NorthShore University HealthSystem has seen a steady return of almost all services since June, and currently the health system is close to 100% of where it was before the coronavirus pandemic.
NorthShore is now charting a course forward, even with the expectation that it will realize a significant decline of about a quarter billion dollars this fiscal year.
But with colder weather settling in and the flu season beginning in earnest, the large, Chicago-based health system of five acute care hospitals and 150 outpatient locations has had to do what many hospitals are now doing – downshifting and reverting back to some of the measures it took in the midst of the initial COVID-19 pandemic.
“The last couple of weeks have shifted things,” said Chief Operating Officer Sean O’Grady. “We now have to scale back some of these things, because we have to free up beds for the high rates of [COVID-19] we’ve seen.”
As in many states in the U.S., the number of COVID-19 cases in Illinois is climbing.
“The next eight weeks will probably be significantly challenging, and then we’ll see a decline,” O’Grady said. “We want to ensure we get back to business as quickly as possible. It will impact our ability to meet budget projections, but we feel comfortable.”
At the beginning of the COVID-19 pandemic, NorthShore weathered a financially dire period from the middle of March to the end of May, according to Chief Operating Officer Sean O’Grady. The system saw a significant recovery in June, July, August and September, but corporate revenue was down 10% as of September.
“We entered 2020 with strong financials, so it was never a question of whether we could survive, but really making sure we adapted,” O’Grady said. “We didn’t want to realize any long-term harm to the organization.”
There were a few different components to NorthShore’s financial mitigation strategy, which began back in March. For one, even though the system canceled a good portion of its clinical portfolios, it kept staff salaries whole for the first several months, because leadership didn’t know where and when people would be needed.
Over time, the system rolled out workforce strategies as it adapted to the decline in revenue. Even though it had to institute some difficult temporary measures, such as pay cuts and furloughs, there were no involuntary layoffs. Some clinicians decided to use the opportunity to sunset their careers, which helped substantially. Through targeted labor strategies, NorthShore was able to right-size its workforce.
It’s a strategy that has also worked for RWJBarnabas in New Jersey, according to CEO Barry Ostrowsky, and for Faith Regional Health System in Nebraska, according to CFO and VP of finance Johnathan Wilker. Having a stable balance sheet to begin with also helped all three systems.
“We had the flexibility to take the long view,” O’Grady said. “Without our strong balance sheet we wouldn’t have had the opportunity to do that.”
Critically, NorthShore’s integrated approach to governance has paid dividends during the pandemic. Rather than operating as a loose conglomeration of hospitals, O’Grady views the system as a single hospital with five locations, functioning cohesively and basing success on system-wide performance, as opposed to the individual performance of each entity.
When a decision is made at the top, it trickles down to the hospitals in a uniform fashion. One hospital’s success is the success of all; one’s failure is the failure of all. The individual constituents sink or swim together.
All of the decisions NorthShore has made during the pandemic have been informed by data, and indeed it’s been the system’s efforts at digital transformation that have truly greased the wheels.
Recently, the health system achieved a rare designation from the HIMSS Analytics Adoption Model for Analytics Maturity, or AMAM, which incorporates methodology and algorithms to automatically score hospitals around the world relative to their analytics capabilities. (HIMSS is the parent company of Healthcare Finance News.)
Parsed into eight stages from 0 to 7, the model is designed to measure and advance an organization’s analytics capabilities. NorthShore was recently given the Stage 7 designation for AMAM, which means the organization has not only established strong analytics capabilities, but is also demonstrating that it’s using the technology in a useful and meaningful way.
Stage 7 represents the apex of leveraging data-driven platforms, such as the Clinical Analytics Prediction Engine and the Electronic Cardiac Arrest Risk Triage, to provide better care and operational performance.
Also, HIMSS revalidated NorthShore’s Stage 7 status on the EMR Adoption Model and Outpatient EMR Adoption Model. Both models are used to improve patient care, while reducing costs in case studies on predicting medical spend – and also developing an inpatient antibiotic stewardship assistance program using real-time EHR data. NorthShore is one of only five organizations worldwide that has achieved Stage 7 status on these three maturity models.
“It’s really about a corporate-wide organizational culture about using data to make decisions,” said Chad Konchak, assistant vice president of health information technology at NorthShore. “There’s a lot of gut-level decision-making, especially at the top, and all evidence suggests that isn’t as effective as data-driven decision-making processes.”
What’s unique about the analytics model, said Konchak, is that while there’s a technical component, he views that as taking a back seat to the governance aspects. Length of stay offers an example: Six years ago, there were four definitions of it at the health system, while now it’s set to a standard that everyone trusts and agrees to.
That’s not a technical issue, but rather speaks to how the data is used. The organization now has a better understanding of its weak points and has a methodological process for improving them.
Through this organic process, the team realized there’s significant value in extracting data.
“Our very first attempt at dipping our toes in predictive analytics was with MRSA, a bacterial infection people get in the hospital,” said Konchak. “We used to universally test everybody for MRSA, and it’s costly, because we don’t necessarily get reimbursed for that particular test, and there are a lot of false positives. Family can’t see them; it’s not a great thing. We said, ‘If we can identify those who are at highest risk of MRSA, reduce the number of tests we’re doing, but also still maintain and control it, it reduces the burden financially.'”
