A year later, consumer confidence is returning

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After a rollercoaster year of living with COVID-19, consumer confidence has returned—and remained largely stable during the winter surge of the pandemic, according to the latest data from a Healthgrades’ consumer attitudes and behavior survey.

The graphic above depicts Healthgrades’ “Consumer Comfort Index”, a measure based on survey questions that assess comfort in specific healthcare settings (e.g., visiting your primary care doctor) and “everyday activities” (e.g., going grocery shopping or dining inside a restaurant). The index reveals that consumers continue to feel more comfortable with in-person medical-related activities than most everyday activities, with 65 percent now feeling comfortable in healthcare settings—up from 40 percent last April. There are, however, some obvious “everyday” outliers: for example, people still feel more comfortable going to the grocery store than getting an in-office medical procedure.

A second survey, by Jarrard Phillips Cate & Hancock and Public Opinion Strategies, finds consumers are much more willing to seek in-person medical care in the next six months as compared to last summer. Health systems and physicians should leverage this return of consumer confidence to reach out to patients who have delayed or missed screenings and other important care across the past year.

Providence posts $306M loss in 2020 after patient revenue takes hit from COVID-19

Providence posts $306M loss in 2020 after patient revenue takes hit from  COVID-19 | FierceHealthcare

Providence Health posted a $306 million operating loss for 2020 as the system’s patient service revenue declined by nearly $1 billion due to COVID-19.

Providence struggled with a major decline in patient volumes, which were down 9% compared to 2019 and led to a 5% decline in net patient service revenue.

While volumes have recovered since an initial decline at the onset of the pandemic, “operational recovery continues to be variable and market-specific as the pandemic continues across our footprint,” the 51-hospital system said in its earnings report released late Monday.

Providence generated $25.6 billion in operating revenue in 2020, slightly above the $25 billion that it generated the year before. However, Providence’s expenses shot up to $25.9 billion, a major spike from the $24.8 billion it paid for in 2019. This led to an operating deficit of $306 million.

A major reason was the system’s response to the COVID-19 pandemic, which Providence got a jump start on as it was the first U.S. hospital system to treat a patient with the virus.

“The impact included a significant reduction in revenue, coupled with an increase in costs incurred for [personal protective equipment] and pharmaceuticals, and increases in labor costs for staffing to serve those impacted by the virus,” Providence’s report said.

Net patient service revenue was $19 billion for 2020, down by nearly $1 billion from the $19.9 billion it posted in 2019.

Providence’s non-operating income totaled $1 billion in 2020 compared to $1.1 billion the previous year. The non-operating income, which is made up of investment gains, helped to “recoup operating losses resulting from the pandemic and offset reimbursement shortfalls from Medicaid and Medicare coverage, allowing us to serve vulnerable populations while balancing our financial standing,” the report said.

Providence’s operating earnings before interest, depreciation and amortization (EBITDA) was $1.1 billion, or 4.4% of its operating revenues. This was a decline from the $1.6 billion (6.2%) in EBITDA for 2019.

The system also got $957 million in relief funding under the CARES Act, which partly offset the losses from lower volumes, the report said.

Providence is an outlier among other larger for and not-for-profit systems that ended 2020 in the black. For instance, Mayo Clinic posted a net operating income of $728 million, helped by $587 million in donations and a massive increase in business from its lab division to help provide COVID-19 tests.

University of Pittsburgh Medical Center also posted a $1 billion profit for 2020 thanks to a boost of enrollment in its insurance business.

The pandemic brought a “double whammy” to pediatric volumes

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Sick Little Girl In Hospital Bed Stock Photo, Picture And Royalty Free  Image. Image 30227571.

Even as surgery and office visit volume rebounds, hospitals across the country continue to report that emergency department volume remains persistently depressed, down 10 to 20 percent compared to before the pandemic. The shift is even more drastic in pediatrics, with some pediatric hospitals and programs reporting that emergency care volume is seeing double the rate of decline.

Pediatric volume has been hit with a “double whammy”with many schools and day cares still closed, contagious illnesses have plummeted. Fewer kids in youth sports means fewer injuries. And unlike adult hospitals, pediatric facilities haven’t filled their beds with COVID patients. “Of all our services, pediatric hospitalists have taken the greatest hit,” one children’s hospital physician leader shared. “Their service is usually full this time of the year with flu and RSV [respiratory syncytial virus]. But with kids not interacting with each other, general pediatric admissions have cratered.” Empty EDs have led some pediatric hospitals to shutter adjacent urgent care clinics: “It doesn’t make sense to operate an empty ED and an empty after-hours clinic”.

