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Analysis

Jefferson Health CEO Talks About Healthcare's 'New Normal' After COVID-19

By Jack O'Brien  
   April 02, 2020

Dr. Stephen Klasko discusses how the Philadelphia-based system has weathered the COVID-19 outbreak and how he expects how healthcare will change going forward.

The coronavirus disease 2019 (COVID-19) outbreak has forced hospital and health system executives to confront unprecedented challenges and has likely ushered in a new era for the broader healthcare industry, according to Dr. Stephen Klasko, CEO of Jefferson Health.

Issues facing provider organizations have been plentiful as COVID-19 has swept across the U.S. in recent weeks, including problems related to medical equipment supply, clinical staff protections, and market volatility diminishing the bottom line, among many others. 

In a conversation with HealthLeaders, Klasko notes these concerns and says that he has taken steps to ensure that Jefferson is meeting the needs of the Philadelphia community it serves, but is also looking ahead to the post-pandemic world and what it will mean for the healthcare industry as a whole.

Related: Jefferson Health CEO Gives Insight on How to Operate As Medicare for All Looms

Klasko says he is most excited about the increased role technology will play, namely wearables and digital health solutions, as providers focus on practicing preventive care rather than 'sick-care.' 

"My passion has been about how we move the predominance of healthcare from the hospital to the home," Klasko says. "If there was a pandemic 30 years ago, everybody would have been lined up at the bank on Friday to cash their check. That's not an issue anymore since 90% of banking happens at home. We think the same thing will happen with health, so our goal is to use this crisis to get people used to [care] happening at home, which will help us in the next crisis."

Below are insights from Klasko about how Jefferson Health is navigating the pandemic and preparing for what he sees as a new future for healthcare.

Coronavirus issues today

Despite the coming clinical challenges such as personal protective equipment (PPE) shortages awaiting Jefferson—the organization currently has about 60 days' worth of it, which is "obviously not enough"—the 14-hospital system based in Philadelphia is well-positioned to handle the financial impact of the coronavirus pandemic, according to Klasko.

He says he estimates that the financial burden on the system will be around $75 million per month but he adds that the system, which reported $6.2 billion in total patient revenue last year, will not have to conduct mass layoffs like smaller community hospitals that have already canceled elective procedures, a major driver of revenue.

Looking ahead, Klasko says he disagrees with the notion that the outbreak will force community hospitals to join large healthcare conglomerates but concedes that those providers might have to form "creative partnerships" with payers to access additional liquidity.

"I think that it will be difficult to just be an independent community provider and not be part of a larger provider system or have partnerships with payers," Klasko says. "[One] thing that Jefferson has been successful at are our creative partnerships, predominantly in Silicon Valley. I think that's another great area for healthcare systems to think about as we move towards digital transformation ... that they're helping to develop and create some of the partnerships with venture capital firms and sharing in the wealth."

Related: How a Pending Jefferson Deal Could Reshape Philadelphia's Healthcare Market

Solutions and innovations

Klasko says he acknowledges that telehealth solutions are having their moment in the midst of the COVID-19 outbreak and expects such digital innovations to continue to drive the mission at Jefferson.

Since the health system's initial investment in telemedicine in 2013, the organization has seen its telehealth visits jump from 100 per day to around 2,500 per day, according to Klasko.

Additionally, the 2017 merger with the Philadelphia University, a design college, has now provided the system with the ability to leverage its engineering capabilities to address issues facing the organization during this crisis. 

Klasko describes this as a multipronged effort involving medicine, design, and textiles that aims to re-sterilize PPE and N95 masks, which have been a scarce commodity for hospitals in recent weeks.

Related: COVID-19 Outbreak Threatens Health Systems With New Financial Challenges

Once the outbreak is more controlled and hospitals can focus on the post-pandemic world, Klasko says "shame on [providers] if it doesn't change," citing the need for better coordination across the spectrum.

"We need to recognize that this will happen again and use this as a very expensive lesson as far as how we can quickly manufacture PPE, have disaster drills in each city, and know what would happen if we ran out of beds," Klasko says. "We have to be ready so it's not a surprise, and I think the goal will be that we're much more prepared for the next one." 

'A new normal'

Klasko says the spread of the virus serves as the nexus moment that provider executives have talked about before, adding that it will create "a new normal."

He says he expects the "most inefficient and most costly parts of the healthcare ecosystem," namely hospitals and insurers, will give way to "more personalized and pre-emptive care" options like genomic sensors and AI digital therapies. 

Additionally, the push for this change in care delivery will not come from payers and providers, Klasko says, but rather from consumers adjusting to new expectations of care though the course of the pandemic. He also says that the crisis might create more support for forces that seek to dramatically reshape the existing healthcare system, including healthcare startups and politicians like Sen. Bernie Sanders (I-VT), who advocates for a 'Medicare-for-All'–style single-payer system.

To compete with the increased threat from nontraditional healthcare players, Klasko says both payers and providers must work to enhance coordination efforts and establish those "creative partnerships" that meet consumer expectations and modernize care.

Related: Hospital Finance Leaders Brace for Operational Issues Related to COVID-19

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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