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.
We’re a year into the coronavirus pandemic, so the math that undergirds its risks should by now be familiar. We all should know, for example, that the ability of the virus to spread depends on it being able to find a host, someone who is not protected against infection. If you have a group of 10 people, one of whom is infected and nine of whom are immune to the virus, it’s not going to be able to spread anywhere.
That calculus is well known, but there is still some uncertainty at play. To achieve herd immunity — the state where the population of immune people is dense enough to stamp out new infections — how many people need to be protected against the virus? And how good is natural immunity, resistance to infection built through exposure to the virus and contracting covid-19, the disease it causes?
The safe way to increase the number of immune people, thereby probably protecting everyone by limiting the ability of the virus to spread, is through vaccination. More vaccinated people means fewer new infections and fewer infections needed to get close to herd immunity. The closer we get to herd immunity, the safer people are who can’t get vaccinated, such as young children (at least for now).
The challenge the world faces is that the rollout of vaccines has been slow, relatively speaking. The coronavirus vaccines were developed at a lightning pace, but many parts of the world are still waiting for supplies sufficient to broadly immunize their populations. In the United States, the challenge is different: About a quarter of adult Americans say they aren’t planning on getting vaccinated against the virus, according to Economist-YouGov polling released last week.
That’s problematic in part because it means we’re less likely to get to herd immunity without millions more Americans becoming infected. Again, it’s not clear how effective natural immunity will be over the long term as new variants of the virus emerge. So we might continue to see tens of thousands of new infections each day, keeping the population at risk broadly by delaying herd immunity and continuing to add to the pandemic’s death toll in this country.
But we also see from the Economist-YouGov poll the same thing we saw in Gallup polling earlier this month: The people who are least interested in being vaccinated are also the people who are least likely to be concerned about the virus and to take other steps aimed at preventing it from spreading.
In the Economist-YouGov poll, nearly three-quarters of those who say they don’t plan on being vaccinated when they’re eligible also say they’re not too or not at all worried about the virus.
That makes some perverse sense: If you don’t see the virus as a risk, you won’t see the need to get vaccinated. Unfortunately, it also means you’re going to be less likely to do things like wear a mask in public.
Or you might be more likely to view as unnecessary precautions such as avoiding close-quarter contact with friends and family or traveling out of state.
About a quarter of adults hold the view that they won’t be vaccinated when eligible. That’s equivalent to about 64 million Americans.
Who are they? As prior polls have shown, they’re disproportionately political conservatives. At the outset of the pandemic, there was concern that vaccine skepticism would heavily be centered in non-White populations. At the moment, though, the rate of skepticism among those who say they voted for Donald Trump in 2020 and among Republicans is substantially higher than skepticism overall.
That shows up in another way in the Economist poll. Respondents were asked whose medical advice they trusted. Among those who say they don’t plan to get the vaccine, half say they trust Trump’s advice a lot or somewhat — far more than the advice of the Centers for Disease Control and Prevention or the country’s top infectious-disease expert Anthony S. Fauci.
If we look only at Republican skeptics, the difference is much larger: Half of Republican skeptics say they have a lot of trust in Trump’s medical advice.
The irony, of course, is that Trump sees the vaccine as his positive legacy on the pandemic. He’s eager to seize credit for vaccine development and has — sporadically — advocated for Americans to get the vaccine. (He got it himself while still president, without advertising that fact.) It’s his supporters, though, who are most hostile to the idea.
Trump bears most of the responsibility for that, too. Over the course of 2020, worried about reelection, he undercut containment efforts and downplayed the danger of the virus. He undermined experts such as Fauci largely out of concern that continuing to limit economic activity would erode his main argument for his reelection. Over and over, he insisted that the virus was going away without the vaccine, that it was not terribly dangerous and that America should just go about its business as usual — and his supporters heard that message.
They’re still listening to it, as the Economist poll shows. One result may be that the United States doesn’t reach herd immunity through vaccinations and, instead, some large chunk of those tens of millions of skeptics end up being exposed to the virus. Some of them will die. Some may risk repeat infections from new variants against which a vaccine offers better protection. Some of those unable to get vaccinated may also become sick from the virus because we haven’t achieved herd immunity, suffering long-term complications from covid-19.
Trump wants his legacy to be the rollout of the vaccine. His legacy will also probably include fostering skepticism about the vaccine that limits its utility in containing the pandemic.