For patients, however, this can bring unexpected financial consequences, as they’ll now get an ED bill for services they would formerly have received in urgent care. But while pediatric hospitals have taken a greater volume hit, they’re also likely to see a faster rebound. Once kids are back to school and sports, the usual illnesses and injuries will likely return, and we’d guess parents won’t hesitate to seek care.

Hospital admissions not linked to COVID-19 fell dramatically in fall, especially in Midwest

Dive Brief:

  • As COVID-19 cases surged last fall, non-COVID-19 hospital admissions fell substantially, particularly in the Midwest and West, according to a new analysis by the Kaiser Family Foundation of 2020 inpatient admission data from electronic medical records through Dec. 5.
  • The analysis also highlights admission trends by age and sex, and found that patients 65 and over — those most at risk of complications from the novel coronavirus  —  delayed care at greater rates than those under 65 again in the fall. Still, the discrepancy between visits based on age was more pronounced in the spring.
  • On average, males and females had almost identical admission patterns throughout the entire year. Though looking at the raw numbers, women’s total admissions trended above their male counterparts, which researchers attributed to childbirth.

Dive Insight:

The latest analysis from the think tank provides a fuller picture of how the COVID-19 pandemic influenced admission trends throughout 2020.

Overall, total admissions bottomed out in April and March but have remained near normal, or above 90% of expected admissions since June, according to electronic medical record data from the Epic Health Research Network, which pools information from 20 million patients across 97 hospitals in the U.S.

However, while total admissions — which includes those sick with COVID-19 — remained near normal, the pattern differed when zeroing in on non-COVID-19 admissions, or those admitted who did not have the virus.

Non-COVID-19 admissions started to fall again in November and by Dec. 5 they fell to 80% of expected volume, which is likely to put financial pressure on hospitals, particularly those with smaller reserves of cash on hand, Kaiser noted.

The decline was steepest in the Midwest and West, dropping to about 76% of expected volume between early November and December.

Researchers fear the drop in non-COVD-19 admissions may have long-term consequences.

“The levels of non-COVID-19 admissions seen in the fall of 2020 suggest that people may be delaying care in ways that could be harmful to their long-term health,” according to the study.

Insurers observed similar patterns of depressed volume in the fourth quarter.

Humana, which largely covers seniors in Medicare plans, noted non-COVID-19 volume dropped the last two months of the quarter after previously returning to near normal. It led Humana to report a loss in the fourth quarter as COVID-19 testing and treatment accelerated. Centene, which reported a Q4 loss, echoed a similar pattern.

One-third of US adults postponed care during pandemic: reports

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Dive Brief:

  • About 36% of nonelderly adults and 29% of children in the U.S. have delayed or foregone care because of concerns of being exposed to COVID-19 or providers limiting services due to the pandemic, according to new reports from the Urban Institute and Robert Wood Johnson Foundation.
  • Of those who put off care, more than three-quarters had one or more chronic health conditions and one in three said the result of not getting treatment was worsening health or limiting their ability to work and perform regular daily activities, the research based on polling in September showed.
  • However, the types of care being delayed are fairly routine. Among those surveyed, 25% put off dental care, while 21% put off checkups and 16% put off screenings or medical tests.

Dive Insight:

The early days of the pandemic saw widespread halts in non-emergency care, with big hits to provider finances. 

In recent months, health systems have emphasized the services can be provided in hospitals and doctors offices safely as long as certain protocols are followed, and at least some research has backed them up. Groups like the American Hospital Association have launched ad campaigns urging people to return for preventive and routine care as well as emergencies.

But patients are apparently still wary, according to the findings based on surveys of about 4,000 adults conducted in September.

The research shows another facet of the systemic inequities harshly spotlighted by the pandemic. People of color are more likely to put off care than other groups. While 34% of Whites said they put off care, that percentage rose to 40% among Blacks and 36% among Latinos.

Income also played a role, as 37% of those with household incomes at or below 250% of the poverty level put off care, compared to 25% of those with incomes above that threshold.

Putting off care has had an impact industrywide, as the normally robust healthcare sector lost 30,000 jobs in January. Molina Healthcare warned last week that utilization will remain depressed for the foreseeable future.

Younger Americans were also impacted, with nearly 30% of parents saying they delayed at least one type of care for their children, while 16% delayed multiple types of care. As with adults, dental care was the most common procedure that was put off, followed by checkups or other preventative healthcare screenings.

The researchers recommended improving communications among providers and patients.

“Patients must be reassured that providers’ safety precautions follow public health guidelines, and that these precautions effectively prevent transmission in offices, clinics, and hospitals,” they wrote. “More data showing healthcare settings are not common sources of transmission and better communication with the public to promote the importance of seeking needed and routine care are also needed.”

