Latest patient volume data highlights some of the challenges facing hospitals in the COVID-19 era

• Hospital patient volumes show signs of rebounding in some areas but continue to lag in others, especially in the ED.
• The ongoing decline in ED volumes has significant implications for both population health and hospital finances.
• Outpatient care could bounce back strongly unless future COVID-19 spikes force hospitals to again pause or scale back elective procedures.

As new sets of data show the continuing impact of the COVID-19 pandemic on patient volumes, hospital leaders are left to ponder what a recovery will look like.

Recent reports from Kaufman Hall and TransUnion are among those quantifying the decline in volume throughout 2020. The reports also contain reasons for optimism, but plenty in the coming months will be out of hospitals’ control.

Not surprisingly, the main factor will be the country’s ability to quash the pandemic.

“We can tell you actually what will happen if you can just tell us exactly the path of COVID and COVID vaccinations,” said Jim Blake, managing director with Kaufman Hall.

The latest volume trends are a mixed bag

Kaufman Hall’s latest National Hospital Flash Report notes that in 2020, “Hospital margins fell significantly with declining volumes and outpatient revenues, and escalating expenses compared to 2019.”

A spike in COVID-19 hospitalizations helped make December the second consecutive month in which inpatient volumes surpassed 2019 levels year-over-year, with patient days up 4.5%. But discharges were down 4.3%, “reflecting a continued increase in higher-acuity patients.”

“We’ve seen a general trend of improvement, with a few exceptions,” said Erik Swanson, vice president of data and analytics with Kaufman Hall.

Among those exceptions, ED volumes remained a drag on hospital performance. ED visits were down 16.2% in 2020 compared with 2019 and 22.6% year-over-year in December, although December marked a 1% uptick from November.

OR minutes were down 10.5% for the year and 3.9% year-over-year in December but increased by 5.8% from November.

“That fluctuates primarily based on consumer sentiment in the market about how the virus is doing, as well as any self-imposed pauses on some of those outpatient-type surgical services,” Swanson said.

TransUnion reported that as of the week of Dec. 13, ED volumes were down 30% and inpatient volumes were down 8% compared with pre-COVID-19 levels.

The ED volume decline has big implications

“There is a definite ‘new normal’ of ED patients that used to come to the hospital [and] are no longer coming,” said Jonathan Wiik, principal with TransUnion.

“Where did strokes and heart attacks and cancers go? It’s not like there was a massive relief of those types of things. I think patients found alternative levels of care or didn’t go at all during that time. That was alarming to me.”

As HFMA reported in the cover story of the hfm Winter 2020-21 issue, “Providers and health plans are increasingly worried that patients under-treated during the pandemic could re-emerge sicker — and costlier — in 2021.”

Patients who went to the ED pre-pandemic likely have pursued one of three options, Wiik said:

• Virtual visits
• Alternative sites of care such as urgent care centers or physician’s offices
• Forgoing care altogether

Now that those options have been ingrained in patients’ minds, Wiik said, “I don’t think we’re going to see emergency department visits ever come back to what they were before this happened.”

In addition to potentially having adverse effects on population health, the volume decline takes a toll on hospital finances. EDs might not be a substantial source of revenue, Wiik noted, “but they certainly are a feeder for a lot of the other services in subspecialties like imaging and cardiology and oncology and orthopedics and those types of things.”

The reduction also affects case mix index (CMI) because a larger proportion of the remaining patients have severe conditions.

A higher CMI can translate to higher payments in a DRG-based system, Wiik said. “But I don’t think anybody would have wanted that.”

Outpatient care is an X-factor

While inpatient volume trends are linked at least partially to ED volumes, outpatient care represents “the wild card,” Wiik said. Patients could be more comfortable returning for those services, but hospitals also may have to pull back on offering them in response to any future surges of COVID-19.

The stakes are high, he added, because elective procedures typically account for 60% of volume and “subsidize most everything else in the house. It’s very, very fragile when you start dialing that down. That’s why we saw so many furloughs, so many hospitals go into the red and such a dramatic response from the government.”

Swanson pointed to notable volume increases in certain specialties, including psychiatry, as captured in Kaufman Hall’s quarterly Physician Flash Report. That upturn likely stems from increased stress and anxiety levels during the pandemic and the capacity of telehealth to boost the provision of mental healthcare.

Telehealth also may be part of the path back to peak performance for hospitals and other providers.

“What we saw was how much the consumer behavior impacted some of the operations and finances early on” in the pandemic, Swanson said. “Going forward, really figuring out how to engage with consumers in the population and their communities in meaningful ways will be critical.”

The short-term forecast is murky

TransUnion projects that ED volumes will continue to lag, with Q2 2021 likely remaining at the pandemic-era baseline. “However, visits may gain some ground as patients become more comfortable returning to hospitals due to widespread vaccination administration,” the report states.

Inpatient volumes likewise will remain low compared with pre-pandemic levels, while outpatient volumes “will likely snap back in the first quarter and level off around pre-COVID-19 volumes by the fourth quarter.”

Reflecting on the state of the hospital sector, Wiik said organizations that were struggling before the pandemic may be hard-pressed to bounce back from the hit they’ve taken over the last 11 months. Those providers might be looking at getting acquired or shutting down.

For organizations that were in a stronger position to begin with, challenges loom in the short term. But those providers also can turn their pandemic experience into an advantage.

“You’ll end up being stronger in [2021] — maybe not financially, but you certainly created some resilience, and I would argue probably some efficiencies in treating a pandemic and understanding how to operate a very complicated healthcare operation,” Wiik said. “You learn as a hospital to become better through those trials.”