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Healthcare Trends during the Pandemic

Healthcare Trends during the Pandemic

We know the pandemic has had a huge impact on the healthcare business and consumption of healthcare, and with second quarter data being reported over these past couple weeks, we can quantify some of the impacts:

  • In reviewing second quarter financial results of the three largest health insurers reporting (UnitedHealth, Cigna and Anthem), it is clear that the pandemic is resulting in lower numbers of visits, procedures and healthcare incidents, which results in healthcare spend being meaningfully lower than normal.  The insurers showed an average of a 13% reduction in total claims cost for the second quarter (April, May and June) as compared to a year ago.  One can assume there are COVID-related healthcare costs in the 2020 numbers which likely added 2-3% costs for these payers.  This implies the pandemic’s impact on “normal” healthcare cost and procedure activity is to reduce it by about 15%. 
  • The largest health system which is a public company, HCS, reported second quarter revenues down 12%
  • HCS numbers give us another interesting insight to the pandemic’s impact.  While inpatient surgeries declined 16% versus 2019, outpatient surgery declined 33% versus last year.  This would seem to indicate medical visits and procedures which are less urgent have declined significantly more than the urgent ones, which is to be expected, but the variation is significant.
  • All three of the insurers saw a decrease in the number of people insured in their commercial (group and individual health) plans.  FamiliesUSA reported that 5.4 million Americans have lost their insurance coverage during the pandemic.  Comparatively, during the financial collapse of 2008/2009, 3.9 million people lost health insurance.  As a result of these recent losses, eight states have more than 20% of their populations now uninsured.  About two-thirds of Americans had been covered by employer sponsored group health plans or individual health plans.  The 5.4 million person net loss of coverage is less than 3% of those insured in non-governmental health markets.  Additional job losses, which continue, as well as lags in dropping people from coverage will likely exacerbate this uninsured problem at least through the end of the year.
  • Telehealth is emerging as a major trend in the pandemic and likely to continue.  A staggering 44% of primary care physician visits in April, by Medicare beneficiaries, took place via telehealth, that according to HHS.  These rates of telehealth appear to be settling out closer to 20% today.  Urban consumers are more likely to use telehealth than rural consumers.  A UPenn study found that at least two-thirds of healthcare consumers were just fine with telehealth visits as a substitute for in-person visits, indicating to me this will be a permanent shift.

The pandemic is altering healthcare in many ways, some temporary and some permanent.  I will continue to watch the trends and provide updates.

1 comment

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Kyle Walker | Jul 31st 2020 @ 6:51 AM

Thanks for the insight Mike. Very interested where the next 2-5 years will go in the delivery of health care services.

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