Molina expects utilization to remain depressed in 2021

https://www.healthcaredive.com/news/molina-expects-utilization-to-remain-depressed-in-2021/594895/

Dive Brief:

  • Molina’s net income fell sharply in the fourth quarter as the insurer was forced to refund rates to some of its state partners as COVID-19 continues to depress normal care utilization, CEO Joe Zubretsky told investors Thursday.
  • Although utilization remained curtailed, COVID-19 costs were higher in the fourth quarter than any other quarter in 2020, Zubretsky said. As such, Molina’s medical care ratio for the quarter increased to 90.8% from 86% the prior-year period.
  • Still, Molina remained in the black for the full year of 2020. Looking ahead, the company expects utilization to improve, though does not expect it to rebound entirely. At the same time, the company expects direct COVID-19 costs to come in lower than last year.

Dive Insight:

Insurers have largely remained unbruised from the pandemic, unlike some providers, but the fourth quarter was a different story.

The pandemic took a bite out of Molina’s net income in the fourth quarter as the company reported that figure fell to $34 million from $168 million in Q4 2019.

The biggest contributor to the impact on the bottom line was Medicaid refunds to states, including California, Michigan and Ohio. States have clawed back some of the money they pay insurers like Molina as members continue to defer care, which is a benefit to insurers as they then pay out less.

Molina painted a clearer picture of this scenario during Thursday’s conference call with investors.

For the full year, Molina estimated that medical cost suppression amounted to $620 million while direct COVID-19 costs amounted to $200 million. In other words, curbed utilization continued to outweigh direct COVID-19 costs, resulting in a $420 million benefit from the pandemic, which the company characterized as a surplus.

But states took back a total of $565 million through rate refunds. Overall, the net impact of COVID-19 was a $180 million hit to Molina for 2020 when factoring in other costs.

Looking ahead, executives seemed cautiously optimistic for 2021 but noted headwinds from the pandemic will persist. While the forecast reflects future growth, Zubretsky said, “it is a constrained picture” of the company’s potential earnings.

Some of those headwinds include Medicare risk scores that don’t fully capture the acuity of their Medicare members. As seniors put off care in 2020, companies like Molina were unable to capture diagnosis codes to help them determine how sick members are and the ultimate risk they pose.

Still, there are some bright spots. As the public health emergency is likely to be continued throughout the remainder of the year, it means that redeterminations will remain halted, or, in other words, Medicaid members will not be kicked off coverage.

This was a boon for Molina in 2020, as it allowed them to pick up a significant number of new members. Overall, it was a major catalyst for Medicaid membership growth in 2020, Zubretsky said.

Molina expects care utilization to improve this year but not fully return to normal. Instead, it expects utilization suppression to be about one third of 2020 levels.

Molina, which solely focuses its portfolio on government sponsored and marketplace plans, said it expects to pick up as many as 30,000 additional members during the Affordable Care Act special enrollment period.

Opening up a special enrollment period was one of the first moves made by the new administration in the White House. Zubretsky seems enthused by the recent moves through executive orders and the unfolding bill developments in Congress that are looking to raise premium subsidies on the exchanges.

Those early actions “just couldn’t be better for government sponsored managed care, and we’re pleased to see that progress already being made,” Zubretsky said.

Tenet posts 3rd consecutive quarter of volume growth

https://www.healthcaredive.com/news/tenet-posts-3rd-consecutive-quarter-of-volume-growth/566597/

Dive Brief:

  • Shares of hospital chain Tenet Healthcare rose more than 3% Tuesday morning after reporting its third quarter results Monday evening showing broad-based volume growth.
  • Comparing hospital-to-hospital performance, Tenet reported a 3.6% increase in admissions and a slight uptick for inpatient surgeries (1.9%) and outpatient visits (1.6%).
  • The Dallas-based company reported a net loss of $232 million for the quarter attributable to the company’s common shareholders, compared to a loss of $9 million a year earlier.

Dive Insight:

Tenet CEO Ronald Rittenmeyer touted the results on Tuesday’s call with investors and said the company is raising its outlook for the year based on the numbers.

“We had a very positive third quarter with performance improvement in each of our operating segments,” Rittenmeyer said in a statement.

It’s the third consecutive quarter of volume growth, executives said Tuesday.

Rittenmeyer attributed positive trends over the past few years to a strong leadership team. “Tenet is in a much different place than it was two years ago,” he said.

Same-hospital patient revenue grew 5.8% and surgical revenue increased 6.9% on a same-facility basis.

Commercial volume trends were also very positive, executives said.

Still, they said the company faced more than $50 million in unanticipated headwinds including closures and costs related to Hurricane Dorian, lower California provider fee revenues and costs related to a nursing strike at 12 facilities.

