Financial Analysis of Cardiac Rehabilitation and the Impact of COVID-19

Abstract

Purpose:

Provision of phase 2 cardiac rehabilitation (CR) has been directly impacted by the coronavirus disease 19 (COVID-19). Economic analyses to date have not identified the financial implications of pandemic-related changes to CR. The aim of this study was to compare the costs and reimbursements of CR between two time periods: (1) pre-COVID-19 and (2) during the COVID-19 pandemic.

Methods:

Health care costs of providing CR were calculated using a micro-costing approach. Unit costs of CR were based on staff time, consumables, and overhead costs. Reimbursement rates were derived from commercial and public health insurance. The mean cost and reimbursement per participant were calculated. Staff and participant COVID-19 infections were also examined.

Results:

The mean number of CR participants enrolled/month declined during the pandemic (−10%; 33.8±2.0 vs. 30.5±3.2, P=.39), the mean cost/participant increased marginally (+13%; $2,897±$131 vs. $3,265±$149, P=.09), and the mean reimbursement/participant decreased slightly (−4%; $2,959±$224 vs. $2,844±$181, P=.70). However, these differences did not reach statistical significance. The pre-COVID mean operating surplus/participant ($62±$140) eroded into a deficit of -$421±$170/participant during the pandemic. No known COVID-19 infections occurred among the 183 participants and 14 on-site staff members during the pandemic period.

Conclusions:

COVID-19-related safety protocols required CR programs to modify service delivery. Results demonstrate that it was possible to safely maintain this critically important service; however, CR program costs exceeded revenues. The challenge going forward is to optimize CR service delivery to increase participation and achieve financial solvency.

CONDENSED ABSTRACT

The aim of this study was to compare the costs and reimbursement of CR between two time periods: (1) pre-COVID-19 and (2) during the COVID-19 pandemic. Results demonstrate that it was possible to safely maintain this critically important service at our center despite increased costs.

Heart disease, stroke, and related vascular deaths are the leading causes of morbidity and mortality in the US.¹ The burden of cardiovascular disease (CVD) in terms of life-years lost, diminished quality of life, and direct and indirect medical costs is profound. For individuals with CVD, adherence to secondary prevention strategies is critical to halting the progression of CVD, managing risk factors, and improving functional capacity and quality of life. Accordingly, phase 2 cardiac rehabilitation (CR) is an integral component of recommended medical care guidelines for individuals with a qualifying diagnosis.^2–5

The impact of the coronavirus disease 2019 (COVID-19) on access to center-based CR services is unprecedented.⁶ Health care providers are confronted with the challenge of mitigating the risk of COVID-19 transmission while maintaining the delivery of CR services safely and effectively. This mitigation is particularly important among vulnerable populations, such as those with CVD. As the spread of COVID-19 surged in March 2020, CR programs were forced to suspend or severely curtail in-person, center based-services.^7,8 However, as our understanding of how to reduce the risk of transmission of COVID-19 has grown, many CR programs have resumed services, albeit with many modifications.^9,10 The implementation of social distancing and other public health measures (e.g., symptomology screening, contact tracing, and surface cleaning) led to substantial alterations to the delivery of CR programming. Most notably, the time-related demands on CR staff to implement these measures increased and participant density (i.e., the number of participants permitted on-site at the CR facility at any given time) was restricted. The financial impact of changes to CR service delivery, at the programmatic level, has not been examined. The objective of this report was to examine the financial impact of the COVID-19 pandemic on the delivery of CR services. For comparison purposes, a similar financial analysis was done for a period immediately prior to the implementation of pandemic-related changes to service delivery.

METHODS

This study used a retrospective chart review of adults consecutively enrolled in phase 2 CR at the University of Vermont Medical Center (UVMMC), an academic medical center in Burlington, VT,¹¹ in the second halves of two consecutive years--July 1, 2019 through December 31, 2019 (i.e., pre-COVID-19 period) and July 1, 2020 through December 31, 2020 (i.e., during the COVID-19 pandemic). Data from earlier months in the pandemic were not included in this analysis because the CR facility was shut down in March, April, and May 2020, and complete data were not available for June 2020. Participant characteristics and the type and frequency of CR encounters during both time periods were derived from the CR electronic health records; all participant data were de-identified. Reimbursement information was obtained from UVMMC. This study received a determination of exempt status from the University of Vermont Review Board according to US Department of Health and Human Services regulation 45 CFR § 46.104(d)(4). No specific patient consent was obtained as all data were deidentified.

