Business Continuity in Healthcare

In mid-November, 2019, a 55-year-old Chinese citizen from Hubei province became the first known case of the COVID-19 virus. In the ensuing 7 months, a viral wildfire has inflicted untold suffering and death across the entire globe, with economic calamity following in its wake. Nations have imposed draconian infection control measures like quarantine, lockdown, social distancing, and masking. Retail stores, hospitality providers (hotels, restaurants, bars), sports and entertainment venues, travel and transportation services, and other customer-facing businesses have been devastated, causing wholesale layoffs and business closures.

As of today, the global number of confirmed COVID-19 cases stands at just over 12 million, with over 550,000 deaths. The U.S. has had more than 3.1 million cases and 133,000 deaths. New York has had the highest number of deaths (>32K), followed by New Jersey (>15K), and Massachusetts (>8K). Further down are California (>6K) and Texas (3K).

By April 1, 45 of 50 states had implemented statewide lockdown orders. Today, just 3 months later, a number of states have decided to lift or relax those measures. Well aware of the difficult tradeoff between health and economic survival, the federal government has published high-level phased clinical gating criteria on restarting the economy, allowing regional authorities to make the call. As a result, various governors and agencies have issued their own guidelines, leading to confusion and inconsistencies between cities, counties, and states.

Unfortunately, reopening—along with more social contact, recent protest gatherings, and increased testing—has produced a resurgence in new COVID-19 cases, causing some states to pause their recovery plans. Although seniors and those with underlying medical conditions had been considered at greatest risk, authorities are now seeing a concerning rise in the 18-to-35 age category, which may increase risk of spread to the elderly.

On July 7, the U.S. set a new single-day record of 60,021 cases, half of those in Arizona, California, Florida, and Texas. Even more worrisome, the CDC has estimated that for every confirmed case, there are likely 10 to 12 cases in the community that remain undiagnosed. From a public health perspective, the situation is getting worse.

A big part of the challenge is that much is still unknown about the virus. AIDS, Ebola, SARS, MERS, and H1N1 were also deadly, but became more manageable as we learned more. In the case of COVID-19, we are still in the discovery phase.

Nature of disease. COVID-19 seems to be a respiratory disease that can trigger multi-organ autoimmune and inflammatory disease, with both short-term damage and long-term sequelae. Treatment and rehabilitation of patients may require chronic medical care. The virus has shown several variants and mutations that complicate the analysis of disease impact.

Risk of reinfection. How strong is one’s immunity after recovering from COVID-19? Strong personal immunity reduces the risk of reinfection and contributes to herd immunity. The level of immunity also hints at whether a vaccine will be effective. In a hopeful development, a new study has found that initially alarming ‘reinfections’ discovered through retesting may simply be an artifact of persistent dead viral antigens rather than live infectious viruses.

Antiviral medications. Biopharma companies are racing furiously to develop an antiviral drug for COVID-19. One leading candidate is Gilead’s intravenous remdesivir, a nucleoside analog that fools the virus into incorporating it into the RNA assembly line, shutting down viral reproduction. Remdesivir seems to reduce deaths and shorten recovery from 15 to 11 days, according to an NIH study. Its optimal use may be in a combination drug cocktail. Early testing and treatment are required for remdesivir to be most effective, but its high cost will raise issues of access.

Vaccines. A similar race is taking place to produce an effective COVID-19 vaccine. Out of 120 vaccines under development, the federal government’s Operation Warp Speed has injected over $2B into the most likely candidates—including those from Pfizer, Johnson & Johnson, Merck, and AstraZeneca. Moderna, a small biotech, is in phase 2 trials after obtaining promising early results, with phase 3 trials possibly as early as this month. Oxford University has another promising candidate. The release schedule for a vaccine is unclear. As with other vaccines, an early COVID-19 vaccine could evolve into more advanced versions over time. Still, the consensus is that no vaccine will be released before 2021.

On the bright side, three considerations offer hope: (1) the virus has driven unprecedented global collaboration; (2) powerful new technologies are available, such as genetic engineering and machine learning; and (3) COVID-19 appears relatively simple, lacking the sophisticated defenses of viruses like HIV and influenza.

