Edward Kim and Kristin Ko, Misalignment between coronavirus financial aid and public health policies: negative incentives for outpatient clinics in the United States (2020)

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A viewpoint by Edward Kim and Kristin Ko in the Journal of Public Health Policy, accepted 3 September 2020, on the misalignment between coronavirus financial aid and public health policies and the negative incentives it created for outpatient clinics in the United States. The abstract says the CARES Act created the Paycheck Protection Program and expanded telemedicine reimbursements, but that its drafters overemphasized maintaining employment and overlooked downstream effects on outpatient clinics, whose administrators face pressure to keep operating without a plan to adopt telemedicine. The authors say the result will be suboptimal clinical practice and increased COVID-19 infection risk for staff and patients, and that policymakers should weigh public health when designing aid. Kim is at Ben Gurion University of the Negev, Ko at Georgetown University.

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Journal of Public Health Policy
https://doi.org/10.1057/s41271-020-00256-9

    VIEWPOINT



Misalignment between coronavirus financial aid and public
health policies: negative incentives for outpatient clinics
in the United States

Edward Kim1          · Kristin Ko2

Accepted: 3 September 2020
© The Author(s) 2020



Abstract
The United States Coronavirus Aid, Relief, and Economic Security Act (CARES
Act) led to creation of the Paycheck Protection Program, as well as an expansion of
reimbursements for telemedicine. CARES Act drafters over emphasized maintaining
employment and overlooked negative downstream effects the policies had on outpa-
tient clinics. The misalignment between this financial aid package and public health
policy is most apparent in the pressure administrators face to maintain clinic opera-
tions, without a transition plan to adopt telemedicine and associated best practices.
If this continues, the result will be suboptimal clinical practices and an increased
risk of COVID-19 infection to both staff and patients. Particularly in times of cri-
sis, financial aid packages should not be evaluated in isolation; policymakers should
consider their implications for public health while designing, enacting, and imple-
menting such measures.

Keywords Coronavirus · COVID-19 · Policy · SARS-CoV2 · Telemedicine


Introduction

The United States (US) Congress enacted the Coronavirus Aid the United States on
27 March 2020 [1]. This law authorized distribution of $349 billion in relief aid to
American workers and small businesses, and the expansion of reimbursement for
telemedicine visits [2]. It also enabled creation of four temporary loan programs,


* Edward Kim
  contact@eddiewkim.com
      Kristin Ko
      kk1126@georgetown.edu
1
      Medical School for International Health, Faculty of Health Sciences, Ben Gurion University
      of the Negev, Be’er Sheva, Israel
2
      Department of Physiology and Biophysics, Georgetown University, Washington, DC, USA


                                                                                    Vol.:(0123456789)
                                                                            E. Kim, K. Ko


managed by the Small Business Administration (SBA), namely the Paycheck Protec-
tion Program (PPP), Economic Injury Disaster Loan and Emergency Advance, SBA
Express Bridge Loans, and SBA Debt Relief [3].
   Many individuals and small businesses experienced significant financial hard-
ship as a result of public health measures to minimize the spread of coronavirus dis-
ease 2019 (COVID-19), including social distancing and stay-at-home orders, [1]. In
just 1 month, the number of unemployed increased from 1.4 to 7.1 million [4]. The
CARES Act is an attempt to offset the economic impact of the federal, state, and
local public health activities to limit COVID-19 transmission. As of 15 April 2020,
the PPP program had disbursed $342 billion USD through 1.6 million loans—with
allocation of 40 billion, or almost 12% of available funding to healthcare and social
assistance organizations [5].
   While the CARES Act helps to mitigate the impact of unprecedented levels of
unemployment and to sustain struggling businesses, it has also changed the financial
incentive structure of outpatient clinics. These incentives may induce poor practice
decisions—such as staffing and operating outpatient clinics without strict adherence
to public health guidelines—and delay recovery efforts by increasing risk of infec-
tion from COVID-19.


