The Costs of COVID-19

The massive economic and health impacts of the global pandemic may be difficult to quantify, but there are still lessons to be learned.

In May 2020, the American Hospital Association issued a report estimating that the total 4-month financial impact of the COVID-19 pandemic on U.S. hospitals and health systems would be $202.6 billion – more than $50 billion each month between March and June.1 That number includes the extra costs associated with COVID-19 hospitalizations and obtaining the necessary personal protective equipment (PPE) for staff, as well as the revenue lost from canceled and deferred services.

But in the era of COVID-19, when the only constant is change, May might as well have been a year ago. May was before new outbreaks across the country throughout the summer set daily records for coronavirus cases.

More recently, the U.S. Department of Commerce reported that the country’s gross domestic product shrank at an annual rate of 32.9% in the second quarter of 2020, a rate that is threefold the previous record and fourfold that of the worst quarter of the Great Recession of 2007 to 2009.2,3

“It just keeps spiraling. It is unprecedented,” said Chancellor Donald, MD, Assistant Professor at Tulane University School of Medicine and Chief Medical Officer of Taking Aim at Cancer in Louisiana and Chair of the ASH Committee on Practice. “I do not know that we will ever be able to truly put our arms around the impact of this illness because it impinges on not just health care, but society as a whole.”

Multipronged Attack

When calculating the pandemic’s impact on the health-care industry, one must look at the effects on health – the direct effects of the virus and the downstream impact of the pandemic – and on the economy, according to Robert Hromas, MD, Dean of the Joe R. & Teresa Lozano Long School of Medicine and Vice President for Medical Affairs at UT Health San Antonio in Texas.

“Every physician now knows that this virus can cause a severe cytokine storm, an immunologic cascade of events that leads to intensive care unit (ICU) admission and necessitates ventilation,” Dr. Hromas said. “What is less well known is the full range of long-term health effects of SARs-CoV-2.”

Clinical experience with the virus has revealed that it can permanently damage the kidneys, liver, brain, pancreas, and other organs.

“We may soon have a cohort of the national population that is permanently disabled from this infection,” Dr. Hromas said.

Indirectly, the virus and fear of contracting the virus has led to deferment of care. A study released in April estimated that the number of visits to ambulatory care practices had decreased by about 60% since early March.4 When lockdowns and stay-at-home orders were lifted, a rebound in visits occurred, but the damage had already been done.

An American Cancer Society Cancer Action Network survey of more than 3,000 patients with cancer and survivors of cancer conducted in March and April found that 50% of respondents reported some influence of the pandemic on their health care. More than 1 in 4 reported a delay in active treatment, and 13% reported a delay in care without knowledge of when it will be rescheduled.5

More widely, Dr. Hromas said patients’ reluctance to come to the clinic or the emergency department has likely led to delay in care of people with heart failure, kidney problems, heart attacks, strokes, and sickle cell crises. Delays in cancer screenings also will likely mean that disease will be more advanced by the time it is diagnosed.

Getting patients necessary care that has been deferred due to the pandemic is a goal of the #ReturnToCare Coalition. The American Society of Hematology recently signed on as a member The Coalition brings together patient advocacy organizations and medical societies (including the American Society of Hematology) to help patients consult with health-care providers to seek treatments in areas where COVID-19 conditions allow reopening – and hopefully prevent progression of disease to more advanced stages, where it becomes less treatable.

Full Recovery May Be Impossible

Economically, most health systems and private practices will be unable to recoup what was lost.

“The major hit to our hospital came over the course of the 4 weeks we were closed in April, which erased all of our budget profit margin,” said Jennifer Holter-Chakrabarty, MD, Associate Professor of Hematology/Oncology at the University of Oklahoma’s Stephenson Cancer Center. “We have not made it up since we reopened, despite the fact that we have been operating near capacity.”

Mayo Clinic, Minnesota’s largest private employer and a “destination medical center” to which many patients come from a distance, was especially affected by reductions in travel due to the virus. In April, Mayo announced that it would institute pay cuts and furloughs due to a projected multi-billion dollar loss.6 Furloughed workers were expected to return to work by the end of August.7

In April, the U.S. Department of Health and Human Services provided financial aid for clinicians through the CARES Act Provider Relief Fund, which designated $175 billion to be distributed to hospitals and health-care providers on the front lines of the coronavirus response.8 The money was distributed according to services provided to Medicare patients in 2019, which left some hospitals out in the cold.

