With their bottom line under stress, medical providers reposition themselves, with the Kansas City region’s reputation for quality care hanging in the balance.
Think about this number for a moment: $323 billion.
That’s what the American Hospital Association projects will be the financial toll imposed by COVID-19 on medical centers and health systems in the U.S. by the end of this year. Nearly $1 billion a day.
That figure represents a stew of factors, from revenues lost as health systems cleared their profitable elective-surgery calendars in the spring, then were hit with increased costs for staff personalprotective equipment, higher caseloads of uncompensated care, longer high-cost treatments of patients in intensive care, and disruption of their supply chains, among others.
The pain is universal but, hospital executives say, strong financial positions heading into the crisis have helped alleviate some of it.
“Earlier this year, we were forecasting one of our strongest fiscal years since we became a public authority in 1998,” says Bob Page, CEO for the University of Kansas Health System, which operates the region’s largest medical center. “Then the novel coronavirus pandemic hit. We postponed thousands of elective procedures, surgeries and clinic appointments while we focused on acquiring additional personal protective equipment (PPE) and updating our protocols to ensure we could always provide the safest care. Because of those cancellations, for the first time in our history we lost money for two consecutive months. However, we still managed to finish our fiscal year in the black.”
When the pandemic hit, Page says, the system did not furlough or lay off staff. “We knew our teams would need to be ready to go when it was safe to bring more patients into our facilities,” he says. “Today, our operating rooms are busy, our clinics are extending their hours to accommodate patients, and we are moving full speed ahead—always providing the very best care in the safest way possible.”
Hospitals across the country have faced similar situations, Page says. “Many are focused on recovering some of their losses or simply surviving. We are taking a different approach. We are learning from the experience of the pandemic and finding opportunities to care for even more patients.”
Olathe Health was likewise well-positioned pre-COVID, with strong financial reserves, says CEO Stan Holm. “Although the reserve funds fluctuated with market conditions, our position was strong, allowing us to sustain during this unprecedented time,” he said.
Nonetheless, Holm said, the system suspended elective procedures and many outpatient visits in March to help contain the spread of the virus, so “the impact on our patient-care activity and resulting financial situation has been significant. For example, compared to last year, we have experienced decreases of 63 percent of surgeries, 39 percent of emergency visits, and hospital admissions/observations are down 41 percent. You have to respond to that change with cost-savings measures.”
That included a reduction in total compensation for the board and executive team, eliminating several capital projects and initiating a hiring freeze.
“We also did something very uni-que—a Voluntary Retirement Program,” Holm said. “A lot of companies were looking at doing furloughs where their associates would be out of work for an extended length of time, and due to market uncertainty, they might not be asked back at all. We wanted to provide a more long-term solution that would both benefit our associates and also set our organization up in a better place financially for what the future might hold. The VRP provided enhanced severance and health benefits for associates who chose to take advantage of this option.”
Sam Huenergardt, chief executive for AdventHealth Shawnee Mission, cited action by Congress a as a key to helping hospitals weather the crisis.
“Funding from the CARES Act has been crucial as we’ve dealt with increased supply cost and lost revenue due to cancelling electives and consumer fear of returning to health systems,” Huenergardt said. “Members of the public may think this has entirely made up for the shortfalls, but in reality, we are still significantly below where we would normally be at this point in the year and that is difficult to overcome as we continue to see more COVID patients being admitted.”
The efforts to shore up organizational financials are producing changes in delivery that will be long-lasting, hospital executives say.
“Absolutely. Just like many organizations, the way we handle even incident command for any disaster or catastrophic event will be different, based on what we learned during this pandemic,” Holm said. “I have been a part of incident-command situations in the past, but when you are in it for so many months, it makes you look at things in a different way.
“For example, we constantly assessed and reassessed our needs in the four big-bucket areas of staffing, supplies, space and standard of care. The plans and actions we took from those assessments are now part of our incident command playbook for the future.”
Robert Kenagy, chief executive at Topeka-based Stormont Vail Health, says hospitals quickly embraced innovation, and his was no exception. “We found new ways to safely serve our patients thro-ugh electronic visits while implementing changes to our practices and facilities to ensure a safe environment to deliver our elective services,” he says.
As a result, “throughout the pandemic, we have delivered urgent and emergent service without interruption. By maintaining our focus on safety and supporting each in novel ways, we have maintained our patients’ trust and confidence and been able to resume to pre-COVID volumes of services.”
Page says increased use of telemedicine is a perfect example of enduring change. “Before the pandemic, we used telemedicine for approximately 1,000 patient appointments every year,” he said. “In March, our team worked tirelessly to convert thousands of in-person clinic visits to telemedicine appointments. By early August, we will have completed more than 100,000 telemedicine patient visits—something we never could have predicted a few months ago.”
And rather than focusing that delivery model almost exclusively on existing patients, Page says, “today we are also focused on using this technology to connect patients across the region with our specialty care. Since March, we have added new patients not only across Kansas and Missouri, but also in Nebraska, Oklahoma, and beyond—and we are just getting started.”
Overall, these executives say, the need to become leaner and meaner will ultimately enhance the regional reputation for delivery of high-quality care. “Yes, our reputation for excellent health care has only been strengthened throughout the pandemic,” says Huenergardt, whose system was the first in this market to treat COVID patients with convalescent plasma.
That, he says, is something many local hospitals are now doing in conjunction with Mayo Clinic and the Community Blood Center. “Health care providers across the metro have collaborated since the onset of the pandemic, and working together has strengthened our ability to educate our elected officials and communities as we fight this common enemy of COVID-19,” he says.
The region’s position, says Holm, “has actually gotten stronger. The health systems in Kansas City have always put patient safety and outcomes at the top of their priority lists, and during these unique times, safety is still first. “We have many great health-care options in the Kansas City metro area. Some very unprecedented things have occurred in our organizations during this health crisis. In the first week of the pandemic hitting our communities, the CEOs of all the major health systems were texting each other. With the many changes happening, we all wanted to stay on the forefront of what that might mean for our cities and communities. We soon realized we needed a more formal way to stay in communication on a regular basis, as we were all in very similar situations.”
A collaboration with the Kansas City Metropolitan Healthcare Council led to weekly meetings with all CEOs, the Kansas Hospital Association and Missouri Hospital Association. “We also then held weekly meetings for all area Chief Medical Officers, Chief Human Resource Officers and Supply Chain Executives,” Holm said. “What’s special is the focus on safety and patient outcomes stayed at the forefront of all our discussions, and I know those relationships will stay strong and keep us connected in the future.”