PARTICIPANTS

The CR program, described in more detail elsewhere, parallels most CR programs throughout the US.¹² Briefly, demographic and clinical information were collected from each participant at the initial consultation. Participants who completed the initial consultation in-person also completed a symptom-limited exercise tolerance test with peak aerobic fitness, quantified in estimate metabolic equivalents of task (METs) based on treadmill speed and grade. Each participant received a 0–12 comorbidity score summarizing the presence and severity of four possible constraints on full CR participation: chronic obstructive pulmonary disease, peripheral vascular disease, orthopedic problems, and cerebrovascular accident/stroke. Each comorbid condition was categorized as absent (scored 0), present but not symptomatic during exercise (scored 1), symptomatic during exercise (scored 2), or limited participant exercise (scored 3). Self-reported physical function was assessed using the Medical Outcomes Study Short Form-36 (MOS SF-36) survey (0–100 scale) with 100 representing excellent physical function.¹³ Depressive symptoms were assessed using the Patient Health Questionnaire-9 (PHQ-9) (0–27 scale) with higher numbers indicating more depressive symptoms.¹⁴ Participants could attend a maximum of 36 CR exercise sessions; attendance was based on medical necessity, insurance status, and participant goals, objectives, and personal preference.

Prior to the pandemic, the CR education program included one-hour didactic sessions about stress management, nutrition, weight loss, benefits of exercise, anatomy and physiology, pharmacology of cardiac medications, signals for action, and reversing heart disease. During the pandemic period, all didactic sessions were suspended. Consequently, we relied on informal one-one education from case managers to provide information to participants. Our calculations included both types of education.

To prevent the community spread of the COVID-19 virus, UVMMC adhered to all state¹⁵ and federal¹⁶ public health guidelines and implemented interventions to screen all participants prior to entering the CR facility. Social distancing was mandated during the pandemic period, which reduced the number of participants allowed on-site at the CR facility at any one time.

ECONOMIC ANALYSIS

The CR facility was open 24 hr/wk pre-COVID-19 and 35 hr/wk during the COVID-19 pandemic for phase 2 CR participants. Pre-COVID-19, the facility also operated phase 3 CR during these hours; all costing calculations for phase 2 excluded the additional staff hours for phase 3 services. During the pandemic period, Phase 3 sessions were suspended. Staff that provided these sessions pivoted to the higher demands of phase 2 during the pandemic.

The type and frequency of each service used by each participant enrolled in CR during both time periods was identified. The mean number of services per participant per time period was calculated from existing program data.

The overall mean cost per participant during both time periods was calculated by adjusting top-down calculations with micro-costing values. Top-down costing identifies the total aggregate operating costs for a program and then calculates the mean cost/participant as a proportion of this aggregate.¹⁷ A top-down approach gives the most accurate total costs, as it was linked to clearly specified costs for payroll and other expenses. However, this approach does not provide sufficient detail to examine how COVID-19 affected the program operation. The top-down approach could not capture some staff activities (e.g., cleaning, participant scheduling, and billing). Although each individual activity takes little staff time/day, they become more substantial in aggregate. Therefore, we also calculated operating costs using a micro-costing approach. This approach refers to a detailed, bottom up tracking of all resources utilized to produce each service, identifies the unit costs of those services, and multiplies times their frequency to calculate the cost/participant.¹⁸ To combine the advantages of both approaches, we combined them using a ratio to reconcile their differences.

The unit cost of each CR service was based on the sum of direct and indirect medical costs. The total direct medical cost of each service was identified by summing the costs of all its service components. These included all non-personnel items (e.g., supplies and equipment) and staff time (identified by the CR program clinical lead). The unit cost of staff time/service was calculated by multiplying the weighted mean hourly payroll cost in 2021 dollars (i.e., salary and fringe benefits) for all staff that provided the service by the number of hours needed to produce that service. The hourly rates for staff reflect the cost to UVMMC for each employee; these costs do not represent the amount of money paid directly to the staff. Fringe benefits include all costs incurrent by an employer (i.e., UVMMC’s contributions to employee health insurance and pension, and payroll taxes).