Mayo Clinic is reported to have received about $170 million in stimulus funds. Smaller systems like UT Health San Antonio got about $3 million from the CARES Act and an additional $2.9 million based on the cost of caring for patients with COVID-19, according to Dr. Hromas.

“That was about 15% of the approximately $30 million that we directly or indirectly lost from COVID-19,” he said. “What has really helped locally is the $600 stimulus for unemployment benefits, which has helped many people to maintain health insurance.”

Local unemployment rates also will affect UT Health San Antonio’s financial situation, Dr. Hromas said, as it expects to see an increase in the self-pay rate because of lack of employer-based insurance.

“We are already planning for that by putting in place special clinics and payment plans and partnering with other local hospitals to plan for the care of these patients,” he said.

Can Private Practices Weather the Storm?

The decline in patient volume during the COVID-19 pandemic is straining hospitals and health systems, but these organizations are better equipped to weather the storm than independent providers. Clinicians at smaller private practices will likely feel the pressure of lost revenue.

To date, no staff at the Willamette Valley Cancer Institute and Research Center, where Chris Yasenchak, MD, provides cancer care, have been laid off or had to take salary cuts. Dr. Yasenchak is a hematologist/oncologist in Eugene, Oregon.

“Our practice serves an area of hundreds of thousands of people, as it is the only cancer care group in our region of the state,” Dr. Yasenchak said. Because of the lower prevalence of COVID-19 in the region, the pandemic has not disrupted his practice as much as other private practices in the U.S., but it has still seen at least a 10% reduction in revenue.

This lost revenue is the result of several factors, including the postponement of all nonessential visits and the reduction in the capacity of the practice’s infusion centers. Despite the loss in revenue, Dr. Yasenchak said that the practice has been forced to look into building out its infrastructure and has had to hire additional staff to comply with COVID-19 regulations.

The practice is looking to expand its main office space and obtain additional space elsewhere, for example. Its infusion room capacity has been decreased by about one-third, Dr. Yasenchak estimated, and even with new measures like opening earlier, closing later, and considering opening on weekends, they do not currently have the space to both serve all their patients and maintain safe social distancing.

“We believe this is how things are going to be for some time,” Dr. Yasenchak said. The practice is trying to stay prepared. “We were provided some relief funds, but they will not come close to offsetting COVID-related expenses to bring us into compliance.”

For example, the bid to remodel and expand the infusion centers and waiting rooms is between $2 and $3 million. The practice is installing an ultraviolet light system for its ventilation system and has had to hire new staff to screen patients at in-person appointments, as well as devise policies and practices for the team to stay COVID-compliant.

“Laboratories are struggling and frantic because they have lost staff and samples that will take years to rebuild.”

—Jennifer Holter-Chakrabarty, MD

PPE also has been a huge challenge, Dr. Yasenchak added: not just obtaining it, but paying for it.

“We have installed plexiglass dividers in the front office and are providing PPE including masks, gowns, goggles, and cleaning supplies to keep our staff and patients safe,” Dr. Yasenchak said. “It remains an additional and significant cost, but we can’t run the practice safely without it.”

Anecdotally, Dr. Donald has heard similar reports from private practices in his area, many of which have been able to maintain patient loads of 70% to 80% of pre-COVID rates thanks to virtual visits.

“Practices are certainly struggling, but many of those may be practices that were not nimble enough to make quick adjustments,” Dr. Donald said.

Dr. Hromas noted that many of UT Health San Antonio’s community partners have “suffered greatly.”

“One of our advantages is that we were early adopters of video visits, so we were able to expand that remarkably fast,” he said. Not all practices were able to adapt and many were starting from scratch as they tried to pivot to telehealth.

Lasting Effects on the Health-Care Workforce

The effects of COVID-19 are being felt not just in private practice but throughout the hematology/oncology workforce, from top to bottom. At OU Medicine, said Dr. Holter-Chakrabarty, all executives and leadership took a 10 to 25% salary cut for March, April, and May to help reduce costs until volumes have normalized.

“We also had to contract or eliminate all premium pay categories – overtime, swing shifts – for those same months in order to maintain solvency,” she said.

