These are, no question, hard times, due to the COVID-19 pandemic. In the U.S., we’re closing in on 180,000 deaths in the U.S. Some 40 million workers lost their jobs, and over 30 million are still receiving unemployment benefits. Hundreds of thousands, if not millions, of small businesses are believed to have closed, and many big companies are declaring bankruptcy. Malls, retailers, and restaurants have been among the hardest hit.
Yes, these are hard times. But not for everyone.
Last week Target announced what CNBC called a “monster quarter.” Sales for online and stores open at least a
year jumped 24% for the quarter ending August 1 – peak COVID-19 days – and profits
were up an astonishing 80%. Its CEO
specifically referenced the pandemic, as shoppers sought safe and convenient
shopping options.
It is not just Target doing well. No one should be surprised that Amazon is doing
well, as more turn to online shopping and Amazon’s quick delivery, but The
Wall Street Journal reports
that Bog Box stores generally are doing well, including not just Target but
also Walmart, Home Depot, Lowe’s, Costco, and Best Buy. The efforts they were taking to compete with
Amazon, such as increased online sales and curbside pickup, served to help them
survive the pandemic’s effects.
Similarly, if you’re a streaming service like Netflix
or Disney+, the pandemic has been great for business. Video conferencing services like Zoom
are booming. Car dealers are
struggling, but not
online car sales.
And, of course, if you’re a cloud computing service
supporting all these shifts to online, the world has become even more dependent
on you. “Many
customers are scaling beyond their wildest projections,” Carrie Thorp of
Google Cloud told
WSJ.
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In healthcare, everyone seems to agree
that the big winner has been telehealth.
In the early days of the most severe lockdowns, everyone from CMS to
commercial health insurers to hospital systems reacted with unprecedented speed
to allow and encourage the use of telehealth – anything to keep people away
from doctors’ offices or hospitals, where they might catch or transmit
COVID-19.
Of course, the pharmaceutical companies
are doing fine in the pandemic. They’re the
cockroaches of healthcare; they’re always going to survive. Some are even getting the federal government
to directly pay for their vaccine
research or therapeutics.
Health insurers are also proving to be
big winners despite – or because of -- the pandemic. Due to all those delayed/avoided treatments,
they’re racking up huge
profits so far in 2020. Some of
those will have to be returned due to ACA medical loss ratio restrictions, some
of that may due to their having diversified (e.g., CVS/Aetna, Cigna/Express
Scripts, and United Healthcare’s Optum), and others may prove illusionary if long-term
impacts of having coronavirus prove widespread, but right now they are
doing well.
The big loser is employer sponsored
health insurance – or rather, the people who lost it. Kaiser Family Foundation estimates
that 27 million people lost their health coverage due to losing their jobs in
the pandemic. Some may qualify for Medicaid, others will buy
Marketplace plans, with or without subsidies, but millions will be
uninsured. Our reliance on employment
for health insurance has never seemed so short-sighted.
Another big loser may be primary care
practices, especially those not yet owned by health systems. Financial losses are
predicted to be staggering, as patients stayed away in droves. As late as July, nearly 90% of primary care
practices said they were still struggling due to COVID-19, according to a survey
done for the Primary Care Collaborative.
Clinicians reported that in-person visits were down, salaries were being
skipped, and many did not feel safe at the office.
Ann Greiner, president of PCC, said
the report “is a clarion call to move to a new
payment system that doesn’t rely on face-to-face visits and that is prospective
so practices can better manage patient care.” Farzad Mostaskari, MD, CEO of Aledade, agreed,
saying that the most important thing we should do to help primary care is: “Change
how we pay for care.”
Hospitals also took a big hit, with the
American Hospital Association predicting
that losses would top $300b in 2020 due to the pandemic’s impacts. Some of these losses will be offset by the various
federal bills (CARES and PPE), others by the rebound in the stock market, but some
hospitals will continue to struggle – especially the already
struggling rural hospitals. It doesn’t help that payments aren’t
necessarily related to the number of COVID-19 cases hospitals treat.
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During the pandemic, it has repeatedly struck
me as a particular indictment of our healthcare system is that a health crisis
causes so much disruption and so many financial losses. If a sick care system – which, let’s face it,
is what we have -- doesn’t do well when lots of people are sick, what are we
doing?
In April of this year, Microsoft CEO Satya Nadella talked
about the growth of its virtual platform Teams during the pandemic and
declared, “In this era of remote
everything, we have seen two years’ worth of digital transformation in two
months.” Healthcare has also made
some significant strides, but if all we take away from the pandemic is that
maybe we should keep doing more telehealth, we’ll have missed the opportunity
for real change.
Just as Amazon and the Big Box stores are proving that
the pandemic changes where people shop, how they shop, what they shop for, the
pandemic has important lessons for healthcare.
We shouldn’t rely on employment for health insurance. We shouldn’t rely so heavily on elective
procedures for health care revenues. We
need to be more flexible about where and how people get their care.
This pandemic will eventually pass, in some form and
with great damage. The healthcare system
will survive, at least most of it. The challenge
for us is to start making the changes needed for it to thrive even in the next
crisis.
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