“You can’t cut your way to prosperity.”
One of the challenges for executive teams in managing to the end of a crisis—especially an extended crisis like this one—is addressing the loss of revenue. In more normal times, the need to replace service line revenue is a gradual one. As service lines age, demand and revenue decrease with new competition. Over time, contracts are lost to competitors. The need to create new sources of revenue is gradual.
But in this pandemic crisis, we’ve seen service lines shuttered with little notice, cost increases that have changed programs from profitable to losing propositions, and a host of new competitors. The economic forecast for the U.S. is not great—and health and human services (at 17% of the country’s gross domestic product) will inevitably be affected by the downturn. The need to find “new revenue” is more pressing.
So where to look? Right now (this could change in a month), I see a few key areas of opportunity for provider organizations serving consumers with chronic conditions and complex needs—each of which we have covered over the past two months.
1. Expansion of telehealth—Many organizations have (whether willing or not) taken the plunge and are providing virtual care services. But, for many executive teams, the perspective is to serve “current consumers.” This is an area for expansion—new payers, new consumers, new services, and new geographies. And, the competitors are moving into this space—see Cigna Adds Talkspace To Its Rapidly-Expanding Virtual Network, AbleTo Launches Full Suite Of Mental Health Solutions To Address Growing Demand For Care, and Centene & Quartet Health Expand Partnership Nationwide To Help Ensure Members Have Access To Critical Behavioral Health Care During COVID-19 Pandemic & Beyond. For more on the options for expanding virtual care, check out:
- Going ‘Virtual Service’ – Reaching Consumers Where They Are At With Telehealth & More – An Overview
- Evidence-Based Telehealth Practice In The Time Of COVID-19
- Improving Access To Care: The Benefits, Best Practices & Lessons Learned Implementing Telehealth Services
2. Hybrid service models—Not all services will remain “totally virtual” in the “new normal.” The market advantage will go to the organization offering service lines that combine the depth of face-to-face services with the convenience and cost reductions of virtual care. Think of services that fit into integrated care models with reimbursement based on performance. For more on these new hybrid models, check out:
- Blended Virtual & Onsite Services For Continuity Of Care
- The Future Of Residential Treatment: How Technology & Innovative Program Models Are Redefining Service Delivery Models
- Best Practices In The Shift To Virtual Health: How To Integrate Digital Treatment Tools Into Programs & Treatment Models
3. Specialty primary care—The pandemic has had a big impact on primary care. Practice revenues are down (see Primary Care Practices Endangered From Steep Declines In Revenue And Staff, New Survey Shows) and it is likely that many private practices will close (see 35% Of Primary Care Professionals Believe A Majority Of Independent Practices Could Close By End Of COVID-19 First Wave). Physician salaries are also down (see COVID-19 Reducing Physician Compensation, Job Options). At the same time, the demand for primary care services for consumers with complex needs has never been greater and health plans are starting to move primary care payments to capitated models (see Blue Cross Of North Carolina Launches Program To Pay Primary Care Practices To Switch To Value-Based Model). For more on developing “whole person care” service lines, check out:
- The OPEN MINDS Integration Summit: New Models For Primary Care, Behavioral Health & Social Service Integration
- The Systematic Approach To Integrated Health Care: The Data You Need To Make Primary/Behavioral Health Integration A Success
- Integration, The End Of The Carve-Out & The Importance Of Financing – The Health Plan Role In Facilitating ‘Whole Person’ Care
4. Intensive home-based services—For good reason, consumers are hesitant to consider any type of residential facility unless absolutely necessary (they won’t even stay in hotels—see While Summer Rentals Soar In New York, Hotels Struggle Amid COVID-19 Concerns). Nursing homes, assisted living facilities, and residential treatment facilities are experiencing falling census and revenue declines (see Nursing Home Problems Are Problems For The Entire System) as consumers and payers look for alternatives. There are interesting developments here (see Rhode Island Governor Announces Changes To The Long Term Care System; Investments To Create More Home-Based Care Options Amidst Spread Of COVID-19 In Congregate Living Facilities and California Expanding Enrollment In Home & Community-Based Alternatives Program).For more on developing service lines delivered via home-based care, check out:
