As a health care manager, you must be able to analyze financial and economic issues in the health care industry. In this summative assessment, you will demonstrate problem-solving skills.
ScenarioImagine you are a health care manager at a hospital and you are preparing a report for your CFO in which you analyze current issues in health care (e.g., nursing shortages, supply-chain disruption, and telehealth use) and address the financial impact of these issues on your hospital. PreparationSelect 1 of the following current financial issues that the health care industry faces today to use for this summative assessment: nursing shortages, supply-chain disruption, or telehealth use.Access the
Week 2 University Library
and read 1 of the following articles from the Summative Assessment: Problem-Solving Analysis Report section that corresponds to the current financial issue you selected:
Nursing shortage: “As COVID-19 Worsens Nursing Shortage, Madison Hospitals, Schools Step Up”
Supply-chain disruption: “Inflation Rattles Hospital Supply Chain and Labor Pool with no End in Sight”
Telehealth use: “Telehealth Grows, but Medicare Has Woes”
Assessment DeliverableWrite a 700- to 1,050-word report about the financial issue you selected in which you:
Analyze the financial impact of your selected financial issue on the health care industry.
Explain what the supply and demand challenges are for health care services in terms of personnel, supplies, or technology.
Describe how regulatory issues are affecting, or will affect, the health care industry in the areas of personnel, supplies, and technology.
Describe at least 1 strategy to improve the selected financial issue.
Discuss what you believe would be the outcome of these recommendations, if implemented.
Industry Analysis
2022 CRYSTAL BALL
Telehealth grows, but
Medicare has woes
Cost pressures may increase as the Medicare Hospital
Insurance Trust Fund runs low, but the reliance on telehealth
that the pandemic wrought is likely to continue, especially for
mental health services by JOS E PH B U R N S
I
n the first half of 2020, the
coronavirus forced the
healthcare system to transform
itself in dramatic ways that
continue today. Those changes
are likely to remain in place
throughout the early part of
2022, if not through the entire
year and beyond.
In interviews with Managed
Healthcare Executive®, executives
and experts predicted that the
American healthcare system will
continue to add more telehealth to
the delivery system, particularly for
those needing mental health and
substance abuse treatment. At the
end of 2021, this form of care delivery was becoming so popular that
insurers were offering telehealth as
a virtual-first product.
In addition, experts predicted,
the healthcare system will continue
to focus on the never-ending battle
to rein in costs.
Rising pressure
for cost control
This year and next, two forces
will come into play and increase
the focus on the need to control
healthcare costs, predicts David Muhlestein, Ph.D., J.D., chief
strategy and chief research officer
for the consulting firm Leavitt
24
®
Partners. One is the perilous state
of the Medicare trust fund, which
will be exhausted unless Congress
changes how the program is paid
for, the amounts paid, or some
combination of the two, according
to Muhlestein. The other is healthcare cost pressures on health plans
and employers as the nation moves
out of the acute phase of coping
with the COVID-19 pandemic to
what seems likely to be an endemic
respiratory disease. “In 2022, cost
pressures will start to come back,”
Muhlestein says.
The estimates vary. Medicare’s
Hospital Insurance Trust Fund is
projected to be exhausted in about
three to six years, Muhlestein notes:
“No one is certain about when it
will happen, but it’s definitely on
the horizon.”
Given that the Medicare program covered about $830 billion in
healthcare costs in 2020, roughly
one-quarter of total U.S. healthcare
expenditures, the financial health
of the trust fund should be one of
the most pressing topics for discussion in Washington. But politics
and the midterm elections this year
will likely postpone any such serious consideration of the problem
till late this year or early next year,
according to Muhlestein. “There
MANAGED HEALTHCARE EXECUTIVE ❚ JANUARY 2022
MHE0122_024-031_Industry Analysis.indd 24
has to be a conversation around
how to address the Medicare trust
fund,” he says, “but my guess is that
the election will distract Congress
for the next year or so.”
Muhlestein sees an “or else”
scenario for Medicare: substantive
changes in the program or else
some drastic cuts in payments.
“That would be incredibly disruptive for physicians, hospitals, health
plans and anyone who has Medicare or Medicare Advantage or is in
a managed Medicaid plan because
they would all be affected by those
changes,” he points out.
At about the same time, the
entire U.S. healthcare system may
be entering what Muhlestein sees
as a post-acute COVID-19 period.
Providers and payers will need to
adjust and perhaps manage costs
without the significant levels of
funding that the federal government has invested in shoring up
the health system during the height
of the pandemic. Another factor
may be an uptick in the use of
healthcare services as people who
held back from getting care start
needing it, possibly when their
disease is at a more serious stage.
Healthcare providers will need
to be more flexible than they have
been in the past, Muhlestein pre-
Managed Healthcare Executive. com
12/21/21 10:34 AM
Telehealth grows, but Medicare has woes
Industry Analysis
HEALTH INSURERS OFFERING A “VIRTUAL-FIRST” OPTION
dicts. “For a long time, the health
system has been based on building
capacity around well-reimbursed
procedures,” he notes. Space and
resources were devoted to a single
purpose. Now and in the immediate
future they will need to be more
nimble, reallocating room and resources from one kind to another.
“The analogy I use is a hotel
ballroom, which can handle a big
conference all in one room or …
provide space for a luncheon or a
small wedding,” continues Muhlestein. “Whatever it is, the space
can be repurposed very quickly to
fit certain needs.” If there are just a
few cases of COVID-19 in a community, some rooms — indeed, whole
facilities — may not be needed.
But if serious cases spike, those
rooms or facilities, and the doctors
and other healthcare professionals
needed to staff them, could be put
to use quickly, he notes.
