Annual checkup: Taking the temp on health care for 2022
Insurance and health-care experts see a future of telehealth, a return to routine care and only a slight rise in rates
As employers and individuals shop for health insurance during fall enrollment, they might also evaluate how they use health care. The COVID-19 crisis made people contemplate their own wellness, and it made businesses reconsider how they control health-care costs. According to the U.S. Bureau of Labor Statistics, health care is typically one of the most expensive benefits for employers to provide, constituting 8.2% of total compensation for civilian workers in March 2020.
One piece of good news is that insurance premiums are rising, but not by much. “Employers last year saw their costs remain relatively flat, maybe up a little bit,” says Bill Lindsay, the principal with Lindsay3, a Colorado-based health-care consultant firm. “Because of COVID there weren’t a lot of people going for elective procedures, hospitals were not full, and there were some COVID expenses but not that extraordinary.”
Employers used to see rate increases of 10% to 12% each year, Lindsay says, but last year they saw only an inflationary increase of 4% or 5%. This year the increases might be slightly higher, about 5% or 6% over last year’s rates. “Insurance companies during COVID made a lot of money,” Lindsay says.
According to a December 2020 report from the health policy analysis firm KFF, the decrease in health-care spending and utilization in spring 2020 led to rising margins and profits for health insurers. At the end of third quarter 2020, gross margins among individual market plans were 21% higher compared to third quarter 2019. For the group market, which includes employer plans, gross margins were 24% higher.
While rates will not change much, other pandemic-related trends will remain in place in 2022, and will affect health-care costs.
Technology will lead
The biggest change is telehealth, which was available before the pandemic and exploded in popularity last year. “The COVID-19 pandemic represented a watershed moment in the adoption of virtual care,” says Marc Neely, chief executive officer for UnitedHealthcare Employer and Individual, Colorado and Wyoming. Consumers embraced telehealth for urgent, preventive and routine care, for chronic condition management, and for behavioral health. “This trend is expected to continue, especially with COVID-19 cases persisting.”
According to the 2020 UnitedHealthcare Consumer Sentiment Survey, 56% of consumers said it is likely they would use virtual care for medical services. UnitedHealthcare expanded the availability of virtual care with local physicians for members enrolled in employer-sponsored plans. While the service enables workers to save time by participating in a 15-minute visit on their smartphone instead of taking an hour to drive to a clinic appointment (and find parking), there are other advantages. “The broader adoption of virtual care may help flag gaps in care, prevent complications and avoid unnecessary hospitalizations, all of which can help improve health outcomes and curb costs,” Neely says.
Other innovative tech solutions will curb costs. Continuous glucose monitors, activity trackers and personalized coaching can help people with type 2 diabetes achieve better health outcomes, reduce out-of-pocket employee costs, and lower the total cost of care. “Employers may consider using these challenging times as an opportunity to re-evaluate how they approach health benefits,” Neely says. “Encouraging a healthier workforce is vital to reducing absenteeism and presenteeism, both of which sap productivity and may make an employer less competitive.” (Presenteeism refers to working while sick.)
Appointments will increase
During the pandemic, many people skipped routine screenings. That has changed. “We are seeing more people willing to get tests done,” says Dr. Scott Joy, internal medicine physician and chief medical officer for HealthONE Physician Care. They are getting mammograms and colonoscopies, and at-home tests such as Cologuard for colon cancer. “There are a lot of unrecognized screening tests the pandemic raised awareness of.”
Among the screenings recommended by the U.S. Preventive Services Task Force are hepatitis C, for adults 18 to 79. Medications are now available to treat hepatitis C, which provide an easier and less costly alternative to a liver transplant. Other tests that are recommended, and that employers can encourage workers to get, include an abdominal ultrasound to detect an aneurism (for smokers). Another trend is more monitoring at home with oxygen monitors, blood pressure monitors, and other consumer-friendly tech.
The pandemic and the COVID-19 vaccine also raised awareness of other vaccines, Dr. Joy says, and people are expressing interest in getting pneumococcal vaccine (recommended for adults 65 or older), and shingles vaccine (adults 50 and older who have had chickenpox). “These things lead to big savings downstream,” Dr. Joy says.
Even if the predictions of more preventive care, screenings and other positive changes come true, there is still potential for increased health-care costs. Lindsay points to pharmaceutical pricing as one factor, due to new developments in expensive specialty drugs. There are several federal efforts to remedy this. In July, President Joe Biden signed an Executive Order Promoting Competition in the American Economy. Among the agency responsibilities in the order, the Secretary of Health and Human Services is to develop a plan “to continue the effort to combat excessive pricing of prescription drugs.” Also, H.R. 3, the Elijah J. Cummings Lower Drug Costs Now Act, was introduced in the U.S. House of Representatives in April.
Another factor is the rise in demand for behavioral health. Insurers have not increased reimbursement rates for mental health. “The worrisome issues create a murky picture when you look at 2022,” Lindsay says. “There are a lot of variables that impact cost.”
Surge in procedures
According to a June 2020 report by the Centers for Disease Control and Prevention (CDC), 41% of U.S. adults said they were delaying routine or emergency care because of concerns about COVID-19. Many of those appointments have since been rescheduled.
“We are probably back stronger than pre-COVID,” says Dr. Scott Lichtenberger, group president of physician alignment for Centura Health. The patient volumes in gastroenterology, orthopedics, cardiology and ear nose and throat (ENT) have returned to pre-pandemic levels, partly due to Centura Health’s campaign that highlighted the cleanliness and safety of the facilities. “We helped rebuild some of that confidence.”
There are also increases in surgical volumes, and many procedures are performed without an overnight hospital stay. In August, the Centers for Medicare & Medicaid Services (CMS) noted that among its proposed changes for calendar year (CY) 2022 was removing several procedures from the Inpatient Only (IPO) list, noting that significant developments in the practice of medicine increased the safety and effectiveness of providing services in outpatient settings.
“The trend of more surgeries being done on an outpatient basis has only accelerated with the pandemic,” Dr. Lichtenberger says. “People have become more comfortable with surgery in an outpatient setting.”
Emergency rooms are also back to pre-pandemic levels. “We are seeing heart, trauma, car accidents, all the reasons people come to the ER,” says Dr. Nick Tsipis, ER physician and associate medical director at Swedish Medical Center, part of HealthONE. “With that return in volume, it really heightens the importance of trying to contain the pandemic as much as possible. Our ERs are humming, and the last thing we want to do is overwhelm the system.”
Respiratory season is approaching, Dr. Tsipis says, and people will need treatment for everything from the flu to RSV (respiratory syncytial virus that affects children). The CDC reported that the 2020-2021 season saw a “low level of flu activity,” due to the record number of influenza vaccines distributed, as well as face masks, social distancing, handwashing, and other COVID-19 mitigation. While many people will continue some of these behaviors, employers can play a role in preventive care.
“Encouraging your employees to be vaccinated protects them, even with the Delta variant,” Dr. Tsipis says. “It helps control health insurance premiums. When folks get seriously ill and have prolonged illnesses, costs soar through the roof.”