Some industry players are still trying to move past the COVID-19 pandemic 4 1/2 years after health officials declared it a global health crisis, though the lingering effects are giving others a financial boost.
Executives at health systems, insurers, home health agencies and virtual care companies have pointed to the pandemic's continuing impacts as they feel out the latest trajectories for labor costs, utilization rates and investment priorities during earnings calls, investor presentations and conferences.
Related: Why Medicare Advantage plans are losing more providers
Some in the industry still cite the pandemic as a driver behind certain challenges. Others say healthcare is facing a new status quo, not a pandemic-era struggle that will be overcome.
Here is how healthcare executives say the COVID-19 pandemic continues to affect finances and operations.
Hospitals and health systems
Providers are still working through labor shortages and capacity strains accelerated, but not always caused, by the COVID-19 pandemic. A post-pandemic rebound in patient volume has been a welcome change from the revenue perspective, but is creating new issues by driving up expenses. Labor costs remain high due to a new market standard for wages.
“There is going to be some level [of impact],” said Arthur Wong, healthcare managing director at S&P Global Ratings, of the COVID-19 pandemic's continuing effects on health systems. “Does it rise to the level that they are actually citing it? It depends on who you’re talking to.”
Dallas-based Tenet Healthcare CEO Dr. Saum Sutaria said at a conference earlier this month he expects a pandemic-related volume spike to last into 2025. Renton, Washington-based Providence noted in its latest quarterly earnings report that management is reassessing service lines as the system navigates the continuing economic effects of the pandemic, including inflation and labor shortages.
Other providers view the pandemic as a thing of the past.
Steve Filton, chief financial officer at King of Prussia, Pennsylvania-based Universal Health Services, said the for-profit system's pipeline of deferred procedures is largely exhausted.
Dr. Jeremy Cauwels, chief medical officer at Sioux Falls, South Dakota-based Sanford Health, also said the COVID-19 pandemic's impacts on operations have largely passed, and the virus has become just one more infectious diseases staff members encounter.
“You’ve got to be able to move forward and say this is part of the loop that we’re in and this is going to be part of the infectious disease milieu for probably the rest of our medical careers,” Cauwels said.
Insurers
Providers may be split on whether the COVID-19 pandemic is the key factor in volume trends, but insurers say higher utilization costs — particularly in Medicare Advantage — are still partly attributable to it.
Dr. Cathy Moffitt, chief medical officer at Aetna, said pent-up demand from patients who were afraid to go to the doctor in recent years is a contributing factor.
"We at Aetna and a lot of folks in the industry are trying to understand the trends," Moffitt said.
She said insurers are investigating what the other trend drivers might be, aside from the COVID-19 pandemic, "so that we can help people with good care models to address their condition."
Marty Anderson, chief strategy and business development officer at Group Health Cooperative of South Central Wisconsin, also said in August the "COVID hangover effect" is still in play. He said there are direct costs from treating the virus and administering vaccinations, as well as indirect costs related to deferred care.
“I'd really like to be in the camp of saying that, ‘Yeah, we're post-COVID. We don't have to worry about it anymore. It's not going to affect us anymore.’ I don't think that we're quite there yet,” Anderson said.
Home health agencies
Home health providers continue to feel staffing strains exacerbated by the pandemic.
Scott Williams, vice president of talent at Interim HealthCare, said the home health and hospice provider hasn’t fully returned to what would have been considered normal operations before the COVID-19 pandemic. Caregivers continue to leave the industry at the same time demand for home-based care is increasing.
The home health agencies remain focused on recruiting permanent staff and reducing their reliance on contract workers.
Nursing home operator Good Samaritan Society, for example, reduced its number of contract workers to 150, compared with 700 in early 2022. Still, those numbers have stayed above pre-pandemic levels, said DeeAndra Sandgren, vice president of nursing and clinical services.
Sandgren said Good Samaritan is working to improve the quality of care at its 130 nursing homes, which she thinks will help with staff retention.
Telehealth providers and technology innovations
One telehealth company that benefited from the COVID-19 pandemic says it is working to maintain that momentum in its wake.
“We are a COVID-born company. We would not have existed except for COVID,” said Dr. Lyle Berkowitz, CEO of virtual care company KeyCare. "The big issue is making sure we can scale up. We believe there are economies of scale to be had so that our margins can improve — both with scale and with tech enhancements we’re putting in to improve the efficiency of our providers.”
Providers are spending more of their overall budget on technology post-pandemic relative to what they spent before it, said Eric Decker, a partner at consulting firm Bain & Co.
Harish Battu, health insurance partnerships lead at venture capital firm General Catalyst, said providers that halted innovation projects during the pandemic did so temporarily, and have quickly ramped them back up to stay relevant in a rapidly changing market.
Lauren Berryman, Diane Eastabrook and Brock E.W. Turner contributed.
