Re-opening in the post COVID-19 era

Hi there. My name is Erik Johnson. I'm the vice president national practice lead for value based care within Optum Advisory Services. I wanted to spend a few minutes talking about how we're thinking through some of the challenges, principles and assumptions providers need to consider as they think through the next 90 to 120 days as they lean into reopening their clinics and reopening their hospitals in the wake of the initial surge of the pandemic that we're all experiencing right now.

Three questions that we get asked all the time when we talk to providers are listed there at the top of the screen. What do we do about what's happening right now and in which we're working have already sort of gone through the initial stage of a pandemic surge, and sort of are on the down slope of that curve. The emergency has lessened its urgency, but we are starting to see light at the end of the tunnel about what do we do next.

And that's the second question. When do we start returning to normal? What does normal look like? And when do we feel like we will have the capacity to open back up again? And then the final question related to that is once we do open up, what are we going to do the next time he surge or a hotspot emerges in our market. Each of these questions is obviously related, but they all have different objectives. In that first phase that we're going through right now, the question has really been how do we get to a new place on supply and demand. How do we maximize the amount of beds and ventilators and ICU capacity that our health systems have while at the same time trying to mitigate as much as possible the inbound demand from the patients who might've been infected.

The second set of objectives is really trying to determine which services to go live with to accommodate some of the pent up demand that has built up over the last three months, and how do we do that safely system wide - not just within our own health system, but across the entire healthcare ecosystem that we all rely on to make referrals and to make sure that our patients in the course of their journey of care get the best possible treatment at the right site of care.

And then related to that, finally, is that we know that this isn't over. We know that there are going to be continued hot spots and flare-ups in our individual markets. Is there a way to predict and manage those hot spots going forward in a way that allows us to get ahead of that surging demand while maintaining some of our normal business and clinical operations. That will require a much broader coordinated effort between payers, providers, health systems, and public health officials at the state and local level. Those are really the three pressing issues that a lot of our clients are facing right now.

Here we list 10 assumptions I think that are important to keep in mind as we get onto the other side of that initial surge. And I won't plunge the depths of all of these, but I'll run through them really quickly. I think the first thing to consider is that we probably will not see a vaccine for at least a year, possibly 18 months, which will put us through another flu season and the corresponding coronavirus virus outbreak sometime in the late fall or early winter. But between now and then, we will continue to see local hot spots arising depending on the of stay in place, orders at the state and County level. Despite the varying lengths of those orders, we do think that the economy will gradually start to open up over the next six months. Again, contributing to some of that localized hot spotting. And even after that gradual reopening, the recession is likely to be prolonged. Some have it going out three years. We're not in a position to make a judgment about how long the recession actually will be, but it will last probably beyond the summer.

There are going to be a lot of policy responses at the federal, state and local levels that are going to require providers to adapt to the new policy reality. Some of those will be very helpful in aiding and embedding the response and the ability to reopen capacity, but some of them will be fairly nuanced and require some patience. Many of you have already started to engage in telehealth by taking advantage of the federal waivers that we've seen come online over the last 60 days. I would expect that telehealth is going to be a "need to have" in the months and years ahead. I think we're going to shift to a more permanent footing with regard to telehealth and its utility in managing low level, low acuity demand out of the clinic and out of the emergency room.

A couple counterintuitive things to keep in mind too. If you are operating in a market that had initial success with some of that social distancing, I'm thinking particularly on the West coast where they went to social distancing early, that is going to in some ways slow down the adoption of herd immunity in some of the communities and that will present a real risk of sudden surges in new cases as we go into the fall, so something to keep an eye on.

As you are reopening your business, you are likely to see the payer mix start to veer a little bit more sharply towards exchange and Medicaid based coverage given the sudden job losses that we've seen across the country.

And as you think about reopening to normal business, not all service lines should or will be brought back online simultaneously, or immediately. I think it's really important to establish a cadence going forward about which ones can meet the urgent and postpone demand while some of the more elective and cosmetic procedures might have to wait an additional period of time.

But despite that pent up demand that's built up over the last 60 days, there's really no way for us to understand right now what the consumer response may be in stepping back into a hospital or back in a healthcare setting. This is a uncharted territory for all of us. We don't know what the consumer hesitancy is going to look like on the side of this, but we are starting to make models within Optum to sort of project what that demand might look like, and hopefully try to do it upon a service line dimension.

Some of the waves that we might see after we get to the other side of the curve in all of these markets I think are going to vary by locality and it will depend on a number of variables interacting at the same time - the most important of which is probably the policy variable. How soon will the stay in place orders be lifted? And how soon will the social distancing rules be relaxed? The sooner those are relaxed, the more likely we are to see a sudden surge or a large wave of second order coronavirus cases hit clinics and hit hospitals that will further strain the health care system that has been under an enormous amount of strain over the last three months. So it's an important thing to keep in mind as you deal with the policymakers in your area, as well as in planning for your own resource and deployments.

We may also see more of an oscillating wave there in the middle, that orange curve that looks like a sine curve, where we will see modest outbreaks here and there as the economy begins to open up and fits and starts across the country. That will require health systems and providers to be fairly flexible in how quickly they can shut down and reopen as those waves hit.

