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How COVID-19 May Change America’s Health Care Industry

The COVID-19 pandemic has resulted in unprecedented impacts on struggling employers and employees across the U.S. A dramatic spike in unemployment has caused more than 44 million Americans to become newly uninsured, while millions of insured workers have been forced to delay noncritical treatments and utilize telemedicine. How could the current crisis permanently upend the U.S. health care industry?

This question was examined in a recent survey of prominent health policy experts conducted by the health industry website STAT, which anticipates a new “normal” for American health care in the decades to come. Among the study’s predictions, the pandemic could suspend the connection of health insurance to employment status, prompt policy discussions on why marginalized populations suffer disproportionately from most health conditions, and cause the closure of nursing homes and assisted living facilities.

Overall, STAT describes nine ways in which the coronavirus pandemic may permanently change health care delivery and policy:

1. Health care providers will make more services available via telemedicine.

Prior to the COVID-19 pandemic, it was widely believed that telemedicine could not substitute for in-person contact with a physician. However, health care leaders suggest the current crisis has pushed the development of telemedicine forward by at least a decade. Medical providers and patients alike are finding this model of medicine safe, efficient and effective. While the changes are most broadly relevant to primary care, the trend toward telemedicine is increasingly applicable to specialists.

2. Traditional models of employer-based health insurance will become increasingly less relevant.

In the struggling economy, employers are under increased pressure to reduce costs. Some predict that health reimbursement arrangements (HRAs), in which employers reimburse employees for medical expenses and even some insurance premiums, will become more prominent. While HRAs may provide employers more certainty over their costs by replacing traditional group health insurance plans, some experts caution they offer employees less assistance with medical costs than traditional employer-based coverage.

3. Nursing homes and assisted living facilities will lose their appeal.

In most states, deaths in nursing homes and long-term care facilities have accounted for over one-third of COVID-19 fatalities. While these facilities provide 24-hour medical care, many individuals and families are determining that society’s most vulnerable should not live in such close quarters. This shift, however, could lead to a huge increase in demand for home health aides and in-person medical services delivered to elderly Americans at home.

4. America will reach an inflection point on racial disparities.

Across the country, COVID-19 is causing the deaths of people of color, particularly African Americans, at staggeringly disproportionate rates. To some critics of the U.S. health care system, the stark disparities are not surprising. However, there is hope this tragedy could prompt a long-overdue discussion about the social determinants of health. While there have been past studies on equity and justice in health care, COVID-19 may stimulate a new focus on potential policy solutions.

5. The pharmaceutical industry may rehabilitate its reputation.

The COVID-19 pandemic has placed unprecedented pressure on pharmaceutical companies, which have been widely criticized for high drug prices, to rapidly develop vaccines and treatments. Some health experts expect the pandemic to help the pharmaceutical industry restore its reputation with policymakers and showcase their vast research and development capabilities. In addition, the current situation may prompt new discussions about how the U.S. prices pharmaceuticals, especially in light of the barriers to care high drug prices could pose to millions of unemployed Americans.

6. Drug manufacturing will be revitalized in the U.S.

Amid growing concerns that the closure of China’s factories during a national lockdown could cause shortages of critical drugs and medical supplies, lawmakers on both sides of the aisle support moving production to the U.S. The COVID-19 pandemic has inspired bipartisan support for our country to become less reliant on both China and India for pharmaceutical manufacturing capacity. In fact, companies such as Pfizer Pharmaceutical have already increased their U.S. manufacturing capacity, with more expected to follow.

7. There will be a new era of health care preparedness.

There is a general consensus that America’s health care infrastructure was not ready for the pandemic – both in terms of its ability to conduct testing and, later, to provide the workforce required to conduct contact-tracing of thousands of new COVID-19 cases per day. As a result, several proposals to increase the health care workforce in times of emergency have been introduced by legislators. For example, a bill from House Democrats would fund a $75 billion contract-tracing workforce to track the spread of COVID-19. Others have proposed creating a network of retired doctors, practitioners and even medical students to mobilize during a health disaster.

8. Nurses, nurse practitioners and physicians will play a larger role in medical care.

The coronavirus pandemic has placed tremendous pressure on emergency rooms and intensive care units, while highlighting the important role of non-physicians. The critical need for nurses, nurse practitioners and physician assistants is even more evident at rural hospitals across the nation, where many practices could provide less expensive care by depending less heavily on physicians. Overall, this will elevate the importance of skilled nurse training and skilled nurse activities in health care.

9. The way health care practitioners are paid will change.

During the high demand for coronavirus treatment, there has been a low demand for other health care services. As a result, the revenue stream of many doctors and hospitals has dramatically decreased. In fact, many hospitals and physician practices across the country have reduced the workforce, wages and benefits to save costs. This dynamic could disrupt the traditional model of paying for health care services in individual line items (known as fee-for-service medicine) and make way for other payment structures. Overall, practices with some type of guaranteed payment structures are more likely to thrive and survive in the future.

Pacific Federal is a subsidiary of Zenith American Solutions.