Insurer projections, ‘rolling hotspots’ and vaccines get Advisory Board attention

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COVID-19 has represented a windfall for insurers, but there’s much uncertainty going forward over utilization, according to the Advisory Board.

The larger, national insurers and Blues plans are in a better position than the smaller insurers in large part due to their Medicare Advantage markets, according to Ford Koles, executive director Advisory Board and Christopher Kerns, executive director, Research, in a Thursday broadcast. 

Currently, due to COVID-19 and its effect on employment, the greater the percentage of business in the employer market, the more subject these companies are to near-term revenue challenges going forward into 2021.

The bigger insurers, such as United Healthcare, are the ones more likely to have invested in Medicare Advantage and there is now a greater focus on  marketing the MA plans. 

Their valuations are likely to stay strong, said the Advisory Board, while some of the regional plans without an MA focus will face some headwinds in 2021.

Aggressive growth in MA plans is expected. 

Individuals who have lost their employer insurance along with their jobs are likely to have gone on COBRA or their spouse’s plan. Only a sliver is expected to go to the Affordable Care Act exchanges for their health insurance.

As physicians practices have suffered financially due to the pandemic, insurers are advancing strategic alignments with them to keep them whole. 

Health systems will also be opportunistic in capturing physician groups, the Advisory Board said.

There’s been a sky-is-falling panic that doctors are going to go out of business due to the pandemic, but quite a few structures have emerged to prop up physician practices such as funds from the CARES Act, the loosening of telehealth restrictions, an increase in primary care physician pay from CMS and voluntary furloughs. 

One interesting development is the increase in remote monitoring technology for chronic diseases.

This does not mean a primary care shortage is not going to happen. Physicians are likely to take early retirement if the financial supports fall away.

ROLLING HOTSPOTS

The biggest issue for a lot of providers early on was liquidity, Kerns said. If it weren’t for the quick actions of the federal government and Congress to provide grants and loans, providers would have had a lot more difficulty.

Now there may be a public relations issue with the repayment of accelerated and advance loans. With patient volumes not returning to pre-pandemic levels, some providers are hoping the loans will be forgiven and turned into grants. 

It does not look like that’s going to happen because of the effect that would have on depleting the Medicare Trust Fund. The accelerated payments and the 20{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} add-on payment for COVID-19 patients further depleted the fund.

Not all providers are convinced they will need financing in light of a second wave of the pandemic, the Advisory Board said.

CEOs have had questions about “rolling hotspots” for COVID-19 and whether this is the new norm.

Overall, the number of cases is trending downward, along with death rates. There’s also been a decrease in  bed utilization in recent weeks.

But without a vaccine, the country is likely to experience “rolling hotspots,” where there are increases in COVID-19 cases by market, township or statewide.

More cases are being seen in the Midwest and Great Plain States. Overall, New York and New Jersey still have the highest number of cases in the country, along with some of the Sunbelt states.

Children make up a small number of hospitalizations but children under 5 are shown to carry a higher viral load than adults.

A VACCINE  

While a vaccine may be ready by early 2021, Centers for Disease Control and Prevention Director Robert Redfield told a Senate subcommittee on September 16 that due to limited supply, most Americans would likely not receive the vaccine until the late second quarter or third quarter of 2021.

There’s also a public unwillingness to get a vaccine.  The issue is tied to politics, with fears among Democrats that a vaccine might be rushed.

Then there’s the supply chain complexity. Some vaccines in development require cold chain distribution, which could create a bottleneck for distribution.

Drug-makers Moderna and Pfizer have relatively new technologies and have announced they are enlarging their phase 3 trials and are on track to have preliminary results to know whether the vaccines work, by the end of October. 

AstraZeneca, which paused its trials due to one volunteer getting sick, is again back on track for Phase 3, at least in the United Kingdom. The trial is still paused in the United States.

COVID AND FLU SEASON

Kerns said there is no indication yet how COVID-19 would impact the flu season. Most epidemiologists believe there will be a lower than average flu season due to changes in behaviors such as increased hand washing and social distancing.

But as temperatures start to fall, it will drive a lot of people inside and that’s ripe grounds for transmitting COVID-19, he said.

Twitter: @SusanJMorse
Email the writer: [email protected]

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