- Mastering The Art Of Delivering Home-Based Services: Changing Management Models & Consumer Engagement
- Community-Based Treatment Through Technology: Remote Monitoring, SmartHomes & More
- Open Forum On The Future Of Managed Care For I/DD Services
5. Housing alternatives—Housing has always been an issue but expect more housing dislocation as the economic outlook sinks and rental support programs decline. Creative approaches to meet the need for stable housing will be in demand. For more on housing-related initiatives, check out:
- Housing & Health Care: Emerging Models To Provide Housing & Treatment Services For Complex Consumers
- Taking Action On Social Determinants: New Social Support Models For Consumers With Complex Conditions
- Innovation By Design: Capturing Value In Health Care
My colleague and OPEN MINDS Senior Associate Paul Duck pointed out that “While most provider organizations are addressing the pandemic by cutting costs, the more progressive organizations are innovating and reinventing their service delivery system and are well positioned for post-pandemic opportunities.” Mr. Duck provided a few tried-and-true tips on increasing revenue in his recent web briefing, Aggressive Business Development Strategies – Adding To The Top Line With Breakthrough Services. The first is to assess whether any of these emerging market opportunities “fit” with your organization’s longer-term vision and recovery plan. The second is to do the vetting work and “due diligence” required to evaluate specific opportunities (for more, see our guidebook on new service line development, How To Develop A New Service Line: An OPEN MINDS Executive Reading Book On Building A Diversification Strategy & Conducting A Feasibility Analysis). The third is to think creatively about expanding a revenue base in a new area. Identify at-risk competitors to form a strategic partnership or enter into new markets (see Matchmaker, Matchmaker, Why Do I Need To Find A Match? and M&A In Post-Crisis Recovery Strategy—Why, How & When?). And, as you look to building new revenue streams, I would also suggest these OPEN MINDS resources:
- How To Develop A New Service Line: An OPEN MINDS Seminar On Building A Diversification Strategy & Conducting A Feasibility Analysis
- The Tools You Need to Successfully Launch a New Service Line & Diversify Your Revenue Streams
- Strategic Revenue Diversification: What Are The Options? How Do You Decide What Options To Pursue?
- Finding Opportunity In Adversity: Leadership Lessons From The COVID-19 Crisis
For even more, Elite-level members can request their organization’s revenue growth strategy through our new QuickConsult program (call 855-559-6827 or email firstname.lastname@example.org). And, don’t miss these upcoming Elite-member web briefing and technical assistance sessions, part of The OPEN MINDS Executive Blueprint For Crisis Recovery:
- Getting Paid More For What You Do – Tactics To Increase Fees & Rates From Payers & Moving To New Reimbursement Models: August 6 at 1:00 pm EDT, led by OPEN MINDS Senior Associate Paul M. Duck
- Options For Managing Staffing Costs – Productivity Management, Outsourcing, Technology Solutions & More: August 27 at 1:00 pm EDT, led by OPEN MINDS Senior Associate Ken Carr
And as usual, we’ll continue to provide you with the resources to assist your team on the road to recovery—including the latest developments in the pandemic crisis. Here is new coverage and resources related to the pandemic.
Testing & Related Efforts
On July 17, 2020, the North Carolina Department of Health and Human Services announced it has selected 39 vendors, among them health and human service provider organizations, to conduct testing and contact tracing for COVID-19. These organizations represent the state’s initial pool of qualified vendors to support the state’s response to COVID-19.
Ridesharing company Uber has rolled out a service to give public health officials quick access to user data to track coronavirus cases. The contact tracing service will be provided for free, and is being introduced to public health officials in all countries where Uber operates.
The Centers for Medicare & Medicaid Services (CMS) is preparing to allow Medicare home health provider organizations to continue using telehealth to provide home health services as they have been under relaxed regulations due to the COVID-19 public health emergency.
