How Health Insurers Can Be Heroes. Really.
A great paradox of this pandemic is that while Covid-19 is overwhelming the health care system, health care spending is down a whopping 18 percent. This is because discretionary surgical procedures and the use of other health care services have plunged. Hospitals and doctors are suffering financially while Americans are suffering physically.
But not all of the health care industry is hurting. Health insurers are doing just fine. Their revenues, based on premiums that were set in 2019, are stable. They are reporting high first-quarter profits because the drop in covered health services overall more than offset the extra cost of caring for Covid-19 patients. Indeed, their profits for the rest of 2020 are projected to be just as healthy as last year’s, which is why their stock prices are close to five-year highs.
Granted, this could change in the long run, as members lose insurance after losing their jobs, and providers roar back with more elective procedures. But for now, health insurers are thriving for the same reason that Americans and health care providers are suffering. So they should do their part in this crisis. They can become heroes alongside physicians, nurses and respiratory therapists.
Health insurers as heroes? It may appear that we’re being sarcastic, but insurers can take five steps to make this crisis — and the longer-term future — much better.
First, just as American taxpayers are providing trillions in financial relief to businesses and hospitals, health insurers should be offering financial relief to Americans. Auto insurers have provided premium rebates to customers because of reduced driving and accidents. Some health insurers have provided 60- or 90-day premium holidays, especially to small businesses.
Health insurers should provide premium reductions for 2020, with larger premium relief or suspension of premium collection altogether for the next three months for low- and middle-income Americans. More than 30 million people have filed for unemployment benefits in just five weeks, and many of them will need health coverage, especially in states that have not expanded Medicaid. Insurers could offer greater leniency on coverage extensions for members who lose jobs and their health insurance — it’s feasible, because many community nonprofit insurers are already doing it.
Second, many people are forgoing needed health care, including prescription drugs. The last thing we need in a pandemic is infected people not getting tested and treated, and spreading the virus to others, because they can’t afford basic care. For those who do have coverage, health insurers should make getting care cheaper. While many have waived out-of-pocket costs for Covid-19 testing and treatment, they should eliminate deductibles and co-payments for primary and preventive care and generic drugs for everyone, especially people with high-deductible plans, and remove co-payments for medications used to treat chronic disease.
For those who do need emergency care or hospitalization, providing grace periods on collecting out-of-pocket costs could go a long way. Insurers should also be mailing their members masks and gloves, free of cost, by covering it as preventive care. Getting appropriate health care is hard enough with physical distancing policies; at least the financial barriers can be reduced.
Third, health insurers should help primary care and other physician practices and smaller hospitals, which tend to lack deep cash reserves. With the decline in office visits and increased use of telemedicine, virtually all are losing money and many are going bankrupt.
Health insurers have advanced billions to doctors and hospitals. But more substantial help is needed. Health insurers should switch from paying doctors for services rendered (the fee-for-service model) to paying them a fixed fee per patient they care for (known as capitation), with adjustments for quality provided and how sick patients are.
The Hawaii Medical Services Association (the Blue Cross Blue Shield of Hawaii), did this a while ago, and guess what? Unlike doctors in other states, Hawaii’s primary care physicians are not on the brink of bankruptcy. Previous physician resistance to capitation has changed under Covid-19. The Massachusetts Coalition of Primary Care called upon state health officials to do it, but private insurers should do it too.
Fourth, health insurers should work with public health officials to prepare primary care practices and others to do Covid-19 testing and contact tracing. Many health insurers now employ doctors and nurses to develop clinical protocols, identify gaps in the quality of care, share data with physician practices on how they are doing, and directly work with patients through call centers. This system could be used to increase the public health response that is critical to saving our economy.
For example, health insurer call centers could assist in contact tracing. Health insurers also should be working with hospitals and physician practices to set up sites for members with Covid-19 symptoms to be tested and cared for rather than languishing at home. We don’t need more 20- and 30-somethings with strokes waiting it out at home because they are afraid of getting Covid-19 at a hospital.
Finally, health insurers should aggressively help doctors understand why fewer people are seeking care for conditions other than Covid-19, and help ensure that members get the care they need, because more of them may be dying for lack of treatment. During stressful times people are more prone, not less prone, to experience heart attacks and strokes. Yet those patients are missing from our hospitals.
Health insurers know which patients take drugs for chronic conditions. They should reach out to those who delay visits or miss prescriptions to get them what they need and let them know who to call for care.
Health insurers are profiting from the pandemic. While this may not last forever and some are already taking some of these recommended steps, all insurers need to step up and demonstrate their commitment to the nation’s health. They can help public health officials, health care providers and patients if they do. Then they could become heroes just like nurses and doctors.
Amol S. Navathe and Ezekiel J. Emanuel are physicians who direct the Healthcare Transformation Institute at the University of Pennsylvania.
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