At UT Health San Antonio, maintaining employment was a priority, but that came at a cost, Dr. Hromas said.

“That meant no raises, no expenses, no new hires, no travel, no journal subscriptions, no meetings. Every single nonessential expense was stopped and there was a hiring freeze for non–revenue-generating positions,” he explained. “Everyone has had to be flexible. We have reassigned a lot of people.”

Despite efforts to maintain employment, health systems and private practices may be losing staff.

“I have seen loss of staff because when things shut down, a number of nurses, physician assistants, and nurse practitioners – positions primarily held by women – were pulled from the workforce for childcare,” Dr. Holter-Chakrabarty said. “The number of physician assistants in our bone marrow transplant program is down 50% because of COVID and this is not unique to this section. It is happening in every section.”

The pandemic’s disruption also may have a disproportionate effect on young professionals. Henry Ford Hospital in Michigan recently published a paper detailing how it has adapted its hematology/oncology fellowship program in the time of COVID-19, which includes 2-week at-home rotations after 2 weeks of caring for hematology/oncology inpatients and 2 weeks of COVID-19–related inpatient duties.9

“Medical education programs may have to rapidly adapt to changes in care delivery systems, including remote patient care activities, without compromising the skills of the future workforce,” the authors wrote.

A similar article written by cardiology fellows lamented the loss of “lively roundtable lectures and discussions among assembled fellows and attending physicians,” and discussed the effect on their personal lives.10 “Time spent with family and friends is critical to maintaining our mental health but must now be sacrificed to mitigate the risk of infectious spread,” they wrote. “Even the camaraderie of the fellowship, built on shared meals and commiseration, diminishes because we are no longer able to congregate in a single location.”

Research Interruptions

The profound effects of the pandemic are not being felt by clinicians alone, but also by their colleagues in research.

Dr. Holter-Chakrabarty estimates that her institution’s clinical trial accrual is down by 10% for the year, compared with previous years. Trials of potentially life-saving treatments were maintained but, in some cases, adapted so that participants could get as many visits or treatments virtually or in their local communities as possible. In contrast bench research at her institution was shut down completely.

“Those colleagues who have laboratories are struggling and frantic because they have lost staff and samples that will take years to rebuild,” she said.

During the shutdown, Alisa Wolberg, PhD, Professor of Pathology and Laboratory Medicine at the University of North Carolina (UNC) at Chapel Hill and member of the UNC Blood Research Center, said that she and her colleagues have adapted as best they could.

“There were a lot of questions about who could work from home or how they could structure work from home so that it ‘counted,’” said Dr. Wolberg, who added that labs at UNC were shut down from mid-March to June 1.

Loss of time, research, and grants are also chief concerns.

“The typical NIH grant duration is 4 years, which isn’t a lot of time if you have several experiments planned,” Dr. Wolberg said. She and many of her colleagues were forced to reduce or cull animal colonies or discard cell lines. That meant interruptions in ongoing experiments or indefinitely delaying others.

“This puts a real break in the amount of time we are able to generate data,” she said. “This can have tremendous implications for private investigators holding grants, who need to report progress to the NIH, and their trainees, who are supported by those grants.” Trainees are in a much more transient phase of their careers, in which everything in the current phase helps determine the next phase, she explained. Graduate students need to publish to accrue evidence of scientific productivity or knowledge.

Dr. Wolberg said her lab also had to slow down animal breeding that was planned in anticipation of future experiments and will have to completely restart some experiments.

Dr. Holter-Chakrabarty worried that disruptions to bench research may also result in the loss of researchers from academic institutions to industry positions, where there may be more job opportunities or stability.

Lessons to be Learned

Fortunately, as of August, the labs at UNC have reopened and researchers are attempting to get back to a new normal, Dr. Wolberg said. Many other parts of the country have begun the reopening process, but nothing is the same.

According to Dr. Hromas, there will almost certainly be a population of practices and hospitals that will never recover from this crisis. “People have been talking about a pandemic for years,” Dr. Hromas said. “This should not have surprised us, but it did.” He hopes the health-care industry and the nation will learn from these past few months and apply the lessons to the future.

