STRATEGIC PLANNING

Post-COVID Strategic Planning: Identifying Trends That Matter
It’s been nearly three years since the first COVID-19 cases were reported in the United States, and the pandemic continues to make its mark on health care. At the SHSMD Connections conference in National Harbor, Md., in September, leading experts discussed how the past two years of health care data have been altered by the pandemic, and how strategic planners can still leverage valuable insight from their data to prepare for the future. They say the key is separating the signals from the noise. 

Overall, hospital inpatient volume still has not recovered from the massive hit it sustained at the onset of the pandemic, according to Lee Ann Lambdin, senior vice president for healthcare strategy with Stratasan, a division of Syntellis Performance Solutions. Citing data from two highly populous states as examples, in Florida and Texas inpatient discharges (excluding COVID-19) were down between 11% and 14% in the fourth quarter of 2021, compared with the same period in 2019, she notes. 

Even with COVID-19, inpatient discharges were down 2% to 3% over the same period, she adds.  

Similarly, emergency department visits have dropped significantly and have yet to recover. Using Florida and Texas as examples again, Ms. Lambdin reports that emergency department volume was down 13% to 17% (excluding COVID-19 visits) in the fourth quarter of 2021, compared with the same period in 2019. With COVID-19, emergency department volume was still down up to 13%, she adds. 

“The outpatient trend that had already been occurring over the previous few years was really accelerated during COVID,” she explains. “We are seeing a real shift not just away from [hospital] inpatient, but a trend toward urgent care and ambulatory surgery centers [ASCs] and away from hospital outpatient, as well as a growth in telehealth.”  

Nationally, between the fourth quarter of 2019 and fourth quarter of 2021, telehealth use increased by 3,249%, while urgent care visits rose by 72% and ASC traffic spiked by 9%, according to Stratasan data. Meanwhile, overall hospital emergency department volume dropped by 21% and inpatient traffic declined by 2.7%, while hospital outpatient visits increased by a scant 1.7%, Ms. Lambdin notes.  

“That 72% increase in urgent care is huge and has stayed fairly high post-COVID,” she adds. “People just got used to the ease and convenience of that site of care.” 

When analyzing your own institutional trends, Ms. Lambdin advises, “Don’t just look at overall volume. Look at what went up, what went down and your profit margins. Also look at any state market share data that you have. Make sure you’re pulling data by ICD-10 codes, because that is the only way to make sure you have COVID diagnosis information.” 

Nationwide data paints a picture of a continual shift to outpatient sites of care, Ms. Lambdin told SHSMD Spectrum, a shift that experienced a major kick-start when the Centers for Medicare & Medicaid Services took knee and hip replacements off its list of inpatient-only procedures in 2018 and 2020, respectively. Nationwide, according to Stratasan data, knee replacements shifted from 95% inpatient in 2018 to 25% inpatient, 39% hospital outpatient and 23% ASC by the end of 2021. Hip replacements went from 97% inpatient in 2019 to 37% inpatient, 40% hospital outpatient and 21% ASC over the same period.  

“I’m not sure where that stops. If hips and knees are outpatient, are hospitals just going to become big ICUs, with open-heart and other very high-acuity cases with multiple organ involvement?” she asks. “That’s why hospitals need to make sure that they have ASCs and urgent care centers integrated into their services; if you want to provide care to the whole person throughout their life, you’re going to need more than a hospital.” 

