5 Imperatives Post covid-19

With the arrival of the COVID-19 pandemic, the future of
healthcare delivery fundamentally changed. In mid-March,
as cases began to surge in regional hotspots from Seattle
to New York, almost every U.S. healthcare system hit the
“pause” button on normal operations. Now as providers
look to “restart,” few will return to their prior clinical
operating or business models.
While the COVID-19 curve of the first surge has flattened
in some regions, the crisis is far from over. Beyond that,
health systems may find that the aftermath of the current
crisis will be more challenging than the initial surge itself.
The post-COVID-19 surge landscape will be characterized
by a materially resized and reshaped patient and
consumer base. This landscape is paired with a pressing
provider need to substantively reduce costs, while refining
clinical operations to provide
coexisting dual systems of care
for both COVID-19 and non-
COVID-19 patients.
As health system leaders
prepare to “restart”
broad-based care delivery,
they must put in place a
careful, coordinated, timely
and comprehensive plan.
They must manage the concurrent short- to mid-term
challenges of recapturing volume and restructuring their
cost base and supporting operations. Additionally, they
must strategically position themselves for the long-term
as care delivery leaders in their community. Without such
an approach, it is not a stretch to contemplate that a $1
billion revenue health system emerges from the post-
COVID-19 surge as an $850 million one.
In times of crisis, it is often challenging to look beyond the
emergency at hand. However, in the post-COVID-19 surge
landscape, health systems have no choice. The future is
no less daunting. In this paper, we summarize the current
market state and highlight five imperatives that health
systems must successfully navigate in the new reality.
...health systems may find that
the aftermath of the current crisis
will be more challenging than the
initial surge itself.
Five Health System Imperatives
in the Age of COVID-19
After the Surge:

After the Surge: Five Health System Imperatives in the Age of COVID-19
z For the next 12–24 months at least, providers must
be able to deliver “dual systems of care” — treating
both COVID-19 and non-COVID-19 patients. And
they must be able to do so flexibly through periods of
COVID-19 surge and relative lesser plateaus. COVID-19
care will require its own system of care with unique
care pathways and protocols and corresponding
containment/safety models. This will be imperative for
the welfare and well-being of both COVID-19 and non-
COVID-19 patients and their care givers.
z Consumer fear of COVID-19 exposure will cause
many to delay or forgo care, or seek it from alternative
sources.
z Patient financial profiles have deteriorated
due to major increases in unemployment and
underemployment, changes in private insurance
coverage and greater individual cost accountability.
Providers should expect a material change to their
payor mix.
z Greater consumer fear coupled with greater price
sensitivity has reduced overall market size for the
foreseeable future.
z The clinical care delivery model has evolved. Virtual
care has seen a decade of projected adoption occur in
four weeks. Consumers now expect — in fact, strongly
desire — virtual care as a principal modality of care.
The movement to care-at-home and other alternative
sites and procedures is now emerging as a preferred
norm of care as well.
z Health system economics have shifted. The marginal
cost of care in this dual environment will be higher.
Respective sources of margin will have changed.
Volume and financial planning will require different
algorithms than those employed in the past.
z The health status of the community has likely
worsened due to patient care avoidance and the
disproportionate impact of COVID-19 on vulnerable
populations.
What has Happened and What Lies Ahead
COVID-19’s impact to date has varied across the country, with some regions experiencing significant pressures from high
COVID-19 volumes and others preparing for surges that may or may not materialize. In both cases, the near shutdown
of some urgent and almost all elective care, as well as surprising declines in emergent volume, such as myocardial
infarction and stroke, has led to a massive reduction in patient volumes and a corresponding degradation in financial
sustainability. Now as providers seek to return to business as usual, they will find the care delivery landscape environment
has fundamentally changed.
COVID-19 has Fundamentally
Changed the Care Delivery
Landscape
“Dual Systems of Care” for COVID-19
and Non-COVID-19 Patients
Consumer Fear of Infection Causing
Delays or Forgoing of Care
Deteriorated Patient Financial Profiles
Reduced Overall Market Size
for the Foreseeable Future
Evolved Clinical Care Delivery Models
including Virtual Care and Care-at-Home
Shifting Health System Economics and
Changing Sources of Margin
Worsened Community Health Status