The first lesson to learn, he commented, is that the U.S. government failed in implementing policies to lessen the spread of the virus quickly. “Nationally, we failed in testing, implementation of mask requirements, and social distancing. We didn’t extend the lockdown long enough – we needed another 2 to 3 weeks.”

Another takeaway discussed by Drs. Hromas and Holter-Chakrabarty is the amount of multidisciplinary work that has been done to understand COVID-19 – for which the clinical and research communities should feel great pride.

“We are learning so much about the immune system and about working with our colleagues across disciplines because of COVID-19,” Dr. Holter-Chakrabarty said. “I didn’t know anything about extracorporeal membrane oxygenation or prone positioning or a variety of other things that happen in the ICU, but this pandemic forced me to get on the ground and learn.”

As part of a COVID-19 therapeutics task force at her institution, infectious disease physicians have teamed up with specialists in areas they would not typically have interacted with – vascular medicine, cellular therapy, bone marrow transplant, transfusion, and pulmonary critical care.

Dr. Hromas said that the pandemic also has proven the strength of the academic health enterprise.

“I am a molecular biologist working in genomic instability and oncogenesis, and all seven people in my lab are working on aspects of this infection,” Dr. Hromas said. “We repurposed really quickly and have learned a lot about the basic biology of this disease.” These lessons will be applicable to understanding other RNA viruses in the future, he added.

Finally, although the country is still struggling to handle the current pandemic, Dr. Hromas said this is exactly the time to be thinking about the next one.

“We need to think now about the long-term effects of this pandemic and how we can prevent it from happening again,” Dr. Hromas said. “There are questions to be asked that I don’t see being asked. We need to start that now.” —By Leah Lawrence

References

  1. American Hospital Association. Hospitals and Health Systems Face Unprecedented Financial Pressures Due to COVID-19. https://www.aha.org/guidesreports/2020-05-05-hospitals-and-health-systems-face-unprecedented-financial-pressures-due. Accessed August 6, 2020.
  2. Bureau of Economic Analysis. U.S. Department of Commerce. Gross Domestic Product, 2nd Quarter 2020 (Advance Estimate) and Annual Update. Accessed August 6, 2020, from https://www.bea.gov/news/2020/gross-domestic-product-2nd-quarter-2020-advance-estimate-and-annual-update.
  3. National Public Radio. 3 Months of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever. Accessed July 30, 2020, from https://www.npr.org/sections/coronavirus-live-updates/2020/07/30/896714437/3-months-of-hell-u-s-economys-worst-quarter-ever.
  4. The Commonwealth Fund. The Impact of the COVID-19 Pandemic on Outpatient Visits: A Rebound Emerges. Accessed August 6, 2020, from https://www.commonwealthfund.org/publications/2020/apr/impact-covid-19-outpatient-visits.
  5. Cancer Action Network. COVID-19 Pandemic Impact on Cancer patients and Survivors. Survey Findings Summary. Accessed August 6, 2020, from https://www.fightcancer.org/sites/default/files/National%20Documents/Survivor%20Views.COVID19%20Polling%20Memo.Final_.pdf.
  6. Mayo Clinic press release. Voluntary public disclosure on the financial impact of the COVID-19 pandemic. Accessed August 6, 2020, from https://newsnetwork.mayoclinic.org/discussion/voluntary-public-disclosure-on-the-financial-impact-of-the-covid-19-pandemic/.
  7. Mayo Clinic press release. Mayo Clinic to restore pay and return workers furloughed due to the COVID-19 pandemic. Accessed August 6, 2020, from https://newsnetwork.mayoclinic.org/discussion/mayo-clinic-to-restore-pay-and-return-workers-furloughed-due-to-the-covid-19-pandemic/.
  8. HHS.gov. CARES Act Provider Relief Fund. Accessed August 6, 2020, from https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html#:~:text=The%20Provider%20Relief%20Funds%20supports,lines%20of%20the%20coronavirus%20response.
  9. Balanchivadze N, Donthireddy V. Hematology/oncology fellowship emergency restructuring in response to the COVID-19 pandemic – Henry Ford Hospital, Michigan. J Oncol Pract. 2020 May 14. [Epub ahead of print]
  10. Chau K, Nouri SN, Madhavan MV. Fellowship in the time of coronavirus disease 2019 (COVID-19): A time to adapt. JAMA Cardiol. 2020;5:749-750.