With the flu season ramping at unprecedented rates, and a new surge of RSV coming when COVID-19 numbers are rising again, the topic of a healthcare surge emergency is back in the headlines. What the New York Times is calling a “Tripledemic” is threatening to overwhelm providers and hospitals yet again. During the peak of the pandemic, hospitals experienced a surge in demand for physical resources and personnel that lasted nearly two years. And just when things started to adjust back to some recognizable norms, the question is again on everyone’s mind: “How do we tackle a surge?”
According to Shereef Elnahal, MD, president and CEO of University Hospital and former Commissioner of New Jersey’s Department of Health, hospitals and health systems often lose money during their peak seasons. Supply shortages are largely due to the fact that most hospitals use a fee-for-service payment model.
Hospitals that charge on a fee-for-service basis are paid based on the volume of patients they treat, not the quality of patient outcomes. Because of this, hospitals usually operate at full capacity in order to reap the greatest rewards. When patient volumes rise during peak seasons, however, hospitals have little margin for error.
According to static payment rates for inpatient care, hospitals may struggle with seasonal demand. In order to keep up with surges, health systems may have to hire more staff or order more supplies, which leads to increased expenses despite no increase in revenue.
During flu season, primary care physicians often augment their workforce by up to 30 percent and still face financial challenges and capacity limitations. Across all healthcare facilities, staffing shortages have become worse as a result of the COVID-19 pandemic, which increased the need for healthcare professionals.
Rather than relying on simply adding more headcount, health systems needa model that can easily adjust healthcare delivery to fit any situation, including increased patient capacity and pandemic surges. Creating a value-based payment model may give health systems more flexibility when dealing with demand surges.
According to the quality of care, providers are compensated using value-based payment models, not the quantity. This approach may inspire health systems to improve staffing procedures. In contrast to dividing physicians’ time in a way that will lead to the highest number of completed services, health systems might focus on patient needs and health outcomes in order to address them.
Physicians using a value-based model are less likely to refer patients to specialty care facilities if those referrals are not medically beneficial.
Because of Maryland’s value-based all-payer model, which reimburses hospitals using global budgets for inpatient episodes of care, hospitals in the state were able to manage the influx of patients during the pandemic far better than neighboring states with different models.
A study from JAMA Network Open noted that the all-payer model also decreased surgical spending and surgical complications. Providers can save resources and supplies for busy periods if they are reimbursed based on outcomes rather than quantity of services.
Patients may be able to avoid expensive hospital stays, saving staff time and resources, if they have access to healthcare services at home. Hospitalization rates may also be lowered by using home-based primary care services.
In addition, health systems could leverage telehealth services to assess patients and determine if an in-person visit is required. According to the authors, telehealth use could improve access to care and save hospitals money.
Patients may also be able to manage their acute conditions from home using remote patient monitoring technology.
Surges can also be a contributing factor to physician burnout. That is why reducing physician workload (blog post) should be a part of hospitals’ strategy of dealing with patient surges.
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