More virtual mental
health care
The toll the pandemic has taken
on people’s mental health has been
well documented. Isolation has increased. The stress of unemployment
has affected millions of workers who
were laid off. Now labor shortages
are affecting those who have stayed
in their jobs. Research findings have
shown that the prevalence of depression has increased. “The pandemic
has elevated mental health as an
area of focus for all stakeholders,
but particularly for employers and
all purchasers more generally,” says
Michael Thompson, president and
CEO of the National Alliance of
Healthcare Purchaser Coalitions.
Employers want to see changes,
such as greater integration of mental
health across the entire spectrum
of health care services, including
primary care, Thompson says.
Managed Healthcare Executive.com
MHE0122_024-031_Industry Analysis.indd 25
F
or many people, telehealth is
an inviting option. But some
insurers are offering health
plans that make it the main
way by which people receive
primary care.
In October 2020, Priority
Health, one of the largest health
insurers in Michigan, announced it
was offering a “virtual-first” option
to some members. Starting last
year, Priority Health members
who signed up for one of three
MyPriority Telehealth primary
care provider
(PCP) plans had
all primary care
visits conducted
virtually through its
provider partner, Doctor on
KINCAID
Demand, a group
of physicians and other providers
who deliver all care via telehealth.
Any member needing to see a
specialist in person would need
a referral from their PCP, Priority
Health said. The new plans were
designed for those who are comfortable with online interactions
with providers, says Carrie Kincaid,
Priority Health’s vice president of
individual markets.
Following Priority Health’s lead,
three other insurers announced
this year that they will offer virtualfirst plans in 2022. CVS-Aetna
announced in August 2021 that it
would partner with Teladoc Health
to offer a virtual plan to employers
nationwide. UnitedHealthcare
and Centene Corporation have
also jumped on the virtual-first
bandwagon. Centene said it
partnered with Teladoc Health to
provide virtual care in Michigan,
Mississippi, South Carolina and
Texas. UnitedHealthcare offered
its NavigateNOW virtual-first plans
in Dallas, Houston, Minneapolis, Indianapolis, Pittsburgh and
several other cities. Members who
choose the NavigateNOW get
around-the-clock access to care
and same-day appointments and
have no copayment for virtual and
in-person primary care. There is
also no copayment for behavioral
health visits and virtual urgent
care, the insurer said in a news
release. Employers’ premiums for
NavigateNOW plans are 15%
lower than comparable health
plans, UnitedHealthcare said in its
press release.
In November, SCAN Health
Plan, which offers Medicare
Advantage plans in California,
launched Welcome Health, an
independent primary care medical
group that will treat MA members
through a combination of virtual
and in-home visits.
In an interview with Managed
Healthcare Executive®, Kincaid
said that Priority Health introduced
three virtual-first plans on the individual market in Michigan. One is
a bronze plan, the other two, silver.
About 5,000 people signed up
for plans. Kincaid said that 60%
of members who responded to a
patient satisfaction survey rated
their satisfaction at 4.8 out of 5
stars. “When introducing these
plans, we were very focused on
wanting to improve the quality of
care that patients receive through
the accessibility of this product,”
she said. Priority Health has noted
that some of the patients enrolled
in virtual-first care are more engaged in their care than they were
previously, she added.
“Among members with diabetes we’ve noticed that they are
more engaged in their care and,
as a result, they’ve been able
to bring their A1C scores down
significantly,” Kincaid said. “Other
members have brought their
weight down.”
®
MANAGED HEALTHCARE EXECUTIVE ❚ JANUARY 2022
25
12/21/21 10:34 AM
Industry Analysis
Telehealth grows, but Medicare has woes
Net Medicare spend to almost double
Net Medicare spending is the government outlay minus revenue from premiums and other sources
$769
2020
$688
2021
$783
2022
2023
$845
2024
$861
$967
2025
$1,038
2026
$1,110
2027
$1,259
2028
$1,206
2029
$1,353
2030
$1,466
2031
All figures are billions of dollars.
Source: Congressional Budget Office, “The Budget and Economic Outlook: 2021 to 2031,” February 2021
26
®
ed last year, almost all (92%) of the
respondents said that access to care
for mental health conditions and
substance use disorders would be
a priority over the next two years.
Telehealth has become one of the
main sources for providing access.
“Telemedicine and tele-behavioral health care are here to stay,”
says Thompson. “You can’t put
that toothpaste back in the tube
because it’s more convenient and
safer than conventional face-toface counseling. Also, in many
ways, efficacy is higher, in part
because it integrates measurement
over the course of treatment into
the care process.” What’s more, he
continues, telehealth allowed more
mental health providers to deliver
care than ever before, a problem
MANAGED HEALTHCARE EXECUTIVE ❚ JANUARY 2022
MHE0122_024-031_Industry Analysis.indd 26
policymakers had struggled to
solve before the pandemic.
For health insurers, the pandemic has demonstrated the benefits of
providing care via telehealth. This
is shown by the rising number of
health insurers that have embraced
what they call virtual-first care, in
which physicians and other providers meet with patients first and
almost exclusively via telehealth.
Joseph Burns is an independent
journalist in Cape Cod, Massachusetts,
who writers about healthcare.
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SkyLine@Stock.Adobe.com
Physicians, hospitals and health
systems need to demonstrate with
data that they are
doing more to diagnose mental health
issues earlier and
to assess patients’
progress while in
treatment, he says.
THOMPSON
But Thompson
sees a bright spot in the pandemic: greater access to telehealth,
especially for mental and behavioral health services. In his view,
telehealth can help fill the void in
underserved areas. “For too long,” he
says, “employers and other purchasers have tolerated unequal access to
mental health services.”
In a survey of 142 employers that
Thompson’s organization conduct-
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Managed Healthcare Executive. com
12/21/21 10:34 AM
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