The 2021 cost of each non-personnel item (i.e., supplies and equipment) was identified from Premier Inc.¹⁹ or WB Mason.²⁰ The annual cost/use of each durable equipment was calculated based on its amortized replacement cost (at the recommended 3% real interest rate²¹), estimated life expectancy, and the total number of uses/yr. The direct medical costs also included general program costs, that is the amortized cost of any durable equipment plus supplies used by all staff for all services (e.g., masks and computers), administrative staff salaries (i.e., the office support specialist and practice supervisor), and the annual didactic education program staff salaries (e.g., dietician, psychologist, psychiatrist, registered nurse, and physician). The indirect medical costs (i.e., overhead costs, including rent and utilities) were obtained from UVMMC financial records for fiscal year 2020.

Reimbursements for individual CR services were estimated from commercial insurance, Medicare, and Medicaid reimbursements rates.^22,23

Unit costs and reimbursements were adjusted by the ratio of top-down to bottom-up calculations.

STATISTICAL ANALYSIS

Continuous variables were summarized as mean ± SE; categorical variables were summarized as frequencies (%). Differences between the two time periods were tested using independent t-tests on each period’s six monthly observations. All statistical analyses were performed using StataSE version 15.1 (Stata Statistical Software, StataCorp, LLC).

RESULTS

Baseline participants’ characteristics assessed at entry into CR during the pre-COVID-19 period (n=203) and the COVID-19 pandemic period (n=183) are presented in Table 1. There were no significant differences between the two time periods regarding patient demographics, psycho-social measures, education level, body composition, and cardiorespiratory fitness. A significantly greater percentage of patients enrolling during the pandemic period had a surgical qualifying condition (25% vs 17%, P=.04)

Table 1.

Baseline Characteristics at Entry into Cardiac Rehabilitation

	Total N = 386	Pre-COVID-19 n = 203	COVID-19 n = 183	P Value
Age, yr	67.4 ± 0.6	67.9 ± 0.8	66.9 ± 0.9	.37
Sex, male	278 (72)	146 (72)	134 (73)	.54
Education, yr	14.5 ± 0.1	14.7 ± 0.2	14.2 ± 0.2	.09
Weight, kg	86.7 ± 1.0	86.3 ± 1.4	87.1 ± 1.4	.67
Body mass index, kg/m2	29.7 ± 0.3	29.6 ± 0.4	29.8 ± 0.5	.82
METs	5.9 ± 0.1	6.1 ± 0.2	5.7 ± 0.4	.20
MOS SF36	66.1 ± 2.8	66.2 ± 4.9	66.1 ± 1.9	.90
PHQ-9	4.0 ± 0.2	4.1 ± 0.3	3.9 ± 0.3	.90
Total comorbidities	.5 ± 0.1	.5 ± 0.1	.5 ± 0.3	.90
Surgical qualifying condition	81 (21)	35 (17)	46 (25)	.04

Data are reported as mean±SE or n (%).

The pre-COVID-19 period is July 2019 through December 2019. The COVID-19 period is July 2020 through December 2020.

Abbreviations: METs, metabolic equivalent of task; MOS SF36, Medical Outcomes Study Short Form health survey; PHQ-9, Patient Health Questionnaire-9.

There were no known COVID-19 infections among the 183 participants and 14 on-site staff members during the pandemic period.

UTILIZATION OF CARDIAC REHABILITATION SERVICES

The number of new CR participants enrolled/mo at our CR facility pre-COVID-19 declined, although not statistically significantly, during the pandemic from the previous time period (33.8±2.0 vs. 30.5±3.2, respectively, P=.39). The key CR services for both time periods were recruitment, initial consultation, exercise sessions, and exit consultation. Table 2 shows the number of CR services/participant for both time periods.

Table 2.

