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Old 04-02-2020, 09:41 AM
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Default COVID-19 related utilization drops and lower heathcare costs?

I work with a lot of national realtime data, and as such, have access to complete hospital data from all payers across many states. Looking at the last 3 weeks, I'm seeing dramatic drops in ED visits, inpatient stays (with exception of ICU which is increasing and maternity which is staying flat). I'm also hearing in the news that hospitals are canceling all elective surgeries, and closing entire hospital wards. Some hospitals are experiencing their lowest census levels in years.

My question for the group - are health insurers going to come out ahead as the public avoids the hospital at all costs? Have any of you projected net impacts?

I'm also hearing there is a dramatic increase in telehealth, but given the low cost, this can't offset hospital visits in terms of cost. I'm assuming the broadscale telehealth adoption will also mean lower healthcare costs long after COVID-19.

Thoughts?
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Old 04-02-2020, 11:11 AM
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All those "elective" surgeries are gonna happen eventually.
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Old 04-02-2020, 11:42 AM
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Impossible to tell at this point, as it is very sensitive to when COVID peaks, if it recurs, and how many elective procedures are rescheduled for later in the year (or next year). One scenario we've been kicking around is that we come out ahead in Q2 due to all the cancellations but then get slammed the rest of the year due to a lot of those elective procedures just being rescheduled, continued flare-ups of COVID, possible follow-up care for COVID recoverers with lung damage, and lower population health due to folks with chronic and/or MH/SUD conditions losing continuity of maintenance care. Not to mention the havoc this could play on 2020 ACA risk adjustment (and 2021 Med Advantage risk adjustment).

Also not clear how rapid adoption of telehealth is going to play out in the long run. FFS Medicare, for instance, is paying telehealth claims according to the standard fee schedule. Providers will be (and already are) hurting financially and will need to recoup lost/lower revenues somehow.
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Old 04-02-2020, 11:48 AM
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Very possible. I'm expecting a drop in March and into early April, an increase overall, and that a bunch of the non-essential stuff is just delayed and happens later. I'm advising our employer clients that we're in wait and see mode, but in the meantime to prepare a slight overall uptick on average, and that since COVID seems to have outbreak clusters, it'll be highly variable by group and many of them may have decreases in claims.
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Old 04-02-2020, 11:56 AM
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Quote:
Originally Posted by Dr T Non-Fan View Post
All those "elective" surgeries are gonna happen eventually.
Disagree with this... Many of them will just be rescheduled, but some percentage will never happen. I did a lot of work with UM programs for reducing underutilization of orthopedic surgeries, and heard multiple times things like, "we need to operate quickly before the patient gets better." Just that for many surgeries, in time, they'll recover without the surgery.

Thanks for all the addition comments here, very helpful!
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Old 04-06-2020, 11:18 AM
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I think that Q2 is going to look really good for health insurers (especially those with higher commercial/less medicare population). Its going to be a complete shitstorm when earnings are released in July and the big ones show A LOT of profit.

As far as a utilization rush in Q3/Q4, there will be some, but not exactly sure how large. People are going to be timid for a while to go into a Dr office for anything after this. And practices can only see so many patients or preform so many surgeries in a day, so I tend to think while there will be a util rush, it won't nearly cover the amount of services that we cancelled.
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Old 04-06-2020, 11:27 AM
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Secondhand story, but a friend of a friend owns a orthopedic practice. He had to take out a multiple million dollar loan to pay the bills because he basically has no revenue coming in for the last couple weeks and into the foreseeable future.
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Old 04-06-2020, 01:18 PM
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Secondhand story, but a friend of a friend owns a orthopedic practice. He had to take out a multiple million dollar loan to pay the bills because he basically has no revenue coming in for the last couple weeks and into the foreseeable future.
This will be spun somehow into the insurance co's fault in a few months
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Old 04-06-2020, 01:33 PM
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Quote:
Originally Posted by greenman View Post
Secondhand story, but a friend of a friend owns a orthopedic practice. He had to take out a multiple million dollar loan to pay the bills because he basically has no revenue coming in for the last couple weeks and into the foreseeable future.
Sort of related, though I don't know this provider's payer mix...

CMS announced recently that 1) sequestration is going away through the end of CY20, and 2) CMS will pay you a lump sum equal to your Medicare payments in the last 90 days, basically. Now (2) isn't free money, it will be held back from future payments, but it might help bridge the cash flow crunch for some providers. Providers have to request the money, and specifically mention COVID as the reason for the request.
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Old 04-06-2020, 01:51 PM
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Folks are driving less which equals fewer car accidents which should reduce costs for P&C insurers but I don’t know under your system how the related medical costs flow through, if at all, to your health insurance system?

In Canada, hospitals have freed up additional rooms for COVID-19 cases as a result of the reduced car accidents, but the deferral of elective surgeries has been a much bigger source of additional rooms.
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