Public Policy Update

COVID-19 Reveals Silver Linings

Hospital policies and procedures will improve in the wake of the new coronavirus.

By Topic: Law Policy and Regulation Public Health Disaster Recovery Disaster PreparednessDisaster Recovery


The long-term impact of the coronavirus pandemic on the U.S. economy and the health delivery system is still being assessed. What’s clear is that it has thrust hospitals to the forefront of public consciousness.

As the surge progressed, attention focused on the adequacy of beds and supplies and the heroism of front-line caregivers. Administrators transitioned to crisis mode: The immediate availability of N95 masks, ventilators and ICU beds displaced all other concerns.

It’s clear the pandemic has had a profound negative impact on hospitals. Operating margins have disappeared. Debt covenants are being renegotiated. Uncompensated care is up, and workforces are stretched thin. However, there are silver linings to be found for hospitals from the COVID-19 pandemic.

Elevated Strategic Imperatives: Public Health and Emergency Preparedness
The U.S. public health system is a network of federal, state and local agencies that monitor disease outbreaks at home and abroad under the umbrella of the Centers for Disease Control and Prevention. 

Infectious diseases and social determinants of health that heighten a community’s susceptibility to infection are not a primary focus for most hospitals, medical practitioners and insurers. Epidemiology and disease prevention are typically out of scope until they require treatment. Often, that’s too late.

The COVID-19 pandemic was predictable: it’s the fifth global coronavirus pandemic in 20 years. Warnings were sounded as early as April 2019. However, CDC guidance about the COVID-19 pandemic was slow, leaving some hospitals and physicians ill-equipped to respond to the eventual deluge of patients. 

Ultimately, this inadequate level of preparation will bolster public awareness about disease surveillance, investments in public health programs will grow, and closer collaboration between public health agencies and local hospitals will be a top priority in every community.

Accelerating Technology-Enabled Virtual Care
One of the key provisions of the Coronavirus Aid, Relief and Economic Security Act is an emphasis on and increase in the use of telehealth in patient care. Studies show that virtual visits could effectively replace office visits, but physicians pushed back citing three concerns: 1. the potential for breaches of patient privacy, 2. the inadequacy of virtual interactions in capturing vital patient information (e.g., signs, symptoms, risk factors, comorbidities) and 3. low reimbursement by private insurers. A 2019 survey of physicians conducted by a telehealth company reports physicians’ willingness to use telemedicine increased from 57% to 69% between 2015 and 2018, but only 22% were actual users. Physician reluctance was the major deterrent to wider use of telehealth before the pandemic. 

Public acceptance of telehealth is not an issue. A study published in JAMA in 2018 found that from 2005 to 2017, there were 383,565 telemedicine visits by 217,851 patients growing at a rate of 52% annually. The mean age of users was 38.3 years; 63% were female, 83.3% resided in urban areas and telemental health (53%) or primary care telemedicine (39%) were the major reasons for use.

Insurers support increased use of telemedicine. Legislators in 32 states have passed parity laws to advance its use. Thus, barriers to telehealth were lowering as the pandemic hit the U.S. health system. The CARES Act pushed it into mainstream delivery by requiring insurers to cover it and waiving physician culpability for HIPAA violations. As social distancing was implemented, clinicians used telemedicine out of necessity. 
Consequently, the use of telemedicine in patient care will accelerate as physician resistance shrinks, insurer coverage increases and consumers adopt it more widely.

Rationalizing Acute Resources
The biggest and potentially most consequential result of the coronavirus is likely a fresh discussion about the role, scope and optimal arrangement of hospital services in our system. It’s a delicate but inevitable deliberation we’re destined to have.

Today, there are 6,142 hospitals in the United States: 5,197 (85%) of these are community hospitals operated as private for-profit (2,937), investor-owned (1,295) or public hospitals (965). Some are big; most are small. Some are very profitable; many are not. Some offer a full range of preventive, chronic, acute and long-term care services; most don’t. It’s a highly regulated sector where local competition is intense and operating margins are shrinking. 

The COVID-19 pandemic represents the single biggest threat to the viability of hospitals in a generation. “We believe the pandemic will result in sizeable increases in operating costs, particularly for labor and supplies, reduced volume and revenues related to elective and nonessential healthcare needs, reliance on working capital lines of credit, and material declines in unrestricted reserves and nonoperating revenue as the investment markets weaken,” S&P Global Ratings states in a March 25 report. 

Every hospital was required to delay or cancel elective surgical and diagnostic procedures and nonemergency office visits to prepare for the coronavirus. That meant 50% to 80% of a hospital’s revenues disappeared for two months in most communities. Treatment of COVID-19 patients resulted in as many as 20% of front-line caregivers being infected. Furthermore, uncompensated care skyrocketed as the ranks of the uninsured increased by 15 million.

What’s ahead for hospitals? As a direct result of the pandemic and its aftereffect on the U.S. economy, hospital consolidation will accelerate, and approval by state and federal regulators will weigh public health preparedness more heavily. In all likelihood, that means hospitals will consolidate operations, reallocate capital to preventive and primary care, and rationalize investments in traditional acute programs.

Therein lies the third silver lining: The pandemic will require hospitals to rationalize traditional acute care programs to fund investments in primary care and public health services.

As hospital leaders settle into the post-COVID-19 new normal, day-to-day operations will be modified based on lessons learned. All will refresh policies and procedures for infection controls, procurement, ED triage, formulary design, surge staffing, crisis communications, patient transportation, security and much more.

How fast and in what forms these changes occur is hard to predict, but all are inevitable. What’s also inevitable are the silver linings that are likely results of the coronavirus. 

Paul H. Keckley, PhD, is managing editor of The Keckley Report (