Imperatives for Future
Health System Success
Against this context, health systems
must reengage with their consumers
and communities and begin to rebuild a
sustainable patient base. At the same time,
they must also restructure their clinical
operations, asset bases and expense
structures to remain viable in this changed
environment. Doing so will require meeting
five imperatives.
Providers must engage consumers and other referral sources
to recapture patients.
LOW
D
Exited
A
High
Acuity
C
Reticent
B
Hesitant
10% 10% 10%70%
HIGH
Overall, the patient market size will be smaller, reimbursement lower and the competition to serve them more intense.
Health systems need to act now to reengage with patients and begin to build a platform for material sustainable
demand. Patient reengagement will be critical, but it will not be sufficient. Most health systems will need to foster new
referral channels if they hope to approach pre-COVID-19 levels of patient activity and revenue. Health systems should
focus on four key strategies to rebuild volume and revenue:
Profile the consumer base.
In most markets, providers should expect to
see a distribution of consumers (please see
Figure 1, right) where despite a small defined
number of high-need patients (A), the great
majority (B) will be hesitant to return to the
care delivery setting. Another cadre will be
even more reticent to return (C) and some
will have exited the market (D). Providers
must profile, size and segment their market
by clinical service to understand volume
recapture potential and requirements.
Figure 1: Consumer Likelihood to Seek Care
i
Recapture
Demand
01 0503
02
04
Fundamentally
Reduce the
Cost Base
Restructure
the Physician
Enterprise
Transform
the Clinical
Operating
Model
Partner with
Purpose
01

Reactivate and accelerate your high-acuity/high-need/
high-willingness patient base.
Providers should aggressively reactivate outreach to those patients
with clinical profiles requiring or desiring immediate care — starting
with their existing backlog of patients whose care had been deferred.
Beyond that, active engagement of high-need clinical cohorts must be
supported by clinical care operations and models that demonstrate
to “early adopter” patients, and the community at large, that urgent
and elective care can be safely and effectively provided in the post-
COVID-19 landscape.
Engage consumers and regain community confidence.
Clinical leadership must employ targeted and personalized direct-to-
consumer campaigns to communicate how their care will be delivered
in the future and how new processes and discrete care environments
for COVID-19 vs. non-COVID-19 patients have been implemented to
safely serve all patients entering the system.
ii
i
iii
iv
Providers must fundamentally reduce their cost base.
Given the projected shrinkage of most markets, and the expected payor mix degradation, it is unlikely that volume
recapture and growth strategies alone will restore required levels of liquidity or financial margin. For many organizations,
the cash and margin needs are significant and immediate, creating a requirement to actively reduce and restructure their
cost base now. To do so will require focusing on two key areas:
Reshape the asset base.
Health system leaders should apply a disciplined analysis to their portfolio of assets to determine which are both
critical to their future strategy and also contribute to sustainable economic performance. Health systems should
consider the sale or closure of assets which are not. This analysis must take into account the characteristics of the
post-COVID-19 market and the future trends that it portends. For example, fewer primary care offices may be needed
as care shifts to virtual models and to improve utilization of the remaining sites. Additional ambulatory surgery
centers and access points in the community may be needed to address patient concerns about going to a hospital for
care and to create lower-cost settings.
In addition, health systems must view their asset base in the context of taking advantage of new consolidation and
market opportunities while also defending against market moves by payors, private equity firms and technology
companies.
Pursue accretive demand
and growth.
Most health systems will need to
identify new referral sources and growth
channels to grow to and beyond historic
proportionate levels. The referral
landscape has changed. Independent
physician practices will reassess their
practice operations, economics and
provider relationships. Market disruptors
ranging from retail to digital providers to
alternative site providers will have growing
influence on patient channels. In many
instances, health systems will find strategic
advantage in quickly and actively exploring
new traditional and non-traditional referral
relationships.
02

