The patient asked Dr. Shah how much treatment was going to cost, and he hit a wall. He had no idea what the cost of care was. As a resident, he and many others abide by the Hippocratic Oath to first, do no harm, and always keep the patient’s health and safety at the forefront. In training, he says physicians simply are not trained to think about the cost, or financial well-being, of their patients. This lack of knowledge “eroded [the patient’s] trust in me,” Dr. Shah said.
YALE NEW HAVEN HEALTH CFO EYES A REBOUND FROM COVID-19 PANDEMIC
Vincent Tammaro says the "days of people waiting in a waiting room are over."
Like most other hospitals and health systems, Yale New Haven Health (YNHH) has experienced widespread disruption to its business model due to the coronavirus disease 2019 (COVID-19) pandemic.
Vincent Tammaro, CFO of YNHH, tells HealthLeaders that his organization, the Connecticut-based nonprofit health system with more than 2,500 beds across six facilities, began to see its patient volume impacted by the pandemic during the second week of March.
For the month of March, YNHH experienced a 25% decline in patient volume, according to Tammaro, while the organization expects similar trends to continue through April and May.
CORONAVIRUS SURGE AND VOLUME IMPACT AT YNHH
- Yale New Haven Hospital prepared for 1,200 COVID-19 patients per day, the surge peaked at 480 patients per day.
- Greenwich Hospital prepared for 300 COVID-19 patients per day, the surge peaked at 130 patients per day.
- Current daily census of COVID-19 patients across YNHH facilities is 510, the surge peaked at 850 patients.
Despite the clinical challenges related to the outbreak, Tammaro says that the organization has remained on solid financial footing with reliable access to available capital.
YNHH also received $87 million from the Health Resources & Services Administration as part of the Provider Relief Fund created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Tammaro says that he expects another stimulus package from the federal government to address providers’ financial concerns as a result of canceling elective procedures for about two months.
However, he says that YNHH, like other organizations, is also preparing for changes to care delivery that could lead to financial challenges.
“When the patients come in, the cost of doing business is definitely going to increase. We have been exploring 24/7 [care], but that is expensive,” Tammaro says. “We need to space out more of these cases; the days of people waiting in a waiting room are over. But, again, that’s just going to contribute to the overall cost. Personal protective equipment and testing for our employees are all costs that we’re going to incur, as well as the testing and contact tracing for not only our employees, but also for our patients.”
BOTTOM LINE CHALLENGED, BUT STABLE
Unlike other provider organizations that were already dealing with a tight financial situation entering the crisis, Tammaro says the liquidity crunch was not a problem for YNHH, given the organization’s “tremendously solid balance sheet.” According to its most recently available financials, YNHH reported more than $4.6 billion in total revenue in 2018.
He adds that the organization has worked with bankers to address issues related to the ongoing outbreak while also preparing for a potential spike in patient cases in the fall.
Looking at the effect the pandemic will have on healthcare strategy, Tammaro says brick-and-mortar capital investments are likely “on the decline” as more organizations start to assess real estate capital investments going forward. He says the reexamination of healthcare real estate capital investments could present an opportunity for YNHH, as he notes that “liquidity is going to be at a premium.”
“Long-term, [with] the investments that we’ve made as the general public continues to get comfortable with coming back to healthcare organizations, I think we have an advantage that other freestanding organizations or freestanding ambulatory sites do not have,” Tammaro says.
Tammaro says that while he is optimistic about YNHH’s prospects to diversify its investment portfolio and adapt to a post-pandemic landscape, it may take some time for operations to normalize at the organization.
He says that YNHH is expecting a bump in patient volumes as the organization brings its elective procedures back; however, he says those metrics are unlikely to match pre-pandemic volumes. Tammaro partly attributes this to the emergence of telehealth services, noting that while YNHH has had a telehealth initiative in place for years, the organization never experienced adoption rates like it had over the past six-to-eight weeks.
Looking forward, Tammaro says YNHH is interested in how to use those virtual care options to handle the influx of patients seeking treatment, but also to address the incremental cost side as well.
“On the post-acute side, we’ve made some big investments in home care,” Tammaro says. “Obviously, we were doing those from a population health standpoint and making sure we were treating patients outside of the four walls of the hospital, which would be more cost effective. Between telehealth and the investments, we’ve already made on home care, I think we can continue to drive [care outside of the hospital] for patients, which is going to be of value.”
CLINICAL AND FINANCIAL DECLINES ACROSS THE INDUSTRY
HealthLeaders’ interview with Tammaro took place the same day that Strata Decision Technology released a report that estimated hospitals are losing $60 billion per month due to the pandemic.
The study, which was based off of 2 million patient visits and procedures, found that 55% fewer patients sought hospital care in March and April due to the coronavirus outbreak.
The analysis also indicated that the number of uninsured patients treated by health systems rose 114% over 90 days.
Several care service lines faced more significant estimated volume losses compared to this time last year. Ophthalmology led the way with a projected volume loss of 81%, followed by spine at 76%, gynecology at 75%, orthopedics at 74%, and eyes, nose, and throat at 72%.
Correction: An earlier version of this story stated that Yale New Haven Health received $55 million as part of the CARES Act. Tammaro stated that the organization received $87 million as part of the stimulus package. This article has been updated to reflect that.
Jack O’Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.