Mean Number of Cardiac Rehabilitation Services Per Participant

	Pre-COVID-19	COVID-19	P Value
Recruitment orientation
In-person	0.73 ± 0.04	0.23 ± 0.09	<.01
Telehealth	0.27 ± 0.04	0.77 ± 0.09	<.01
Total	1.00 ± 0.00	1.00 ± 0.00	-
Initial consultation a
In-person, with stress test	0.87 ± 0.02	0.65 ± 0.04	<.001
In-person, with no stress test	0.13 ± 0.02	0.10 ± 0.02	<.001
Telehealth	0.00 ± 0.00	0.25 ± 0.03	-
Total	1.00 ± 0.00	1.00 ± 0.00	-
Exercise sessions
With ECG monitoring	16.68 ± 1.72	18.24 ± 1.46	.51
With no ECG monitoring	2.49 ± 0.26	2.72 ± 0.22	.51
Total	19.17 ± 1.98	20.96 ± 1.68	.51
Exit consultation with stress test a	0.35 ± 0.03	0.26 ± 0.03	<.001
Service plans and reports b	22.09 ± 1.98	23.62 ± 1.68	.57

Data are reported as mean±SE.

The pre-COVID-19 period is July 2019 through December 2019. The COVID-19 period is July 2020 through December 2020.

Abbreviation: ECG, electrocardiogram.

^aProportions based on historical program-level data.

^bThese services include creating individual treatment plans, medical record charting, and follow-up phone calls.

STAFFING, UNIT COSTS, AND REIMBURSEMENT OF CARDIAC REHABILITATION SERVICES

Providers included a medical and associate medical director (both cardiologists), and a nurse practitioner. Physician and nurse practitioner hours constituted 62% and 38%, respectively, of the total weekly provider staff hours. The fringe benefit rate for all staff at UVMMC is 46% (fiscal year 2020). The weighted hourly cost was $249 for physicians and $95 for the nurse practitioner. Seven case managers also worked for this CR program; 43% of the total weekly case manager hours were worked by three registered nurses (RN), 46% by three clinical exercise physiologists, and 11% by a physical therapist. The weighted hourly rate was $65 for the RNs, $44 for the exercise physiologists, and $69 for the physical therapist.

After reconciling calculations, the ratios of top-down to bottom-up costs were 1.1451 in the pre-COVID-19 period and 1.1482 during the pandemic period; the ratios for reimbursement were 1.1558 and 1.1032, respectively; both were close to the target levels of 1.000. We calculated the cost of each service component (i.e., consumables, staff time) for each key CR service for both time periods (Table 3, Supplemental Digital Content 1). The overall unit costs and reimbursement of key CR services/participant by period are shown in Table 3.

Table 3.

Key Cardiac Rehabilitation Service Costs and Reimbursement Per Participant by Time Period

	Pre-COVID-19				COVID-19
	Cost		Reimbursement		Cost		Reimbursement
	Unit	Total	Unit	Total	Unit	Total	Unit	Total
Recruitment orientation
In-person	56	41 ± 2	0	0	57	15 ± 5	0	0
Telehealth	33	9 ± 1	0	0	33	24 ± 3	0	0
Total	52	50 ± 1	0	0	42	39 ± 2	0	0
Initial consultation
In-person, with stress test	159	138 ± 3	630	548 ± 8	160	104 ± 3	601	392 ± 7
In-person, with no stress test	108	14 ± 1a	173	23 ± 1a	109	11 ± 1a	165	16 ± 1a
Telehealth	107	0 ± 0	0	0 ± 0	107	27 ± 1	55	14 ± 0
Total	154	152 ± 0	588	571 ± 0	146	142 ± 0	465	422 ± 0
Exercise sessions
With ECG monitoring	73	1,221 ± 126	119	1,985 ± 205	74	1,346 ± 108	114	2,072 ± 166
With no ECG monitoring	67	166 ± 17	74	184 ± 19	67	183 ± 15	71	192 ± 15
Total	72	1,388 ± 144	114	2,170 ± 244	73	1,529 ± 122	108	2,265 ± 181
Exit consultation with stress test	78	$27 ± 1	630	219 ± 7	79	21 ± 1	601	157 ± 5
Service plans & reports	9	166 ± 13	0	0	11	187 ± 11	0	0
Program costs	n/a	278 ± 15	0	0	n/a	321 ± 34	0	0
Indirect costs	n/a	595 ± 32	0	0	n/a	688 ± 74	0	0
Mean per participant		2,897 ± 131		2,959 ± 224		3,265 ± 149		2,844 ±181

Data are presented as $ and reported as mean±SE.

