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 Big 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.
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.
It worked: telehealth use “skyrocketed.” Industry leaders TelaDoc and Livongo merged, while rival Amwell got a $100 million investment from Google. No one is quite sure how much of the flexibilities introduced during the pandemic will persist once it recedes, but no one wants to miss out on what McKinsey predicts could be a $250b opportunity. “The window to act is now,” the report declares.
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.
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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