COVID-19 has disrupted healthcare possibly more significantly than anything else in our lifetimes. However, there’s now enough data available to predict and act on what’s likely to happen next.
To shine a light on what types of care have been diminished and the effect on future healthcare costs, Penny Moore, Chief Commercial Officer, and Anne Fischer, Sr. Director of Data Science and Methods, presented on the current micro-trends our team is seeing in the Springbuk platform’s aggregate data of over 3,500 employers. Below are the three areas they covered in their presentation:
What is Happening - A Look at Healthcare in the Days “B.C.” (Before COVID) and Today
Before we anticipate what’s to come, we need to first look back at where we were and where we currently are.
What did costs look like pre-COVID?
It’s important to emphasize that, on average, half of all healthcare costs around the commercially insured are driven by eight condition categories. Below you’ll find the breakdown of healthcare spending by category:
- Musculoskeletal Disease (13%)
- Cancer with Active Treatment (9%)
- Mental Health/Substance Abuse (7%)
- Mild/Moderate Infections (5%)
- Diabetes (5%)
- Gastrointestinal Disease (4%)
- Pregnancy/Delivery (4%)
- Preventive/Wellness (4%)
- All Others (50%)
At Springbuk, we realized early on that although healthcare costs were being significantly impacted, it was likely that not all conditions would be impacted at the same rate.
Anne Fischer shared, “We started thinking about the impact in terms of what we call ‘micro-trends.’ We quickly saw that the trend in healthcare spending is not, and never really was, a single trend. When COVID hit, the overall cost decreased, but not every trend reacted in the same way. And as we continue to return to what will likely be a “new normal,” each of these microtrends is likely to behave differently. If we can understand and describe the microtrends, we can begin to anticipate and describe the overall trend in a more informed manner.”
How has COVID-19 shifted cost and utilization trends?
As we begin to look at the data, simply put: “everything” went down in March and April.
However, with this micro-trend approach, we can focus on each of the top conditions and gain some insight into the pandemic’s likely impact. To help understand the trends in utilization and spend of the past few months, Anne called on her analysis of our aggregate platform data:
However, with this micro-trend approach, we can focus on each of the top conditions and gain some insight into the pandemic’s likely impact. To help understand the trends in utilization and spend of the past few months, Anne called on her analysis of our aggregate platform data to inform pre-COVID cost drivers (see figure A) and current demand shifts (see figure B):
“By observing these different profiles, we can begin to understand that different conditions might have been affected in very different ways by the pandemic and may adjust to a new normal in very different ways as we move forward.” - Anne Fischer
Now, looking at the data since March, we begin to see how each of these conditions has been impacted since the onset of COVID-19. The largest drop-offs indicated include Musculoskeletal, Infections, Gastrointestinal, and Preventive Care. These condition categories commonly include elective procedures and instances that can be less serious and postponed with little risk. By understanding the underlying conditions and care needs of your population pre-pandemic will inform what micro-trends require your focus.
What Might Happen - Healthcare Tomorrow
As previously mentioned, “everything” went down to some degree in March and April. But, to dive deeper and break down behavior into categories, the Springbuk team has focused on:
- Avoided Costs: Things that simply won’t occur.
- Delayed Costs: Things that have been postponed but will most likely still occur.
- Net New Costs: Complications from missed care, new diagnoses, etc.
How has COVID-19 impacted future health costs?
Through this approach, and the data currently available, we’re able to start to anticipate what we believe the micro-trends will look like given the various profiles of care that encompass each category:
“As you go down the list, you will see that each of the clinical categories has its own anticipated pattern based on its specific ‘profile.’ The biggest contributors to potentially delayed costs are either complications from avoiding certain types of preventive care and canceled elective procedures. We don’t know about the first one yet, but we can make some educated guesses on the second.” - Anne Fischer
It’s important to note the avoided and delayed costs associated with musculoskeletal diseases. Many surgeries in this condition category are known as “elective.” However, in this context, elective does not mean optional. Rather, these are scheduled procedures as opposed to emergent. In a “normal” year, across all conditions, elective procedures make up 20% of healthcare spend. Much like musculoskeletal surgeries, some of these elective procedures will be resolved or reconsidered, which leads us to anticipate a “spike” in spend over the months to come.
What other areas of care have COVID-19 impacted?
Throughout the pandemic, there has been a significant surge in the use of telemedicine. In our client’s data, we saw telehealth visits increase from 3 per 1000 members to over 75 visits, an over 2000% spike. COVID-19 has, in essence, interrupted the normal pattern of care.
However, with the increase in visits, the industry has also seen the cost of a telehealth visit rise from roughly $40 to about $90. As we anticipate the utilization of telehealth to continue in 2021 and 2022, it’s essential to ensure the payment structure keeps up and that providers and patients are not fiscally discouraged from this type of delivery system.
In addition to the costs associated with procedures and shifts to telemedicine, the pandemic has also required us to consider the costs of testing and treating the virus. Early on, the industry saw the initial cost of treating a catastrophic COVID-19 case was extreme. However, as providers became more familiar with what treatments are more successful than others, they’ve been able to treat patients more efficiently.
Testing for the virus has become more widespread, and while inexpensive, the ramp-up in volume will create excess costs in some capacity.
What We Can Do - Opportunity Amidst Chaos
Throughout the analysis and understanding of what has happened and where we’re going, the team at Springbuk believes that the disruption caused by COVID-19 presents the industry with an opportunity for reinvention and improvement.
What have we learned from COVID-19?
While we are rightly focused on patients seeking time-sensitive or truly emergent treatments, forms of unnecessary care have been brought to the forefront. These types of care include:
- Low-value care: Treatments that have no proven benefit. They are types of care that are still frequently delivered in this country, despite the lack of any medical evidence that they are useful or provide any value to the patient.
- Preference-sensitive treatments: These include clinically proven treatments to be effective in some patients, but where an alternative, usually less expensive and risky treatment is also available.
- Supply-sensitive care: Areas where care is more available (supply is greater), demand tends to follow, whether or not that demand is clinically justified.
“We have seen that promoting inpatient or specialist care might not always be as necessary as we might have thought in terms of patient risk and outcomes. We have inadvertently created what might be the world’s largest ‘field experiment’ that can help us determine when this type of care is truly important. We have the chance to reinvent what healthcare looks like going forward through novel plan designs and reimbursement strategies combined with patient education.” - Anne Fischer
- For more information on COVID-19, check out this White Paper filled with additional trends we’re seeing during the pandemic and a COVID-19 Healthcare Trends Tracker. This scorecard can help provide the information you need to guide your 2021 planning – right at your fingertips.
- To view the entire webinar presentation, "Opportunity Amidst Chaos: How COVID-19 Might Change Healthcare," click here.