IMPACT ON HEALTHCARE

As the crisis hit, COVID-19 cases piled up rapidly. Hospitals and clinics experienced unparalleled demand for information, services, facilities, staffing and specialized expertise, public health tracking, and international collaboration. Even in countries with vaunted healthcare systems like Italy and the U.S., capacity was quickly exceeded due to shortages in equipment, space, supplies, and healthcare workers. The lack of reliable test kits hampered public health agencies from monitoring viral spread, leading to suboptimal reporting and risk identification.

Fortunately, lockdown, social distancing, and suspension of nonessential services have helped to blunt the impact of the pandemic. On the other hand, with the recent relaxation of lockdown rules, every healthcare system is preparing for a second wave (or intensified first wave) of COVID-19.

The novel coronavirus will leave a lasting impact on how healthcare is delivered in the future. One promising technology is automation, which uses software robots (bots) or digital workers to perform tedious, repetitive, error-prone tasks, freeing up expensive healthcare workers for more productive, valuable, perhaps even safer, activities.

Job losses. Layoffs across many industries will cause many former employees to drop health insurance coverage and perhaps not even apply for COBRA insurance. This may delay needed medical care, resulting in higher costs later. A fall in insurance enrollment will mean less revenue for healthcare providers and payers, although expenditures may also drop initially. As the economy recovers, health insurers may need to implement complicated processes to handle a flood of re-enrollment applications. Automation can help payers process such applications quickly and accurately.

Deferred procedures and visits. Hospitals suspended elective procedures to reserve capacity for COVID-19 patients, losing significant revenues. As a result, up to 100 hospitals will close in 2020. Many patients may now be unwilling to go into a medical facility due to the fear of exposure. Both pent-up demand and reluctance to come in will need to be managed, along with new visit procedures. Delays in needed care may have left some patients in worse shape, requiring more intensive, costly treatment.

Cost of COVID-19. Both providers and payers will incur substantial costs. The double whammy of increased expenditures and depressed revenues may continue over the next few years. A new AHA report estimated a loss of $202.6B for U.S. hospitals and healthcare systems from March through June 2020, or about $50B per month. The CARES Act and other federal relief programs cover COVID-related provider costs, but do not replace lost revenues.

A new study reported that California health insurers have already paid out $2.4B for COVID-19, about six times greater than the typical amount spent on seasonal influenza. Without a vaccine, the cost for California could eventually balloon to $25.1B before herd immunity is achieved. Depending on assumptions, the projected cost for U.S. health insurers is $139B to $558B over the next two years. Without federal intervention, insurance premiums are expected to increase by up to 40% in 2021, resulting in lower enrollment and less healthcare coverage in the midst of the crisis.

Telemedicine, telehealth, and telework. The pandemic has abruptly forced a new virtual care model upon healthcare consumers. Telemedicine has made more progress in the past 6 months than in the last 30 years—witness the suspension of interstate licensing barriers, relaxation of HIPAA rules, and reimbursement approvals by payers. As the medical community has become more familiar with telemedicine, CMS is now moving to make some of the changes permanent. The virtual care model is potentially safer for both patients and providers. With sophisticated new remote sensor technologies, remote care may even replace the majority of in-person patient visits. Physicians and nurses are at high risk, but even COVID-positive clinicians might be able to work remotely during their quarantine.

In other industries, companies have essentially been subjected against their will to a 10-week 100% telework proof of concept. Many have managed to survive—even thrive. The telework/telehealth model has been validated, raising questions about the need for office space and on-site visits. According to a recent CFO survey, half of companies plan to allow telework where possible, and 26% will reduce their real estate footprint—with implications for the commercial real estate market.

Contact center demand. COVID-19 has compelled contact centers to both virtualize and expand capacity to handle up to a 156% increase in initial call volume. On top of regular responsibilities, customer service agents (CSAs) must now add pandemic-related tasks such as accessing reliable epidemic information, coordination with emergency command centers, and collaboration with public health authorities, mutual aid organizations, and other stakeholders. Digital workers and intelligent chatbots have facilitated this expansion, producing cost savings and improving throughput, efficiency, accuracy, and patient satisfaction. Automation has also allowed CSAs more time to listen to and resolve caller concerns.