Paycheck Protection Program

The Paycheck Protection Program (PPP) is a program of loans distributed by the
US Small Business Administration (SBA) in conjunction with the Department of
the Treasury; it expands the existing 7(a) loan program. It helps businesses to retain
their employees by providing money to cover payroll costs—including vacation,
medical and sick leave—along with rent, mortgage interest, and utilities [6]. Most
importantly, the government will forgive the loan if 75% of the borrowed amount is
allocated to payroll costs, and the number of employees and their levels of compen-
sation are maintained [1].


Financial factors influence staffing decisions in outpatient clinics

Similarly, after an outpatient clinic is approved for a loan, the drafters of the law
expected the practice to maintain its staff and their usual pay. Because the loan does
not specify contingencies for adhering to public health guidelines, it incentivizes
each practice to continue operations with its full, pre-COVID-19 loan staff. In many
states, a clinic is considered an ‘essential business’ that means clinics can continue
operating despite stay-at-home orders [7]. The loans cover costs incurred from 15
February 2020 through 30 June 2020, a period during which there was an expecta-
tion of many new cases of COVID-19 throughout the United States [1]. Although
many governing bodies have prescribed general guidelines on how to operate busi-
nesses during the COVID-19 pandemic, their lack of enforcement allows outpatient
clinics to selectively follow some and disregard others with impunity. This could
Misalignment between coronavirus financial aid and public…


result in a fully staffed office that does not abide by all public health guidelines
[8–12].
   To minimize the financial impact of the economic downturn and the cost of
retaining staff, many clinical practices will continue operating during these times
with inadequate resources and loose adherence to the guidelines [13]. There are two
opposing forces at work, namely: (1) for paid employees to go to their workplaces
to continue to generate revenue for the practice and (2) reduce working hours for the
sake of safe practices.


Telemedicine changes the use of clinical support staff

There has also been a major push for clinicians to adopt telemedicine practices, as
an effective substitute for traditional face-to-face visits in times of a pandemic [14].
As of 6 March 2020 under the CARES Act and the 1135 waiver, the Centers for
Medicare and Medicaid Services (CMS) expanded their telehealth service and reim-
bursement policies [15]. Although the recent reimbursement expansion promotes
adoption of telemedicine at a national level, the widespread lack of experience using
the platform will likely lead to poor rates of adoption and inadequate practices [16].
The gap between the anticipated benefits and actual effectiveness of telemedicine
has undermined efforts to transition [17]. Given these considerations, the program
incentives clinical administrators to shift their approach from availability–to utiliza-
tion of their staff.
   Substantial up-front planning is required to understand the existing issues and
reduce the downstream complexity involved in restructuring workflow [18]. Beyond
learning the technological infrastructure, there are barriers associated with disrupted
workflow. Changes to traditional roles of clinical support staff can be subsumed
under two categories: undefined and changed roles, and alignment with clinical
processes [17]. “Undefined and changed roles” is best understood as a change in
responsibility for a particular task or the assignment of a new one after adopting tel-
emedicine. “Alignment with clinical processes” refers to barriers confronted when
telemedicine does not integrate into nor support existing practices.
   Practicing through telemedicine also entails a range of new liabilities, such as
licensure, billing, privacy, and confidentiality concerns [19, 20]. Without adequate
preparation, telemedicine can force practices to rely on ‘workarounds’ to over-
come systemic shortcomings, increasing the likelihood of poor outcomes [21]. For
instance, introducing new workflow will increase practice owners’ perceived liabili-
ties and may encourage them to maintain current workflow that prevents staff from
working remotely. Additionally, not all diseases can be adequately addressed in a
remote setting [22]. Even practices that have already adopted telemedicine into their
workflow may find the current model unfeasible during an infectious disease out-
break-even subspecialty physicians that serve rural locations work with nurses who
can visit their patients to perform physical examinations [23]. These factors contrib-
ute to the pressure to maintain staff in an office setting, potentially relying on subop-
timal practices, and thus increasing risk of infection to both staff and patients [24].
                                                                          E. Kim, K. Ko