With analytics integrated into the EHR, NorthShore cut testing in half, but maintained a low infection rate. That alone saves the organization three quarters of a million dollars per year, and there are other practical financial benefits as well.
“The orthopedics group had the foresight to put up their own research dollars to fund positions in their team to add analytics,” said Konchak. “They found patterns where there was practice variation that wasn’t evidence-based around hip and knee replacements, which is one of the most common and profitable things we do.
“There’s a large commercial payer base for it. The problem is, a lot of surgeons have their own preferred set of materials and implants they would want to use for things like knee replacements. There was no real evidence-based justification for why a physician was using one set of materials versus another. We were able to standardize these things and work with the supply chain, and the savings were in the low seven figures yearly.”
As NorthShore moves toward risk-based systems, the ability to be successful in terms of outcomes and patient experience are critical metrics that require an analytics backbone. On top of that, the system can also predict medical spend within risk-based contracts. Since it’s difficult for a health system to know whether it will have to write a large check to a payer or will receive a large check, the ability to make these predictions have significant financial implications.
“Analytics are a strategic advantage,” said Konchak. “In a large multibillion dollar corporation, data is just as valuable as an asset. To access and leverage that data, it really is a strategic differentiator. I think NorthShore got that really early on.”
Physicians are also feeling the benefits of analytics technology. Many spend two to three hours per night just reading charts. That can be a contributor to physician burnout, which for years has been a persistent problem in healthcare. One of the things the analytics team is doing is advancing natural language processing, which reduces workload by helping to automate and triage all of the messages physicians are receiving from patients.
It reduces the amount of clicks and, in one example, allows clinicians to identify the right antibiotics to prescribe in a more efficient way. The technology isn’t making decisions for them, but is rather making their decisions more informed. In that way, Konchak said, a more apt term would be “augmented intelligence.”
These digital approaches were put to the test at the beginning of the COVID-19 pandemic.
“I remember being in a meeting that totally got derailed when we got our first COVID patient on March 12,” said Konchak. “Within a few days we had dashboards up that told us what our daily census was for COVID … to understand from a mapping perspective where in our communities we saw these patterns emerging. We sent people out to make sure people were masking. We developed predictive models to determine where we would be in the next week.”
Buy-in from the top was what made it all possible, he said.
When canceled elective procedures strained health systems around the country, there was little margin of error for financial survival. In July, American Hospital Association president and CEO Rick Pollack, pulling from Kaufman Hall data, said the cancellation of elective surgeries was among the factors contributing to a likely industry-wide loss of $120 billion from July to December alone. Half of the nation’s hospitals are expected to be in the red by the end of the year.
On top of cancelled elective procedures, advanced federal loans will soon need to be repaid.
Robust analytics will be a permanent part of how NorthShore does business. As for how long the other coronavirus-related financial strategies last, that depends on the duration of the pandemic. The system has the ability to turn one of its hospitals into a dedicated COVID-19 hospital, which has proven to be highly effective from a safety efficiency and outcomes perspective.
“That specialized model has served us really well, and we will undoubtedly advance that after COVID recedes,” said O’Grady. “We’re also expanding the remote care platform. We’ll continue to enhance that. It’s very clear that that’s a venue that works well for some patients.”
And how. Remote care, which encompasses telehealth, is exploding in popularity, and health systems have leveraged relaxed reimbursement rules from the Centers for Medicare and Medicaid Services, which has allowed them to use telehealth as a stop-gap for some of the revenue lost during the pandemic.
In 2020, virtual care is expected to account for more than 20% of all medical visits in the U.S., which in turn is projected to drive $29 billion in total healthcare services. Those numbers were revealed this September in Doximity’s 2020 State of Telemedicine Report, which also found that up to $106 billion of current U.S. healthcare spend could be virtualized by 2023.
This highlights the high rates of adoption among both patients and physicians, and the impetus felt among providers to offer safe, secure and easy-to-use virtual services as demand for telehealth has continued to grow.
A number of healthcare providers have reported an increased demand for remote services during the second quarter of this year. HCA Healthcare, Community Health and Tenet Healthcare all reported upticks in telehealth usage, with 500,000 virtual visits, 230,000 visits and 190,000 visits, respectively, recorded during Q2.
In the early days of the pandemic, NorthShore emphasized virtual care, and patients were happy as a result, although once the health system gave patients a choice between virtual and in-person visits, most resumed showing up physically to appointments — perhaps speaking to the power of the patient-physician relationship. The numbers of patients seeking virtual care has been a roller coaster: up during virus surges and back down when the coast is relatively clear. O’Grady expects that will continue for some time, though the system will continue to offer remote care as an option for patients.
O’Grady said NorthShore has learned some valuable lessons during the public health emergency.
“Specialization is something that speaks loud and clear to our team members,” he said. “Those who practice medicine understand that the more you do something, the better you are at it, and that has served us well during COVID. When you leverage a belief that everyone has with a strategy, you get a lot of buy-in. That was critical for us.”
Second, it’s all about communication.
“We’ve learned a lot about directly communicating through messages and videos that aren’t filtered through multiple layers in the organization, and that has come in handy as we’ve made rapid changes under difficult circumstances,” he said. “We’ll continue to do that.”
Importantly, O’Grady said, these efforts are aided greatly by the efforts of frontline staff.
“None of this is possible,” he said, “without the heroic people who put themselves at risk every day to care for others.”
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