Empty hospitals are losing millions per day due to declines in revenue and increased costs related to coronavirus; Health insurers seeing increased profitability

Christina Farr – CNBC

Link to story

Context

Discussion

Bill Kramer: “This is one side of the story. While hospitals may be losing volume now, there probably will be a flood of non-COVID-related utilization later this year due to pent-up demand.”

Elizabeth Mitchell: “Why isn’t it a success that people don’t need to be in the hospital?… “

Dan O’Neill: “Some of these assertions need a cautionary note. Pretty questionable to make a blanket stmnt that hospitals lose money on Medicaid or Medicare patients, or that a dip in hospital revenue is mirrored in gains for insurers vs. lower costs for employers, taxpayers and
patients.…

Self-insured employers would definitely realize savings, but insurers can’t benefit too much even in the risk book because of the MLR rebates. Maybe a bit, but only where they were running below their regulated profit cap before (I.e. spending extra on providers)

Taxpayers are likely to be in the hole, since they’ve already sent $175B in no-questions-asked grants to providers, and it’s unlikely that Medicare and Medicaid utilization drops by that much.

This article only mentions insurers, which is odd, and not really correct. Also seems to confuse insurer revenues with profit margins. Insurer revenues will depend on the number of people enrolled in privately managed plans (employer, individual, MA etc), not hospital spending.

Larry Levitt: “Many have been trying for a long time to reduce health care use. All it took was a pandemic. Now we’ll find out what the financial consequences are for health care providers and what the health consequences are for patients.”

Ryan Gentzler, MD: “Tough situation our health systems are facing in the setting of #COVID19. Perhaps a shift away from such heavy focus on procedure-based reimbursement models would help. Pay on time and level of training. Non-surgical respiratory illness is important, too.”

Ceci Connolly: “There’s no doubt the #COVID19 crisis places a big burden on hospitals but pandemic also highlights awful flaws & perverse incentives of fee-for-service, volume-driven health care. Need to get to value-based, even capitated models”

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