Lack of scalability. The crisis has highlighted the structural reasons why healthcare systems do not scale well. Many healthcare functions require human expertise and experience. However, healthcare employees also spend significant time on repetitive, manual tasks that could be better performed by automation. Transferring those tasks to bots increases scalability because bots are highly and easily scalable. Precious human resources can be reassigned to higher-value work, boosting scalability on the human side of the equation as well. Scalability also implies the ability to rapidly recruit and onboard new hires, accurately predict the mix of staffing needed by each department, and adjust staffing schedules to anticipate demand.

Supply chain disruption. With COVID-19, shortages in equipment, supplies, and facilities, inflexibility of opaque supply chains consolidated through group purchasing organization (GPO) contracts, and a huge demand upsurge all combined for the perfect storm. One lesson is that healthcare systems need greater visibility across the entire medical supply chain, similar to how pharmaceuticals are tracked to combat counterfeits and document shipping conditions. Given the heterogeneity of supplier and shipper data systems, automation could play a significant role in accessing multiple systems to monitor inventories and track the shipment of equipment and supplies in near-real time. The data could inform AI systems tasked to assess risk, predict shortages, and trigger backup supply chains in a timely manner.

Interoperability issues. The pandemic also directed attention to another long persistent issue in healthcare—the inability of disparate systems to share important data such as patient records, hospital inventory levels, availability of isolation beds, and staffing resources. This is both an internal and external problem. Coordinating care and health services across communities and regions is challenging when mutual aid organizations, public health agencies, and other stakeholders must work in the dark.

An information-sharing network is needed that does not take a lot of time and effort. As with the supply chain problem, one solution is intelligent bots that can access disparate systems to share reliable updates on epidemic status, capacity, inventories, and the latest guidelines (one example from China). Interoperability, data sharing, and analytics are the cornerstones of optimal management.

Cybersecurity and fraud. Adding hundreds or even thousands of new telemedicine and telework endpoints, many of them home-based setups, dramatically enlarges the digital attack surface. The new normal will require robust state-of-the-art security and strong governance, even as hackers are planning to exploit the new vulnerabilities. Automation can standardize strong security protocols, monitor for suspicious behavior, and remove the need for humans in the loop when processing or transferring sensitive data such as PHI.

The new popularity of telemedicine has also raised concerns about the increased potential for fraud. Compared to an in-person visit, it might be easier for bad actors to defraud payers and providers online—e.g., overcoding, identity theft, drug abuse, and ghost visits. However, intelligent bots could be deployed to test applications for weaknesses, enforce security protocols, monitor activities and remote sensors during an encounter, and analyze hundreds of virtual visits to identify suspicious behavior patterns. Bots can also ease telemedicine setups for physicians and patients, reducing manual configuration errors.

Mental health issues. Months of lockdown and relative social isolation, along with economic disruption and job loss, have exacted a heavy toll on the mental health of the population. Eighty percent of patients with mental health conditions in the UK have reported a worsening of their status due to inability to access mental health care. Suicides have increased slightly, though lives have been saved through lockdown. The invisible impact of COVID-19 has been felt by both young and old from all socioeconomic levels. In May, half of Americans reported symptoms of depression caused by self-isolation. In the 18 to 29 age range, 42% reported anxiety and 36% had depression, with the incidence dropping with age. Social isolation has exacerbated loneliness among the at-risk elderly who are prevented from interacting with caregivers and loved ones. Healthcare workers, in particular, have suffered stress, burnout, and depression due to working conditions and personal risk.

Uncertainty about the future. The recent relaxation of lockdown measures by some states has muddied the waters. Experts predict a second wave of COVID-19 in the fall of 2020, and perhaps another two waves in 2021, leaving cost estimates open-ended. Researchers continue to investigate the virus while we await the arrival of antiviral drugs and a vaccine. Guidelines for return to work, like lockdown rules, vary by state and locality.