Two case studies from Arizona and Georgia illustrate how these trends are affecting specific hospital systems. HonorHealth, a six-hospital system in the greater Phoenix–Scottsdale metropolitan area, identified three major shifts in its market as a result of the pandemic, according to Matt Sainsbury, network director for strategic planning: 

• An accelerated shift of cases to the outpatient and ASC space. “COVID-19 helped to move these procedures to these settings faster than we had projected,” Mr. Sainsbury notes. Overall, HonorHealth’s ASC volume increased by 24.7% and hospital outpatient volume by 3.1% between 2019 and 2021. “Our biggest rise in ambulatory surgical claims was by far in orthopedics,” Mr. Sainsbury says. “We also saw a 36.4% decline in inpatient orthopedic revenue between 2019 and 2021, but we were fortunate that we had ambulatory surgical centers and continued to grow in that space, with a 33% increase in ASC surgical volumes between 2019 and 2021.” 
• A change in physician alignment models from independent community physicians to a tighter employment model. HonorHealth went from roughly 60 employed specialty physicians in 2018 to approximately 280 today. “Physicians want the protection health systems could provide,” Mr. Sainsbury notes. “And in a very competitive market, if we don’t align with these physicians, our competitors will. We also developed partnerships with other organizations; for example, our HonorHealth/Arizona Comprehensive Cancer Center network has grown to become the highest volume cancer network in the state.”  
• Telemedicine trends, both upward and downward. “Our ability to do telemedicine was essentially there before the pandemic, but never actually done—basically, a big fat zero until March 2020,” Mr. Sainsbury notes. “Then during the height of the pandemic, we had upwards of 27,000 telemedicine visits per month. We have continued to invest in infrastructure for telemedicine, but over time it has not sustained the volumes we anticipated and is now at about 4,000 visits a month. It’s important to sift down to specific service lines and places where telemedicine access is important, such as behavioral health and primary care.” 

Tanner Health System, a five-hospital system serving eastern Alabama and western Georgia, is seeking to recover and rebuild from the pandemic partly by strengthening its oncology service line. Tanner Cancer Care provides care for approximately 700 new cancer cases annually, and about 350 of those receive radiation services. Although data from 2021 are difficult to interpret due to lagging COVID-19 data, Tanner holds the second largest market share in its service area for radiation oncology; although its primary competitor is trending downward, two other systems are trending upward and represent competitive threats. 

“Our program has a lot of strengths: technically advanced treatment modalities, two rock star radiation oncologists and the ‘Tanner cancer care promise:’ three days from diagnosis to treatment,” says Kelly Meigs, vice president of marketing strategy and planning at Tanner Health. “But our outdated radiation center, along with an end-of-life linear accelerator with increasing machine downtime and maintenance costs, represent a challenge to growing our oncology services in the community. The building itself is a patient dissatisfier and sets us apart from our competitors.” 

Tanner developed the case for building a new radiation center to fuel growth in its oncology service line, beginning with population growth projections in the community. “We found that all of the ZIP codes we serve have anticipated population growth between 2021 and 2026,” Ms. Meigs says. “We also calculated that over 85,000 people in our service area missed breast, lung, colorectal and prostate cancer screenings during the height of the pandemic. Even so, for the most part, our cancer treatment services volume held steady during the pandemic except for a small dip in the second quarter of 2020, and even rose toward the end.” 

Based on that data, Meigs’ team projected an 85% growth in radiation oncology services over the next 10 years. “Our facility return on investment is based on volumes staying stagnant for the next three years,” she notes. “We predicted that revenue from those three years will pay for the center.” 

Based on these projections, Tanner broke ground on its new radiation center in September 2022 and expects that it will be completed by early to mid-2024. “Not only will the new building be a competitive draw for patients, it will also enable us to treat more patients due to the faster linear accelerator,” Ms. Meigs notes. “We have also added a new cardiothoracic surgeon to our faculty, who will be focused on open-heart surgery to start, but by the time the cancer center opens he will also be offering lung cancer surgery. That allows our lung cancer patients to have both surgery and treatment at Tanner.” 

She advised other institutions to use all the data sources at their disposal to get a dynamic, multifaceted look at the market. “That includes claims data, EHR [electronic health record] data, demographic metrics, propensity models and financial models, market share, and state data. Understand your unique value proposition in the market,” she said. “As long as you know what service lines are most impacted by COVID—general medicine, emergency department and urgent care—you can better plan for what to expect in non-COVID times.” 

You can watch the full session from the SHSMD Connections conference here.