses and job creators.

The CARES Act has created provisions to help small market hospitals. The Department of Health & Human Services is aware of this and recently mentioned that it would be distributing $10 billion in payments to rural hospitals and providers, who are already working on narrow margins. This is in addition to the Paycheck Protection Program and Health Care Enhancement Act, passed by Congress in late April which allocated another $75 billion to the fund.

The additional $10 billion in funding will be used to cover America’s rural hospitals’ expenses, receiving a minimum based payment plus a percent of their annual expenses, HHS announced. This method tries to account for operating costs and lost revenue incurred by the providers for providing both inpatient and outpatient services during the pandemic.

Identifying Patients Who Chose to Leave Communities for Care

Out-migration for care (e.g., bypassed their local area and hospital to receive care elsewhere) is a severe problem for rural and small regional hospitals. Every patient that out-migrates for care, where that form of care is also offered in their community, represents a revenue loss for the local hospital as well as revenue leaving the local economy. Additional factors that contribute to the rural hospital crisis include payer mix degradation, an inability to leverage technology due to a lack of capital, clinician shortages, and suboptimal revenue cycle management.

People tend to leave their geography and travel to more urban area for care due to various factors. Despite community essentiality, many patients are bypassing their local rural hospital to receive care elsewhere. Guidehouse reported that more than three in four patients residing in rural counties with a local hospital traveled for care, versus 35% of suburban patients and 23% of urban.

Third party data sources, like the Dartmouth Atlas, document glaring variations in how medical resources are distributed and used in the USA, can shed light into geographical areas that may be more susceptible to rural flight and population out-migrating for care to larger urban hospitals.

Rural hospitals and their communities are facing a crisis that has been lingering for decades so investing in predictive machine learning capabilities at an affordable price point makes this situation that much more pertinent. Implementing a data driven approach, like the Jump by Edj solution, can alleviate such problems by creating audience & customer maximization toolsets that drive top-line revenue and cuts campaign costs for health systems.

Alleviating Demand

There is tremendous pent-up demand for elective surgeries and other delayed procedures due to social distancing guidelines, shelter-at-home orders, and other coronavirus restrictions that need prioritization. EdjAnalytics is aware that hospital systems’ bottom line is being greatly affected by not being able to perform elective surgeries.

EdjAnalytics is working with hospital systems to help them identify which patients should be prioritized using the Jump by Edj solution.

Utilizing Jump by Edj, hospital systems are:
  • Using advanced analytics to predict which patients are at highest need for elective surgeries
  • Maximizing marketing spend by laser-focusing patient communication
  • Increasing volume of lost demand

The best cure for the harm done by the COVID-19 pandemic to our healthcare system, is to get the system back open for business. Jump can identify patients who have delayed procedures due to the pandemic, allowing hospital systems to quickly prioritize patients and recapture demand with a focus of getting back to pre-pandemic volume levels.

Contact us to learn more or receive a demo of Jump by Edj.
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