The U.S. may have entered into a new phase of the COVID-19 pandemic, but the public health crisis is far from over. The nation’s hospitals and health systems will likely be dealing with its after effects for decades, according to new findings from Fitch Ratings.
Specifically, health implications related to the coronavirus will drive elevated health system utilization long after the acute phase of the pandemic has ended, likely leading to increasing costs and higher insurance premiums for years to come.
These costs will emerge from the necessary addition to outpatient capacity to deal with the ongoing treatment of chronic conditions related to what may be permanent damage caused by the virus.
WHAT’S THE IMPACT?
It’s nigh impossible to determine the magnitude of these effects, said Fitch. It will be dependent on tangential health issues related to deferred diagnostic testing and treatment during the pandemic. Since related conditions are likely to develop over time, Fitch doesn’t anticipate these issues to directly affect the credit profile of issuers in the U.S. healthcare system.
In the near term, health insurers have been able to incorporate expanding COVID-19 claims data, estimates of infection trends and pent-up demand for previously deferred care into 2021 premium rates, which should benefit cost management and pricing this year and next.
However, for healthcare providers, the expansion of the healthcare system over the long term will likely exacerbate traditional pressures on operating performance, such as tight labor and wage markets for experienced staff, rising pharmaceutical expenses and supply costs in general.
Although the U.S. has glimpsed signs of the pandemic’s potential end over the past couple of months, the ultimate story of the pandemic is still being told.
The infection rate is once again trending up, presumably due to a combination of factors, including a dramatic reduction in demand for new vaccinations, the rapid spread of the more infectious Delta variant and the reduction in mitigation measures.
THE LARGER TREND
The rising numbers of COVID-19 infections in the U.S. are occurring mostly in communities with low rates of vaccinations, with Centers for Disease Control and Prevention Director Dr. Rochelle Walensky saying in July that “This is becoming a pandemic of the unvaccinated.”
Data published by USA Today shows that cases are rising in all 50 states, with some startling increases in certain areas. Rhode Island, for example, saw cases almost triple in a one-week period, with Maine and Vermont following closely behind. Massachusetts, Alaska and Kentucky have seen their cases more than double in that time, followed by Minnesota, Florida and Texas.
Cases are rising fastest in Arkansas, Florida, Missouri and Nevada, all of which have low vaccination rates, according to Market Watch. In all four of those states, less than half of residents are fully vaccinated.
Vaccine hesitancy remains a problem, with many Americans reluctant to get their shots or unwilling to do so. In May, a Sermo poll showed that more than 72% of physicians surveyed said that patients continue to voice concerns over vaccine side effects.
Still others have reported ongoing misinformation discouraging people from getting vaccines. And close to 30% of physicians reported encountering patients who have skipped their second dose due to unpleasant side effects from the first dose, or concerns over side effects.