https://mailchi.mp/edda78bd2a5a/the-weekly-gist-june-23-2023?e=d1e747d2d8

Last week, the nation’s two largest Medicare Advantage insurers revealed that second quarter outpatient volumes were higher than anticipated, prompting a selloff of insurance stocks. 

Minnetonka, MN-based UnitedHealth Group (UHG) executives said at a Goldman Sachs investor conference that increased outpatient utilization was driving up its medical loss ratio (MLR) to the high end of its annual target, surmising that a new wave of seniors were finally accessing elective procedures like joint replacements postponed throughout COVID.

Then, in an investor filling, Louisville, KY-based Humana noted that both outpatient and inpatient utilization levels were elevated, though it did not point to any specific causes. But not all insurers have experienced higher-than-expected utilization: Indianapolis, IN-based Elevance Health reported that its medical spending this year so far was in line with expectations, and it did not expect a surge in procedure demand.

The Gist: Health systems will find this news, especially Humana’s reports of elevated inpatient and emergency department volumes, as encouraging as the insurers consider it alarming. But the bulk of this outpatient volume isn’t necessarily returning to health systems, as the proliferation of insurer- and investor-backed ambulatory surgery centers has resulted in not only more, but also lower-cost, competition. 

Health systems with significant ambulatory surgery center footprints, including Tenet and HCA, should be well-positioned to capture the volume return.