Discussion

The misalignment between this financial aid package and public health pol-
icy is most apparent in the pressure administrators’ face to maintain their pre-
COVID-19 outpatient practice norms, without a transition plan to adopt telemedi-
cine and associated best practices. This disconnect between fiscal and public
health strategies can result in inefficient interventions and limit improving health
outcomes within the United States [25].
   Changing financial incentives can foster behavioral change even in medical
settings [26]. Hence, poor planning and program design by policymakers create
the risk of producing poor outcomes and undermine progress by imposing greater
disease burden on patients who are at the highest risk. Considering that the US
Congress enacted the PPP program and the government implemented it rap-
idly—“14 years’ worth of loans in less than 14 days”—there was insufficient time
to involve all stakeholders in the core discussions and the roll-out strategy [27].
   In retrospect, the CARES Act, specifically the PPP, could have better addressed
the needs of outpatient practices by including two minor provisions that would
ensure employee safety and promote the adoption of telemedicine without unnec-
essarily complicating the program. As it stands, the policy forgives the borrowed
amount if a business strictly adheres to employment requirements.

• Safe working conditions Policymakers should have also required businesses,
  particularly health organizations, to provide safe working conditions for
  employees. That is, businesses should be required, where defined by national,
  state, and local policies, to stipulate that reasonable accommodations be made
  for employees to work from home if safety measures cannot be met. Similar to
  the current policy, any failure to follow such requirements could lead to loan
  repayment.
• Expand ‘rent’ to include telehealth investment In the PPP’s current form, a
  portion of the borrowed amount can be dedicated to covering the cost of rent.
  The rent category could be expanded for medical practices to include invest-
  ments in telehealth infrastructure and services. Just as a clinic’s walls provide
  a setting for the provision of health services, the infrastructure for telehealth
  allows clinicians to provide comparable, while safe, services throughout the
  pandemic.

Considering the PPP was set to expire at the end of June 2020, it is critical to
identify important gaps and limitations to improve future iterations. Overall, the
PPP is limited in the support and improvement it offers the healthcare system
insofar as it addresses employment as both a process and an outcome. Future
policymakers should consider employment as an outcome objective only. Finan-
cial assistance directed towards telemedicine and associated infrastructure should
instead be considered as a process objective. If funding were dedicated to pro-
viding telemedicine, it would allow an office to continue practicing and generat-
ing revenue. This would incentivize administrators to adopt a new delivery model
Misalignment between coronavirus financial aid and public…


better suited to the challenges of COVID-19, and employees could redefine their
roles while continuing to provide value—all while pushing patient care into a
safer setting. This alternative fiscal program aligns the needs and values of all
stakeholders—the general public, patients, clinical administrators, and their staff.



Conclusion

The current lack of enforcement, informal guidelines, and the fact that outpatient
clinics are eligible for loan forgiveness from the PPP program (but lack prior experi-
ence using telemedicine), means that many clinics will continue to be fully staffed,
resulting in an increased risk of exposure to coronavirus for clinicians and patients
alike. This will likely prolong the spread of the virus and make recovery more dif-
ficult. While rapid distribution of financial resources is critical during an economic
downturn, it should not come at the expense of misaligned policies that create incen-
tives that undermine public health.
   The financial impact of COVID-19 is substantial, not only within the United
States but worldwide. As other countries develop similar programs to address eco-
nomic downturn, policymakers should consider the shortcomings of the CARES
Act noted here. Doing so would enable future financial programs to better support
healthcare organizations and patients, particularly in an outpatient setting, and avoid
the negative downstream effects of poor program design.


Compliance with ethical standards

Conflict of interest The author declares that he has no conflicts of interest.

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maps and institutional affiliations.



Edward Kim M.P.H., is a medical student at Medical School for International Health, Faculty of Health
Sciences, Ben Gurion University of the Negev, Be’Er Sheva, Israel.

Kristin Ko M.S., is a graduate student at the Department of Physiology and Biophysics, Georgetown Uni-
versity, Washington DC, USA.


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