Sunday, December 5, 2021

    What the Senate’s $2 trillion stimulus bill means for digital health

    What the Senate’s $2 trillion stimulus bill means for digital health

    The US Senate sent a $2 trillion stimulus bill — the Coronavirus Aid, Relief, and Economic Security (CARES) Act — to the House of Representatives with the aim of reviving the US economy amid the coronavirus pandemic.

    The majority of US adults across ages are willing to try telehealth



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    And players across the healthcare continuum could stand to see significant financial relief through the terms of the bill, according to FierceHealthcare. For context, the US House of Representatives hopes to approve the bill via voice vote on March 27th.

    These are the provisions that are most likely to impact healthcare, particularly the digital health industry:

    • Hospitals will receive $100 billion to cover expenses and recoup lost revenue associated with the coronavirus. This could provide some relief to hospitals incurring up to $1 million in costs per day that stem from treating coronavirus patients, purchasing additional supplies, and cancelling or delaying nonessential, revenue-generating procedures, per estimates from The American Hospital Association, American Medical Association, and American Nurses Association. 
    • The Federal Communications Commission (FCC) will receive $200 million to aid providers offering telehealth services. The bill provides the FCC with the capital and authority to rapidly fund telehealth programs across the US and enable remote monitoring to contain the spread of the virus. This could increase demand for telehealth services among hospitals and health systems, which we expect to see increasingly pursue tie-ups with telehealth vendors to address the surge in coronavirus patients who can be treated virtually.
    • And $275 million will be allocated to expand capacity and services for rural hospitals, among other providers. Rural hospitals in the US have been hit particularly hard by the coronavirus pandemic: Many are already on unstable financial ground and now have to grapple with restricted cash flow due to canceling elective procedures — leaving many questioning how much longer they’ll be able to keep their doors open.

    And while we think some of the bill’s provisions will have a large impact on the healthcare system and digital health players — some will only extend so far:

    • We think the influx of cash allocated to expand services for rural hospitals should help extend the reach of rural providers beyond the pandemic. While upward of 120 rural hospitals shut their doors over the last decade due to financial woes — an issue that’s being compounded by limited liquidity amid the pandemic — the influx of $275 million in funding should help put rural hospitals on stable ground through the course of the pandemic. This could prime their telehealth programs for more effective, efficient usage and drive a rise in uptake once the pandemic has subsided.
    • And while the $100 billion floating toward hospitals would help counterbalance coronavirus-related costs in the near-term — more funding will be necessary to offset massive costs the long run. The rising number of coronavirus cases in the US and health officials’ expectation that the peak is yet to come suggests funding beyond the $100 billion will be needed by hospitals to offset their coronavirus-associated costs in the long-term. For example, not-for-profit Fair Health projects the total charges to treat coronavirus patients in hospital settings in the US could range from $362 billion to $1.45 trillion.
    • And the FCC’s fresh cash would help virtual care providers boost their services — but they’ll need to overcome their tech limitations to secure consumer adoption in the long-term. Virtual care providers would greatly benefit from the FCC’s receipt of $200 million to expand their services across the US, as many are struggling to meet hikes in demand. For example, telehealth services have experienced a 312% increase in demand from New York patients amid the pandemic — but the rise in demand has bumped average wait times from six minutes in January to thirty-three minutes currently, which could dissuade consumers from using the tech once the pandemic has subsided. So, while the $200 million could help virtual care providers boost their services, they’ll need to ensure they overcome these technological limitations before telehealth is effectively leveraged on a wide scale.

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