ii Reduce operating costs.
Many healthcare organizations have already begun to offset volume losses by reducing employee hours,
enacting furloughs, rolling out compensation reductions, and aggressively reviewing supplies expenditures
and purchased services. However, the challenging economics facing health systems will require leaders to take
an even more rigorous and disciplined approach to reducing their operating costs, including:
Conduct a zero-based review of all fixed costs
from programmatic to third-party service providers to
administrative and management structures. For health
systems whose operating models are still confederated,
this effort should result in a substantial shift toward a truly
consolidated and integrated scale-driven model, structure
and fixed cost base.
Define the optimal approaches to patient and site of/
modality of care management to ensure the most effective
approach to unit cost and total cost of care management.
Assess performance of all programs and operating units
against absolute best practice productivity standards
and appropriate program sizing levels to determine which
areas must aggressively improve performance, downsize,
close or operate through partnerships or other models.
Develop and deploy a corresponding workforce
management plan that can flex with evolving volume
levels during the “restart” period and ultimately is
aggressively right-sized to reflect the health system’s
future baseline activity in the market.
Providers must restructure the physician enterprise.03
The underlying economics for most health
system medical groups was challenging before
the pandemic. In many cases, it was worsening
due to physician compensation increases and
the growth in advanced practice providers (APPs)
without a sufficient increase in revenue. Annual
investments, often reaching more than $250,000
per physician, are no longer sustainable. Health
systems must rethink their overall physician
enterprise model and their associated operational
and business support functions to reduce their
annual expenditures and improve the return on
this investment.
Such refinements might include:
Deploying tailored primary care models
to serve different patient cohorts that deploy APPs and all other
clinicians on the care team to their highest and best use.
Restructuring procedural specialty practices
where complementary providers screen patients so that surgeons
can remain procedurally oriented.
Organizing integrated specialty care teams
comprised of physicians, highly leveraged APPs and complementary
care team members, all dedicated to the needs of specific disease
cohorts — enabling patients to efficiently get most of their care in
one setting and physicians to be increasingly more productive.
Overall, the provider workforce will need to be deployed in a fundamentally different manner to enable new care models
that more effectively leverage physician time. In the process of doing so, physician compensation plans may also need to
be recalibrated and the size of the physician platform itself reassessed in select specialties.

Providers must transform their clinical operating model.
Partnerships, both horizontal and vertical, traditional and
non-traditional, should be closely evaluated.
04
05
Health systems must be able to provide coexisting systems of care
for the COVID-19 and non-COVID-19 patients they will simultaneously
serve. Furthermore, these systems of care must be able to flex with the
roller coaster of surges that are expected over the next 12–18 months.
Effective, efficient and safe dual systems will have myriad clinical
operating requirements — including more detailed and defined clinical
pathways and patient protocols/triage and navigation models; service
rationalization across locations; designated points of specific access and
entry; new approaches to capacity management; and more advanced
infection control and safe space maintenance for patients and staff.
Health systems should assess their partnerships portfolio and determine where affiliating with other organizations can
help them enable or accelerate their action plan. Organizations should objectively analyze and consider opportunistic
partnerships that may emerge from market shifts or that may be advantageous in the future care delivery landscape.
Opportunities may range from financially distressed physician practices to non-traditional partners such as digital health
and technology companies, payors and employers, retailers and private equity firms. Finally, for health systems that
have recently finalized or are currently in the process of partnership planning with another organization, integration will
become increasingly important through a disciplined approach that front-loads the best value creation opportunities in
an expedited manner.
For example, some health systems
anticipating restarting their elective
surgeries in early May have planned
several protocols to reduce infection risks
including dedicated COVID-19 patient
care units, separate points of entry and
elevators for COVID-19 patients, and
aggressive temperature and other forms
of screening for all who enter the hospital.
Roadmap for the Path Forward
The best-positioned health systems coming out of the crisis will have done two things exceptionally well: (1) immediately
addressed their short-term needs around recapturing patient volumes while quickly improving their financial position,
and (2) did so while continuing to advance their longer-term strategic priorities in the context of the “new normal.”
Achieving both these outcomes simultaneously requires a multifaceted, integrated approach where the elements are
optimally sequenced and mutually reinforcing and whose implementation is well-orchestrated.