The pre-COVID-19 period is July 2019 through December 2019. The COVID-19 period is July 2020 through December 2020.

Abbreviation: ECG, electrocardiogram.

Service plans and reports (e.g., medical record charting) constituted 6% of all CR service costs for the pre- and during COVID-19 periods.

^aSE was rounded up to $1.

The total cost/participant was $2,897±$131 pre-COVID-19 and $3,265±$149 during the pandemic, P=.09. The cost/participant during the pandemic increased 13% ($368) compared to the pre-COVID-19 period due to the slight decrease in program census and additional cost of COVID-19-related supplies. The total reimbursement per participant was $2,959±$224 pre-COVID-19 and $2,844±$181 during the pandemic, P=.70. The reimbursement/participant decreased 4% ($115) during the pandemic due to the slight decrease in program census and reduction in stress testing. The overall difference in the operating surplus (reimbursement minus total cost) per participant was $62±$140 (<1%) pre-COVID-19 and −421±$170 (−17%) during the pandemic, P=.053.

DISCUSSION

The COVID-19 pandemic affected the delivery of center-based CR services in unprecedented ways. Adhering to requisite COVID-19-related adjustments in service delivery resulted in a 13% increase in CR service cost/participant and a 4% decrease in reimbursement. To our knowledge, this is the first systematic analysis of the financial implications of delivering CR services during the COVID-19 pandemic.

Reimbursement for CR services provided just enough revenue to cover the cost of services prior to the pandemic (<1% margin). This was likely due, in part, to a grandfathered clause which categorized our CR program as hospital-based and therefore reimbursed more than a physician-based one. During the pandemic, our program experienced a 17% deficit, likely as a result of multiple factors. Firstly, fewer patients were enrolled in CR. Secondly, although we expanded our CR facility hours to accommodate social distancing, overall, fewer patients were allowed onsite at any one time. Thirdly, COVID-19-related safety protocols increased expenses (e.g., additional cleaning supplies, facial coverings, and signage) and time demands on CR staff. Finally, some initial consults (19%) were conducted via telehealth, which is reimbursed at only a third of the rate of in-person visits.

Although the Coronavirus Preparedness and Response Supplemental Appropriations Act²⁷ and American Rescue Plan Act²⁸ directed approximately $100 billion to health care systems to help them remain financially solvent, health care administrators were responsible for deciding how to allocate financial resources. Arguably, directing resources to CR, a highly cost-effective intervention that improves CVD outcomes and decreases re-hospitalizations^29,30 should be prioritized, especially given our demonstration that center-based CR services can be delivered safely as we experienced no known disease transmission among participants and staff. The cardiology department at UVMMC has long recognized the substantial contributions of CR to patient health and continued to support the program accordingly during the pandemic. We recognize that this support may not be universal; the goal of our study was to provide important financial information to assist other centers in making decisions about their CR service delivery.

In the short-term, allocation of federal health care grant money helped offset the financial deficits that resulted from COVID-19-related changes to CR services at UVMMC. In addition, some of the financial loss observed in our study will presumably be mitigated as pandemic-related changes to service delivery recede. For example, by May 31, 2021 we have already observed an increase in CR participation as the number of people vaccinated against COVID-19 has increased. Also, the time and resources that the staff need to dedicate to mitigate COVID-19-related risk has begun to subside. Our program will also begin to generate additional revenue with the re-opening of our phase 3 component, thereby offsetting some of the financial loss associated with CR services during the pandemic. In the years prior to the pandemic, our Phase 3 CR generated approximately $57,000 in annual net revenue (equivalent to adding a surplus of $140/phase 2 participant). However, even with these favorable financial factors, our results also demonstrated that providing CR services prior to the pandemic was financially precarious (i.e., the difference between costs and reimbursement was < 1%). Reforming current payment models, such as increasing reimbursement rates and/or transitioning to value-based payments may help support the longer-term financial viability of CR. The payment structure of value-based models is contingent on health outcomes, using mechanisms such as bundled payments and shared savings, rather than fee-for-service, to reduce hospital costs and improve patient care.³¹ Given the well-established benefits of CR, including reducing the risk of future cardiac events and decreasing hospital readmission rates,^32,33 under value-based payments, CR should be reimbursed higher, so facilities are further encouraged to improve recruitment, access, and enrollment to CR. In addition, given how critical participant-staff interactions are to the success of this intervention, identifying strategies to bill for these interactions, which are not typically reimbursed under current payment structures, is important to both increase program revenue and improve participant health and wellbeing. Indeed, during the pandemic, staff interactions with participants assumed the additional burden of providing all education information and support for participants because all didactic classes were suspended. The fact that CVD increases a person’s risk of hospitalization or death from COVID-19 heightens the importance of delivering CR during the pandemic.^6,34 Transitioning to value-based models would increase the profitability of CR by capturing the financial value of staff interactions.

