Insights

How to Bring Patients Back to Children’s Hospitals and Drive Long-term Sustainability

James Cao, Manager, Children’s Hospitals Initiative, AVIA

More than 2,500 pediatric COVID-19 cases have been reported since the first case on March 2. So far, less than 2% of these patients have been admitted to the ICU; however, the recent multisystem inflammatory syndrome could unfortunately increase these ICU volumes. Meanwhile, children’s hospitals were unable to avoid the material financial risk resulting from COVID-19. Already operating with tight margins, they are facing profound financial challenges.

Children’s hospitals nationwide are seeing 70% fewer outpatient visits,1 60% – 80% fewer surgeries and OP procedures, and about 50% fewer admissions.2 These drastic declines in volume have led to revenue losses of up to 50% and cost increases of 10% or more, resulting in, on average, about $1 million in net loss per hospital per day during COVID-19.3

“Children’s hospitals have faced drastic declines in volume due to COVID-19, resulting in an average of ~$1M in net loss per hospital per day.”

The recent CARES Act funding has done little for these organizations, which care for the most vulnerable among us, train a large share of the nation’s future generations of pediatric providers, and lead the discovery and innovation of pediatric care. They are also often the sole source of information and support for many families in their large communities.

Bringing care back to children’s hospitals is essential for the health of their patients, their communities, and the financial sustainability of their hospitals. Digitally enabled strategies can help children’s hospitals address three unique challenges they face in this new normal: a cautious and fearful consumer base, limited short- and long-term revenue, and a deteriorating payer mix. Read on to learn more.

Parents Are Nervous About Returning to Care Settings

Parents are trying to keep their children safe and avoid clinical care settings at all costs. Although their concerns are valid, unintentional consequences include delayed or missed well-child visits crucial for catching developmental delays and administering critical vaccinations.

Solution: Children’s hospitals must consistently, frequently, and crisply communicate that facilities are opening ambulatory clinics and scheduling cases, while also establishing trust that it’s safe to be on-site. Consider the following digital capabilities to improve communication:

  • Digital Patient Communication to identify and reach patients due for a visit and notify them of reopening, as well as new safety protocols to prevent COVID-19 infections
  • Wayfinding and Navigation apps and mobile experiences so patients and families can safely self-navigate to and within the facility(ies), including designations of COVID-specific and non–COVID-areas
  • Contactless Patient Intake that includes e-registration, e-check-in for appointments, and virtual waiting rooms

Children’s Hospitals Are Facing an Imminent Financial Crisis

The postponing of non-urgent outpatient visits and elective surgeries by children’s hospitals meant a pause on over 60% of revenue-generating services,4 leading to one world-renowned children’s hospital losing $10 million in revenue per day. Meanwhile, operating expenses have increased due to factors such as COVID-19–related supplies, resources, and workforce needs.

Solution: Children’s hospitals’ financial sustainability depends on optimizing revenue and containing costs as organizations safely bring back care. The digital capabilities included below can enable children’s hospitals to impact key financial levers:

  • Digital Reimbursement—including prior authorization, denials management, financial clearance, coding, and clinical documentation—can help hospitals increase productivity and capture more revenue, while also reducing the overall cost associated with the administrative burden of these functions. Additionally, children’s hospitals can everage innovative approaches via machine learning and natural language to do work that was previously unimaginable.
  • Robotic Process Automation (RPA) to automate error-prone and time-consuming tasks, thus reducing errors, removing bottlenecks, and curtailing FTE bloat

Children’s Hospitals Must Re-envision Care to Address Shifts in Payer Mix

The COVID-19 pandemic has resulted in record unemployment numbers that will increase the mix of Medicaid, CHIP, and self-pay patients at children’s hospitals. Additionally, families who retain employer-sponsored insurance may have higher deductibles and co-pays and more limited network options (from which children’s hospitals are often excluded)—potentially decreasing demand for providers.

Solution: Providing efficient care is more important than ever as revenue has been severely limited while a majority of costs are fixed, and short-term variable costs have increased. Employing a few key digital capabilities can decrease children’s hospitals’ costs while enabling high-quality care and outcomes:

  • Remote Patient Monitoring to enable complex/chronic condition management, while improving provider efficiency and capacity
  • Care Plan Automation to increase patient and family engagement, empower patients and families with educational content, improve care plan and medication adherence, and automate routine tasks.

COVID-19 has impacted children’s hospitals in unforgiving ways that will have long-lasting effects. One positive emerging from this crisis is the accelerated adoption of digital technology, which is here to stay. The realization of the power of digital has profoundly changed how care is delivered and received.

There is no better time than now to develop your digital strategy to bring care back and prepare for the “new normal.”

Learn More About Digital Approaches to Address COVID-19

To learn more about activating a digital approach to drive financial sustainability for your children’s hospital during the COVID-19 rolling recovery and new normal, explore our COVID-19 Resource Hub on AVIA Connect. Sign up or log in to AVIA Connect for unlimited access to our latest resources and recommendations on COVID-19.

Sources:
1. Schencker L and Heinzmann D. Busy, yet struggling: Illinois hospitals lose $1.4 billion a month as coronavirus cancels surgeries. Chicago Tribune. April 17, 2020.
2. Wolfson BJ. The pandemic is hurting pediatric hospitals, too. Kaiser Health News. May 19, 2020.
3. Wietecha M. Children’s hospitals are losing $1 million a day. The CARES Act doesn’t begin to cover it. CNN Business Perspectives. May 7, 2020.
4. Curran J. IBIS World Industry Report: Children’s Specialty Hospitals in the US. February 2019.