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The Call @ Hedgeye | March 28, 2024

Takeaway: Return of elective procedures is an economic imperative; but the pace will depend in state policy and public perception

IN-DEPTH | Modeling the Pandemic: Return of Elective Procedures $THC - 01.27.2020 coronavirus cartoon  2

Editor's Note: This is a complimentary research note published by Healthcare Policy analyst Emily Evans. CLICK HERE to get daily COVID-19 analysis and alerts from our research team and access our related webcasts

At the daily COVID-19 press briefing, President Trump included in his prepared remarks an encouragement for patients and doctors to determine when to proceed with an elective procedure rather than to assume a blanket prohibition. The day previous, CMS had sent guidance to providers on a tiered approach to elective procedures. Low acuity visits should be delayed or replaced with telehealth. More pressing health concerns should be addressed. Complete guidance document can be found here.

The president’s statement notwithstanding, most states are under Executive Orders that significantly limit or prohibit elective procedures. While there is no agreed upon definition of “elective procedure” several Executive Orders indicated that it should be considered any medical service for which a delay of 30 days would not produce adverse consequences.

Yet, as the COVID-19 outbreak abates – and in a number of states never gained steam – the focus in the coming weeks will shift to terminating or amending existing executive orders. Texas Governor Gregg Abbott indicated he would be releasing new guidance on Tuesday. Meanwhile President Trump tweeted that Governors should “get ready.”

IN-DEPTH | Modeling the Pandemic: Return of Elective Procedures $THC - Slide1

As we have noted, really since the beginning of the outbreak, return to some level of economic function is going to be driven by a number of risk factors at the state and local level. Those factors include the depth and breadth of the outbreak, the capacity and skill of the regional and local health care delivery system and the sophistication of the state and county public health department.

IN-DEPTH | Modeling the Pandemic: Return of Elective Procedures $THC - Slide2

To model the return of elective procedures, it is important to know the geographical footprint of each health system. THC, for example, operates inpatient acute care hospitals in nine states and ASCs in about 24 states.

IN-DEPTH | Modeling the Pandemic: Return of Elective Procedures $THC - Slide3

In all but one state in which THC operates an inpatient hospital, there is an Executive Order limiting or prohibiting elective procedures.

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However, the experience of these states has been different. Only Michigan and Massachusetts achieved the logarithmic phases of COVID-19 similar to those found in the New York Metro area. In the case of the other states, the curves have been flat and the disease outbreak manageable.

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Similarly, of the 24 states in which THC operates an ASC, all but six are under Executive Orders discouraging/prohibiting elective surgeries.

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These states have also had different experiences with COVID-19

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From this data we can see that states that have managed COVIID-19 or just got lucky are going to be more willing to relax prohibitions on elective surgeries.

We can expect sometime this week or early next that there will be changes to executive orders in Texas, Tennessee, Alabama, allowing about 6,000 THC Inpatient beds and about 280 ASC operating rooms to be available for elective procedures once more. By mid-May the states of Florida and Arizona should follow suit. California, Michigan and Massachusetts which have all been impacted more significantly will relax guidance on elective surgeries in early summer.

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Of course, a state can change its policies all it wants. That doesn't mean the public will embrace the idea. As the Google Mobility data demonstrates, people don't need an executive order to change their behavior. The path back to elective surgeries till be slow and potentially interrupted by outbreaks here and there.

IN-DEPTH | Modeling the Pandemic: Return of Elective Procedures $THC - Slide9