The CDC has issued interim guidance for employers who want to resume operations. The fairly intrusive recommendations include daily health checks, hazard assessment of the workplace, face masks, social distancing in the workplace, and mitigating ventilation system issues. The boundary between personal privacy rights and the public good will be in focus.

For providers and payers, the expectation is that more employees will become teleworkers, which is safer and possibly more efficient. Despite lack of physical access to the office, automation can empower the remote worker by arming that worker with a suite of bot-enabled capabilities or superpowers.

STRATEGIC CONSIDERATIONS

The coronavirus pandemic has prompted healthcare organizations to accelerate plans for digital transformation. On the most basic level, digital transformation seeks to move companies from manual processes to digital, improving costs, speed, throughput, accuracy, and efficiency—in some cases, dramatically. A more strategic goal, however, is to rethink the organization’s business model from end to end, incorporating technologies like AI and automation to optimize efficiency, productivity, agility, scalability, and the deployment of human resources.

What are the components of a successful healthcare digital transformation strategy?

Agility and flexibility. Today’s healthcare environment is marked by change on many fronts—from operational challenges like COVID-19 to innovations in diagnostics, therapy, and technology to new regulation and revenue models. Unpredictability requires agility and flexibility. Amidst change, the entrepreneurial ability to identify new opportunities and pivot quickly is a competitive edge. The challenge is to build this capability into the company’s DNA.

Scalability. When unexpected challenges or opportunities present themselves, scalability helps an organization go into hyperdrive to meet the demand or take advantage of the opportunity. The extraordinary demand from COVID-19 exceeded the ability of many healthcare systems to expand capacity through slower traditional avenues. Automation can help. In certain scenarios, it is much easier to spin up and later retire digital workers than to hire, train, and discharge temporary contract workers.

Innovation. Extraordinary times call for extraordinary innovation. Competence in innovation has always been a market differentiator, but in a pandemic, the focus of innovation turns from new products to survival and sustainability in a new world. Care models, business operations, payment schemes, employee roles, and even consumer mindsets have all changed. For example, telemedicine has dramatically upended clinical visits. How can a healthcare provider improve a virtual patient experience? What represents value to today’s healthcare consumer? Will virtual care usher in a new doctor-patient relationship—perhaps partly automated in order to scale—where more frequent communication between provider and patient yields benefits in compliance, preventive care, and wellness?

Collaboration and partnerships. The world is getting smaller. As proven by COVID-19, near and distant events can threaten demand planning, supply chain, care models, and clinical outcomes. In a similar vein, contemporary research into the Social Determinants of Health (SDoH) recognizes the importance of environmental, socioeconomic, and other factors on healthcare outcomes. With greater connectivity on many levels, healthcare organizations will find it advantageous to exchange information and expertise, i.e., to partner, with suppliers, service providers, payers, customers, users, government agencies, and even competitors. Gaining visibility across stakeholders and geographies will produce more accurate insights into organizational performance, costs, risks, and opportunities.

Business intelligence (BI). BI is the process of gathering information internally and externally to help business leaders achieve cost savings, improve efficiency and productivity, identify risks, trends and opportunities, and craft a strategic roadmap for the future. In 2020, BI will become more customized, powered by AI. But AI thrives on data, and the historical challenge in healthcare has been a multiplicity of incompatible legacy data systems and silos that do not share data easily. Digital workers, however, can do the tedious work of extracting data from any human- or API-accessible system quickly, accurately, and frequently. They can populate an enterprise dashboard that illuminates every part of an organization—and beyond.

TACTICAL APPROACHES

Control costs and improve productivity. The most expensive part of a hospital budget is human labor. When expensive healthcare workers are asked to perform menial, rote tasks, both the hospital and its workers lose out. The most profitable companies automate tasks that can be better performed by computers, freeing up employees to engage in more productive, higher-value work that adds real value. Unless a company is in dire straits, automation simply for the sake of a reduction in force yields mediocre outcomes. Profitability suffers, and layoff survivors may be up to 20% less productive.

In addition, in times of uncertainty when waves of COVID-19 may cycle between lockdown and restarts, costs and revenue will also fluctuate. Companies must remain agile and adaptable to protect their cash reserves. One tactic, for example, would be to favor pay-for-use cloud computing and SaaS models over traditional capital investments in IT infrastructure and applications.