The slight decrease in CR enrollment observed during the pandemic period was not unexpected. However, even prior to the pandemic, CR services were under-utilized.³⁵ In recent years, new delivery strategies have been proposed to optimize CR participation, which could be highly relevant during a pandemic. One potential strategy to serve more patients effectively is home-based CR (HBCR). In contrast to center-based CR services, HBCR relies on remote monitoring of patients with non-direct exercise supervision and is provided mostly or entirely outside of the traditional center-based setting. Although there is some evidence that HBCR programs may be an appropriate alternative,³⁶ particularly during a pandemic,³⁷ such services are not widely available nor fully reimbursable.³⁸ In general, telehealth services are reimbursed at lower rates than other services. However, lower reimbursement rates may be acceptable for some CR programs that are otherwise not currently getting reimbursed at all. Ultimately, increasing participation in CR necessitates modifications to the existing infrastructure of most CR programs such as changes to service delivery and/or current reimbursement approaches. The financial implications of these changes will need to be explored further in the future.

Out-of-pocket patient expenses were not included in our analysis because calculations were conducted from a healthcare, rather than a societal, perspective. However, we expect that patient-related expenses were minimal for our program and not a deterrent pre- or during the pandemic because parking at our facility is free.

The higher share of patients who have undergone a cardiac procedure during the pandemic may be due to their greater motivation to participate in CR despite a general fear of COVID-19 exposure from healthcare services during the pandemic.^24,25 This explanation is supported by the fact that Medicare patients who had received bypass surgery had more than twice the rate of CR participation of those with a myocardial infarction (31.0 vs 13.9%, respectively).²⁶

This study has several limitations. First, we analyzed the financial impact of COVID-19 at a single CR facility. CR programs differ in location and size as well as the professional make-up of the staff and how and what services are delivered. The University of Vermont Medical Center programming is representative of a high standard of care, as evidenced by our inclusion of the Core Components of CR³⁹ and maintenance of the American Association of Cardiovascular and Pulmonary Rehabilitation Program Certification⁴⁰ status since 2002. However, several programmatic elements at UVMMC may result in more favorable financial outcomes for our CR program than average programs (e.g., high share of non-nursing staff, high rate of exercise tolerance testing, location in a building with other cardiology services). Our detailed cost analysis enables other CR programs to adjust various service cost components to increase the generalizability of our results. Second, although a micro-costing approach provided detailed, service-specific data, some values, such as indirect costs, were not available during the pandemic period and had to be inferred from pre-pandemic data. Therefore, future research should examine if (and by how much) indirect costs changed during the pandemic.

The COVID-19 pandemic has had an unprecedented impact on all aspects the health care system, including CR. Following evidence-based guidelines, CR services can be delivered in a safe and effective manner during a highly contagious pandemic. However, the requisite changes necessitated by the pandemic have negatively impacted the financial bottom line. Whereas, prior to the pandemic, the revenues of the CR program covered all service costs and provided some income for program and staff development; during the pandemic, CR program costs exceeded revenues. Unfavorable operating margins may continue indefinitely, even after the COVID-19 pandemic recedes. The challenge going forward is for CR programs to continue to make modifications and innovate to deliver critical CR services safely and effectively with sustainable financial solvency.