Page 7
While every health system’s plan will reflect its unique situation, the importance of a plan itself cannot be overstated.
Having a plan that coordinates initiatives ranging from ensuring that an organization’s clinical operations restructuring
is aligned with its cost reduction efforts, and that both those elements support its volume recapture plan, to
communications and stakeholder engagement, is essential.
To manage against the plan, health system leadership should take a page from its current response to the COVID-19
crisis and designate a post-COVID-19 Surge Recovery Team to lead a rapid and integrated implementation across all plan
dimensions. Doing so will enable health system leadership to prosecute the effort with the same urgency, innovation and
agility with which it met and overcame the COVID-19 surge itself.
Time is of the essence. Those providers who promptly mobilize appropriate resources and bandwidth to address these
five imperatives will find that they not only have countered the effects of COVID-19 on their organization, they will have
also captured a unique opportunity to transform themselves and emerge leaner and stronger.
Figure 2: Illustrative Action Plan for COVID-19 Recovery Client Logo
Placeholder
2020 The Chartis Group, LLC. All Rights Reserved. Date Page 1
MID-/LONG-TERM PLANING Next 6-18 Months
# of COVID-19 cases
01
Recapture
Demand
 Profile the consumer base
 Reactivate high-acuity/-need/-willingness patients
 Engage consumers, regain community confidence
 Pursue accretive demand and growth
 Develop 12- to 24-month multi-channel growth
plan
 Launch comprehensive digital and access strategy
02
Fundamentally
Reduce
Cost Base
 Reshape asset base
 Reduce operating costs through comprehensive
financial performance improvement plan
 Deploy network reconfiguration plan
 Revisit long-term capital plan and priorities
03
Restructure
Physician
Enterprise
 Deploy tailored primary care models by cohort
 Restructure procedural specialty practices
 Organize integrated specialty care models/teams
 Right-size physician platform
 Redesign physician enterprise economic model
04
Transform
Clinical
Operating Model
 Develop coexisting systems of care for COVID-19
vs. non-COVID-19 patients
 Develop flex capacity plan
 Expand capabilities across the continuum
(e.g., care-at-home)
 Complete IT enablement of care model redesign
05
Partner
with Purpose
 Assess partnerships portfolio and analyze
opportunistic relationships
 Rapidly integrate new partners
IMMEDIATE ACTIONS Next 1-6 Months
Illustrative Examples
— Not Exhaustive and
Must Be Customized to
Each Circumstance
Immediate actions must be linked to and mutually reinforcing of longer-term strategies

About the Authors
Ken Graboys
Chief Executive Officer
kgraboys@chartis.com
Ken Graboys is the Co-Founder and Chief Executive Officer of
The Chartis Group. His experience in healthcare consulting spans
20 years helping leading academic medical centers, integrated
delivery systems and healthcare service organizations achieve
their strategic and economic imperatives. Mr. Graboys’ work is
concentrated in the areas of: economic and strategic planning,
collaborative venture strategy and affiliations, network formation
and organization, and provider/physician/payor alignment.
Steve Levin
Director, Academic Health
System Segment Leader
slevin@chartis.com
Steve Levin is a Director with The Chartis Group. He has over
35 years of experience as a management consultant to the
healthcare industry. He is a nationally recognized expert in
a number of areas pertaining to academic health system
organization, governance, funds flow and strategy. He also has
significant expertise with clinical program development, mergers
and affiliations, and academic strategy. He has worked closely
with the leadership of numerous universities and their academic
health systems to help define their strategic direction and to help
the leadership team to implement that direction over several
years.
Michael Tsia
Principal
mtsia@chartis.com
Michael Tsia is a Principal with The Chartis Group. He serves
as an advisor to executive leaders at leading academic health
centers, children’s hospitals and community integrated delivery
networks on numerous topics, including enterprise strategic and
financial planning, provider workforce planning, payor-provider
partnerships, and organizational economic alignment/funds flow.
Mr. Tsia has been a leader in management consulting with The
Chartis Group for over 10 years and regularly speaks on a variety
of healthcare strategic planning topics. He also serves on the
Board of Directors for Methodist Hospital of Southern California.

© 2020 The Chartis Group, LLC. All rights reserved. This content draws on the research and experience of Chartis consultants
and other sources. It is for general information purposes only and should not be used as a substitute for consultation with
professional advisors.
Atlanta | Boston | Chicago | Minneapolis | New York | San Francisco
About The Chartis Group
The Chartis Group® (Chartis) provides comprehensive advisory services and analytics to the healthcare industry. With
an unparalleled depth of expertise in strategic planning, performance excellence, informatics and technology, and
health analytics, Chartis helps leading academic medical centers, integrated delivery networks, children’s hospitals and
healthcare service organizations achieve transformative results. Chartis has offices in Atlanta, Boston, Chicago, New York,
Minneapolis and San Francisco. For more information, visit www.chartis.com.

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