The company is raising its outlook for adjusted earnings per share for the year. It expects adjusted diluted earnings per share from continuing operations of $2.25 to $2.91 for the year.

The company’s other segments also showed growth.

Conifer, the revenue cycle management unit, reported adjusted EBITDA of $90 million, an 11% increase from the previous year period. Tenet announced earlier this year it will spin off Conifer into an independent publicly traded company by the second quarter of 2021.

USPI, the outpatient surgical business, has a steady pipeline of health systems willing to send patients to the outpatient facilities, executives said during the call. During the third quarter, the company added three health systems and expects to reach a total of seven by end of year.

 

 

 

UnitedHealth to jumpstart Q2 results with eyes on volume, ‘Medicare for All’

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UnitedHealth Group on Thursday kicks off second quarter earnings as the first major healthcare firm to report results, setting the tone and expectations for the quarter. Wall Street analysts expect the insurance giant to post a strong showing, buoyed by its Optum business.

Volume trends, talk of “Medicare for All” on the campaign trail and emerging CMS payment models are among the topics likely to bubble up as payers begin reporting their earnings over the next few weeks.

Utilization subdued

Utilization is slowing in the second quarter, according to a June survey of 48 hospital administrators. SVB Leerink analysts noted this is a positive for payers and their medical cost trends and for hospital operators heavily invested in outpatient settings, including HCA and Tenet Healthcare with its outpatient surgical unit, USPI.

“Share of procedures in [inpatient] declined across all service lines except for spine, reinforcing the shift from [inpatient],” SVB Leerink analysts said.

Lab data is another good indicator of overall utilization and volume trends, Brian Tanquilut, an analyst with Jefferies, said. Tanquilut said he’ll be watching LabCorp and Quest closely next week to get a better idea of utilization trends for the quarter.

Drug rebate reform may not be dead

The White House last week pulled its proposal to ban drugmaker rebates to pharmacy benefit managers in Medicare and Medicaid in a win for payers. Stocks for UnitedHealth, CVS and Cigna rose sharply following the announcement.

That may not be the end for the proposal, however.

“It’s still alive and moving along in Congress,” Tanquilut said, referencing the Lower Health Care Costs Act sponsored by Sen. Lamar Alexander, R-Tenn., which was passed out of committee and is expected to be brought to the floor soon.

That legislation is broad reaching and includes efforts to ban surprise billing and boost price transparency, other payer hotspots.

With the rebate proposal, the administration had proposed to fundamentally alter the way drugs are paid for in the U.S. But federal budget forecasters warned it would increase spending by $177 billion over the next decade, given many of those rebates are used to lower premiums for Part D beneficiaries.

PBMs, most of which are owned by major payers, have come under fire as many grow skeptical of whether rebates really drive down drug spending.

The Alexander bill includes limitations on spread pricing — which have also garnered intense criticism — and would require PBMs to pass all of the rebates back to insurance plans.

Kidney overhaul positive for most payers

One issue on payers’ minds is the Trump administration’s recent effort aimed at overhauling the country’s approach to kidney care. The plan includes an executive order intended to incentivize home dialysis, increase prevention, make more organs available for transplant and spur development of artificial and wearable kidneys.

The Center for Medicare and Medicaid Innovation also introduced five new payment models, including one that’s mandatory. The center’s chief, Adam Boehler, told reporters the plan would “be broad and sweeping, impacting half the country.”

Analysts at SVB Leerink called the announcement a medium-term win for payers like CVS, Humana, UnitedHealth Group and Anthem. Humana in particular has upside potential because of its focus on Medicare Advantage and with Kindred at Home, which it acquired a year ago.

Cigna stands to benefit from its investment in Cricket Health, which aims to improve early detection of high-risk kidney patients, and UnitedHealth’s Optum arm continues to invest in home dialysis, analysts said.

They also noted CVS executives discussed early detection of kidney disease at the company’s recent investor day, saying home hemodialysis could drive as much as $1 billion in new business through 2022 (possibly accelerated by the CMS announcement). With CVS’ experience in complex patient home care and chronic disease management and the acquisition of Aetna, the company is “an ideal partner to manage chronic kidney disease.”

‘Medicare for All’ debate continues

With the 2020 campaign heating up among Democrats, Medicare for All was a hot topic during last quarter’s calls. A number of executives singled the idea out for criticism, sending payer stocks tumbling.

Since then, talk on the campaign trail of expanding government coverage has continued, although Medicare for All is just one of the ideas being discussed. This week, former Vice President Joe Biden rolled out a plan for building on the Affordable Care Act and increasing premium subsidies for people on the exchanges.

The issue will certainly resurface at the end of this month when candidates have their second primary debate.