Insurers should help stabilize health care market
COVID-19 has made this a dangerous and difficult year to work in health care. Unless you are an insurance company. While front-line workers such as physicians and nurses stress over job security and the financial stability of their practices or hospitals, health insurers have reaped record profits.
The New York Times recently highlighted some of the more eyepopping second-quarter earnings from major insurance companies:
UnitedHealth rose from $3.4 billion in the second quarter of 2019 to $6.7 billion during the same period this year.
Anthem increased from $1.1 billion in the second quarter of 2019 to $2.3 billion in 2020.
CVS Health, which owns Aetna, surged from $2 billion in 2019 to $3 billion in 2020.
Most of the profit came from the monthslong postponement of elective procedures in the spring, when mandated stay-at-home orders were needed to slow the spread of COVID19.
While health care’s “middleman” benefited from COVID-19 shutdowns, those providing direct care to patients (hospitals and private practices) suffered mightily.
Andy Carter, CEO of the Hospital & Healthsystem Association of Pennsylvania (HAP), told the USA Today Network that the cost of preparing hospitals to respond to COVID-19 “left a permanent scar on the financial stability of hospitals.” HAP projects that Pennsylvania’s hospitals will lose $10.2 billion from the pandemic.
Independent medical practices fared just as poorly. A national survey conducted in early April found that 48 percent of practices permanently laid off staff. Merritt Hawkins, a national physician recruiter/staffing firm, found an increase in the number of physicians seeking employment while demand for physicians dropped by 30 percent.
Letting practices and hospitals fail does a disservice to the patients whom both doctors and insurers serve. Communities that lose practices and hospitals will see reduced access to care for patients, leading to less competition, and ultimately increased health care prices and lower overall quality.
While insurers are under no obligation, one has to wonder if they can do more to stabilize a collapsing health care market. It is a question being asked by the House Energy and Commerce Committee, which recently launched an investigation into insurers’ profitability amid the pandemic.
As president of the Pennsylvania Medical Society, I urge insurers to use their powers to ease administrative burdens on hospitals and practices. Two areas to start include telemedicine and prior authorization.
Telemedicine. After Gov. Tom Wolf vetoed legislation this spring, insurers are still not required by law in Pennsylvania to reimburse for telemedicine. While many insurers have loosened those requirements during the pandemic, most still reimburse doctors less for telemedicine visits than they do for in-person care.
Prior authorization. This is when insurance companies “approve” or “deny” payment of a proposed treatment or medication. The increased use of prior authorization in recent years has delayed care and increased the time doctors and their staff spend away from patients.
While some insurers have removed prior authorization requirements for COVID-19 patients, more needs to be done to streamline the process and improve transparency for other ailments. The state insurance lobby continues to oppose legislative attempts to reform the system — the latest being House Bill 1194, sponsored by Rep. Steven Mentzer, R-Lititz.
Pledges by insurers to reform the prior authorization process at the national level have also been largely met with inaction.
No one benefits from instability in our health system. We must all do our part to ensure we survive the aftershocks from COVID-19, and megainsurers are no different.