And finally, in those communities where herd immunity really does start to take hold relatively quickly, I think we will still see scattered hotspots, which should be accommodated fairly easily by the health care system provided that, there is coordination between public health factors and private health factors.

One thing that will determine all of this is our intelligence on testing and antibody presence in the communities. We still suffer from a lack of great visibility and statistically significant samples in the testing of the population that is coming online day by day, more and more. But we're still not quite at critical mass. And to the degree that public health agencies can collaborate with you and your labs to facilitate and expedite the ability to test more and more of the population, the steepness of some of these curves should be reduced going forward.

Making the go, no-go decision about whether to open up very quickly is really going to be an individual institution and individual practice decision, and it's going to be a combination of art and science. On this slide we list just five of the metrics that we think you should be managing toward and keeping track of as you do your market intelligence. Again, we won't plumb all five of these, but I do think, to the last point I made on the previous slide, testing as a percent of the target population is incredibly important from an external point of view as well as the rate of new implied infections that that testing reveals to you.

From an internal planning perspective, I think staffing and supply levels are going to be very important to keep track of. Calibrating the the right level and mix of staffing, particularly in the inpatient setting is going to be particularly tricky as we move into the post initial surge era. The clinicians right now are quite tired, quite burned out, and will probably be due for a break. That means that you need to be fairly dynamic in the way you allocate staff across the different service lines that you choose to reopen initially.

As a corollary to that, the supply levels. Making sure that you have enough pharmaceuticals and drugs, as well as PPE, to arm those clinicians with as they start to take on some of this pent-up postpone demand, will be quite important.

Managing and modeling the financial projections three to six months out is going to be an enormous challenge. We recognize that, and we're happy to provide further guidance in further podcasts and further blasts out for you. Just let us know how we can be helpful there.

Just to close on a few things to keep in mind as we prepare for this gradual sequenced reentry into the market. The first thing that we would recommend is make sure that you do take an external view initially - model and assess where the market is in its recovery. It really does matter a great deal how far down the curve counties and states are in the demand of that initial surge throughout the healthcare system. The farther down you are on that curve, the more likely you will be able to open more broadly to the community, and the more likely you are to be able to handle sudden surges in demand.

The second thing to keep in mind is making sure that you prioritize the clinical need and the clinical capabilities that you bring to bear. And we say, down there on the third bullet for that consideration, set of cadence of services that really starts with the emergent and urgent procedures that have been postponed as a result of the initial search, moving forward to the elective, planned surgeries that you would have otherwise done and leaving cosmetic and secondary surge capacity to the end.

The third is maybe the most important consideration is that you don't want to go first and you don't want to go alone. If you're already going first, don't do it by yourselves. It's incredibly important as we have seen, in those markets that have met this challenge, to collaborate with your delivery chain partners, ensuring that the patients that you do treat will have referral destinations to go to after they leave the hospital or after they leave the clinic. We have seen in some markets, skilled nursing facilities simply unable to accommodate COVID patients, and that is due, in part, to a shortfall in supply of PPE to those sites of care. But it's also due to the fact that that most partners don't have great deal of visibility into what their implicit partnerships might be able to handle going forward. If you do handle a great deal of Medicare, acute and chronic patients, that post-acute care segment of the delivery chain is incredibly important to partner with.

We would also say to not discount the public health partners and the public health agencies in your market as a key partner going forward, not just as a source of data, but as somebody who can serve as a traffic cop in making sure that there's load balancing happening across these markets - not just as we go live with the reopening of some of our "normal businesses," but also as we gear up to handle secondary surgeries and hotspots.

And that leads into the fourth point, which is that public health, as always, is part of the job of any health care executive, whether they be a hospital or a large physician practice. More so than ever now, the responsibility of our health care providers to manage to the public health objectives of the state and County is imperative. Failure to do that will allow surges to erupt in certain markets and will allow patients to fall through gaps that are left in at point of care.

And then finally, I think we are going to need a new financial model for the enterprise. We mentioned telehealth earlier. Telehealth represents a terrific opportunity for some physician practices to improve throughput of the patients that they see. It may not necessarily represent a terrific impact of productivity, if you are measuring to RVUs, so that is going to need to be modeled out going forward. The other thing to note is that in an inpatient capacity, in addition to an annual flu season, that we're likely to see an annual coronavirus season, and that will require even stricter measures on the inpatient setting to sequester those patients off from other folks who may be incredibly susceptible to further infection. And that will take capacity offline at regular intervals or semi-regular intervals during the course of the year, that will impact our ability to manage both revenue and variable costs.

All five of these, I think, can be drilled down to a much greater nuance than we have time for here today. Hopefully this is helpful in your understanding of how the markets are evolving and what you might need to think about as you plan to reenter and deal with a different health care landscape.

If you have any questions or you need any advice or any thought partners on this, we're always happy and willing to play that part for you. If you have any questions for me in particular, my name again is Erik Johnson and you can reach me at erik.n.johnson@optum.com. Thanks very much for your attention today. We look forward to being in touch.