CMS is providing help to nursing homes located in areas with a high number of COVID-19 infections in the community. The help includes point-of-care rapid testing devices able to process 20 tests per hour plus technical assistance.
Federal officials are partnering with several health systems and telehealth companies to develop a nationwide telecritical care network, including a separate telemedicine platform for the Department of Veterans Affairs.
Supporting Vulnerable Populations
This OPEN MINDS reference guide provides key statistics related to the effects on the pandemic crisis on nursing homes. The reference guide also highlights the rules and precautions laid out by the Centers for Disease Control and Prevention for nursing homes in the U.S.
On June 2, 2020, Horizon Blue Cross Blue Shield of New Jersey announced it had completed the statewide expansion of its Horizon Neighbors in Health demonstration project that addresses social determinants of health. Due to the COVID-19 pandemic, the program has been adapted from face-to-face engagement during in-home visits by a community health worker to telephonic engagement.
Protecting frontline staff, including pharmacists, pharmacy technicians, student pharmacists, and other pharmacy staff, is a top priority. This resource provides recommendations for workflow improvements that can decrease the risk of exposure to individuals infected with COVID-19.
Using guidance from the American Pharmacists Association, this resource includes tips for essential health care professionals on protecting oneself, consumers, and family members from the spread of COVID-19. It also includes guidance on the effective use of personal protective equipment for pharmacy personnel.
Protecting health care personnel from COVID-19 is essential. This guidance outlines the basics of COVID-19 symptoms and prevention, and includes additional information on practicing pharmacy and managing well-being to assist frontline health care professionals.
The American Pharmacists Association provided updated guidance for pharmacists and pharmacy staff working in ambulatory care and community pharmacy settings when encountering an individual with COVID-19.
Shatterproof released its national strategy the Movement to End Addiction Stigma. Shatterproof identified nine commonly cited drivers of the opioid epidemic, seven of which are either partially or entirely driven by stigma.
The Minnesota Department of Human Services issued new guidance allowing thousands of adults who live in group homes and other residential care facilities to attend day centers across the state. Centers have been closed since late March under restrictions meant to prevent the spread of COVID-19.
This article summary explores the effects of the COVID-19 pandemic, social distancing, and economic crisis on mental health and addiction. The data were collected from a Kaiser Family Foundation study in late March 2020.
UnitedHealthcare Dental continues announced the launch of a new offering for teledentistry services designed to reduce unnecessary emergency room visits and more efficiently get individuals to the most appropriate setting for in-person care. The goal of the new offering is improve access to oral care, while lowering costs.
Tracking The Disrupted Landscape
Over the 2020 operating year, primary care practices in the United States could lose a total of $15.1 billion in revenue due to COVID-19. This equals a loss of $67,774 in gross revenue per full time physician, from an anticipated base gross revenue of $542,190 per physician had COVID-19 not happened.
The class action complaint was filed on June 8, 2020, against the the State of Connecticut. The plaintiffs are residents at Connecticut Valley Hospital and Whiting Forensic Hospital. The plaintiffs challenged the state’s failure to take adequate steps to protect residents of two state psychiatric hospitals from contracting and dying from COVID-19.
Cases of COVID-19 were 5.5 times higher among prisoners compared to the general population from March 31 to June 6, 2020. Overall, the prison case rate was 3,251 per 100,000 prisoners, while the U.S. case rate was 587 per 100,000 individuals.
On April 20, 2020, a lawsuit was filed against the state of Connecticut alleging that the state failed to sufficiently protect residents of two state psychiatric hospitals from contracting and dying from COVID-19. The facilities are Connecticut Valley Hospital and Whiting Forensic Hospital.
Between March and May 2020, an estimated 1.64 million people employed by non-profit organizations lost their jobs due to the COVID-19 pandemic public health emergency. This equates to more than 13% of those employed by a non-profit organization, and about 8.8% of all job losses during this period.