In other industries, budget uncertainty and the need to preserve capital has led to a preference by both customers and vendors for recurring revenue arrangements and even leasing, preferring OPEX over CAPEX. There have been both a new openness to controlling costs and a renewed, urgent interest in automation.

Develop new revenue streams. To survive, many businesses have adapted their business models to the evolving ‘new normal.’ Like startups, they have reinvented themselves to create new revenue streams. They have re-evaluated core competencies, virtualized customer-facing functions, instituted cash-forward payment models, and created new product fulfillment and delivery mechanisms.

Revenue loss has pushed healthcare into survival mode. Telemedicine might be a reasonable alternative revenue stream if reimbursement and regulatory exemptions become permanent and patients accept virtual care. If so, medical centers could extend telemedicine consultation services beyond their traditional catchment area to much broader geographies. They could also offer COVID-19 testing and contact tracing as fee-based services to the many employers dealing with return-to-work issues.

What other revenue streams are available to healthcare organizations? A 2019 study found 1,400 such examples that fell into three categories: selling care model innovations, transforming cost centers into profit centers, and earning royalties from drugs, devices, and diagnostics.

Licensing intellectual property such as care practice software or algorithms is one possibility. Another option is if a healthcare organization has an internal group that serves external customers. For instance, Bon Secours Mercy Health’s former subsidiary, Ensemble Health Partners, provided revenue cycle services to other healthcare organizations. In May 2019, Bon Secours Mercy sold a 51% stake in Ensemble to PE firm Golden Gate Capital for $1.2B in cash.

Address mental health issues. Both healthcare workers and patients may experience bouts of anxiety, loneliness, depression, and suicidal ideation. Lessons from past large-scale disaster scenarios have taught governments and healthcare systems that it is important to treat both the physical and psychological wounds inflicted by disasters. The underlying principles are early detection, preventive care, therapy, support, and a holistic view of health based on an integrated community approach.

Improve quality of care. One of the primary measures of the value delivered by a healthcare organization, quality of care is reported publicly using a variety of quality scores like AHRQ, HEDIS, and HCAHPS. It’s followed closely by healthcare consumers, payers, and employers. Given the likelihood of disruption, how can a healthcare organization maintain and improve care outcomes? Evidence-based quality protocols must be enforced and constantly monitored, which are normally resource-intensive.

Automation can significantly augment human resources by performing rote work, reducing human error and fatigue, ensuring practice consistency, improving predictability, reducing care delays, monitoring patient safety, and analyzing outcomes to discover opportunities for improvement. A recent Texas study showed that automation applied to medical records, doctors’ orders, and decision support can reduce deaths, complications, and costs.

Improve the patient experience. This is a top priority for many providers and payers. A great care experience increases patient or member loyalty and retention, improves compliance and outcomes, and adds to top-line revenue through favorable word-of-mouth recommendation.

COVID-19 has disrupted the patient experience with deferred elective procedures, the use of telemedicine, and the heightened role of the contact center. In the pandemic era, healthcare organizations need to understand new consumer expectations and priorities. Unsurprisingly, compared to past years, patients now place a higher priority on what healthcare providers do to contain the spread of infectious disease. The good news? One poll found that patient satisfaction with overall care quality has actually risen by 13% during the COVID-19 pandemic.

SUMMARY

COVID-19 has ignited a ‘big bang’ in healthcare. It is catalyzing fundamental digital transformation at a pace that has no modern precedent. As many healthcare organizations begin to re-evaluate their business models, they will need clarity on where they stand and where they want to go. Sustained effort, care, and patience will be needed to re-engineer this most complex of industries; much is at stake.

AI and automation will be critical pieces of the transformation roadmap. As enablers, they will allow organizations to redesign outdated end-to-end processes for the 21st century, while optimizing the roles and partnership of human and digital workers in innovative value chains. The journey isn’t easy, but it is absolutely necessary.

To find out more about automation in healthcare, please contact me or visit Automation Anywhere’s healthcare site.