PHA Leaders’ Circle: Undercurrents in COVID-19’s Economic Impacts Favor Population Health
By: Jaan Sidorov, MD
Is the past (a new) prologue?
That’s the question population health experts should be asking as the profound economic impacts of the COVID-19 pandemic come into view.
- This will be first year ever recorded with a decline in national health spending;
- Admissions for stroke and heart attack decreased independent of COVID-related impacts on bed availability;
- Losses from less elective and non-COVID related hospital care are accelerating hospital prices upward;
- Nursing homes are struggling with a downturn accompanied by a corresponding uptick in homecare arrangements;
- Among physician practices, pediatrics was hit the hardest with important implications for childhood immunizations;
- Pharma has come through relatively unscathed.
However, hidden between these observations are some additional nuggets of information that should be of interest to my colleagues in the population health industry:
- Healthcare spending has grown between 4.35% to 5.6% since 2014, but dropped by 20.1% in April of 2020. In contrast, during that same period, the overall U.S. economy shrank by 31.4%. In other words, U.S. healthcare costs on a relative basis will continue to gobble up more of GDP.
- Hospitals may witness a rebound in 2020 bed occupancy thanks to pent-up demand, but some leading statistics suggest a lingering reduction in admissions that could carry over to 2021. As we heard at the 2020 PHA Innovation Summit and Capitol Caucus, public and private payers as well as investors are paying attention.
- As patient volumes dropped, physician interest in alternative payment arrangements has grown. As a result, provider acceptance of value-based care contracting is poised to go to the next level.
What could this mean for the population health management professionals leading at payers, providers, partners, and solutions companies across the country? While Casey Stengel’s caution about making predictions, especially the future, is apt, some personal expectations are:
- Rising hospital costs and a greater share of employer and government budgets in the face of an economic recovery will accelerate interest in healthcare alternatives. The “boat” of population health – even if it has a short-term cost – will rise as a result of the tide of insurer and investor interest in cost-effective solutions.
- Flagging acceptance of traditional inpatient care will be replaced by growing consumer interest in alternative sites of care. Population health, thanks to its success in delivering care that can be adapted to location or level of service restrictions, will accelerate this transition.
- If growing value-based payment arrangement contracting terms are the prose, then population health management is the poetry. During the Population Health Alliance’s Forum and Summit meetings this year, we heard about the innovative art and science of supporting high-value care for patients and populations. Now that the physician community has growing interest in the topic, we can expect insurers to gain traction with this in their provider contracts. Let this be the call for the population health community to stand ready to help all payers and providers succeed in their goals.
Make no mistake: 2020 has been a terrible year. As we continue to dig out from the pandemic, cost trends, shifts to home care and interest in alternative payment models were already present. It looks like those trends will only accelerate population health in 2021.