Spokane Journal of Business

Health care industry starts to rebound from COVID-19

Industry experiencing some recovery in ’21

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Despite being caught directly in the crosshairs of a global pandemic, local health care officials report the industry is on the financial mend a little more than a year beyond the arrival of COVID-19.

Shelby Stokoe, Providence Health Care’s chief financial officer, says Providence finished with slight revenue decline of 0.5% for the first quarter compared with the year-earlier quarter.

The loss was driven by January’s rise in COVID-19 cases in Spokane County, the highest COVID census experienced since the pandemic began, she says.

“Our hospital census trends have followed the overall community incidence rate,” Stokoe says.

Providence Health Care operates Providence Sacred Heart Medical Center & Children’s Hospital and Holy Family Hospital here, as well as a number of Spokane-area urgent-care clinics and specialty practices.

In the Journal’s 2021 Book of Lists, Providence reported Sacred Heart had 2,289 full-time employees, up slightly from 2,280 the prior year. Providence reported 878 full-time employees at Holy Family in 2021; down from 898 in 2020. The total number of full-0time employees totaled 3,167 in 2021 compared to 3,178 the year before.

Stokoe says the length of stay at Providence facilities ran about a half-day longer than normal due to the ongoing placement challenges related to the virus. Longer stays drive up costs for medical care facilities.

“That (length of stay) number gets a little bit better every month,” she says. “But I expect that will be the case for greater ’21.”

As a result, surgeries and procedures ran roughly 10% behind normal for the first quarter, which was driven by the need to delay selected elective procedures due to the COVID census, she says.

“The biggest impact I expect for the remainder of 2021 is that we were able to start performing surgeries and procedures according to our normal schedule and availability in late February,” she says.

“This is a positive sign for the system overall, because our clinics are often the entry point for many types of services,” she says.

Surgical procedure volumes rose to higher-than-normal volumes in March and April, a function of patients catching up on delayed procedures, she says.

“I expect this will last a couple more months, but not indefinitely,” she says.

In another positive development, Stokoe says clinic visit volumes within Providence Health’s medical group are off to a strong start this year.

While revenue is improving, Stokoe says Providence Health doesn’t yet have enough positive months behind it to feel like it’s fully stabilized financially.

Inpatient admissions and emergency department services still haven’t returned to previous levels since before the start of the pandemic. Stokoe says Providence Health is experiencing a trend felt both locally and nationwide when it comes to declining emergency room visits.

“Some of this decline is positive as people are finding less expensive care locations, such as urgent care and telehealth to meet their needs,” she says.

However, there is an industrywide concern that people are delaying care, which could likely increase future health care costs, she says.

Based in Chicago, Kaufman, Hall and Associates LLC, a national health care consulting firm, reported weekly cancer screenings for breast, colon, and cervical were down between 86% to 94% throughout most of last year.

“The CARES (Coronavirus Aid, Relief, and Economic Security Act) Act provider relief has given some support to the health care delivery system, but 2020 margin still declined nearly 2% compared to 2019,” the report says.

Stokoe says Providence Health last year cut expenses in areas such as capital expenditures, purchased services, and travel. Those cuts likely will remain in place for most of the year.

“Overall, I expect it will be 2022 before we know what our new trend line looks like, both for areas that return to historical norms of 2019 and prior, and for areas that have likely changed permanently,” she says.

A potential permanent change involves telehealth visits, which increased during the pandemic. Now, 10% of Providence Health’s clinic visits occur via telehealth, she says.

“This is a positive change because we weren’t able to get paid for these prior to the pandemic,” she says. “Having revenue to cover this service offering has allowed us to better adjust to patient needs.”

At Premera Blue Cross, the state’s largest health insurer, the Mountlake Terrace, Washington-based provider gained an additional 63,000 members companywide over the course of the last year, says David Condon, Premera’s vice president of Eastern Washington.

Premera now provides health benefits to 2.5 million members, including more than 260,000 in Eastern Washington and Kootenai County.

“And we saw many of them activate telemedicine,” says Condon, a former two-term Spokane mayor.

Condon says Premera saw 600,000 customer claims filed in 2020 through use of telehealth services alone due to   statewide closures at clinics and facilities because of the pandemic.

“That’s a 3,000% increase from the previous year,” he says.

Condon says Premera also saw a rise in telehealth use among rural customers across the state.

“It acts as a technological bridge for our members to access the care that they want when they want it and where they want it,” he says.

Condon says the reopening of the economy and Premera’s expanded service offerings for employers and customers, are helping to play key roles in membership growth.

Premera has roughly 3,200 employees, with close to 700 of them in Spokane.

The organization has plans to open a fourth Vivacity Care Center in Spokane which will be located at 307 W. Sixth just south of downtown. The Vivacity clinics are focused on the same principals of retail health care – convenience, ease of access, and patient experience.

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