Health Plan Weekly

Influenza cases and hospitalizations — which dipped in 2020 and 2021 as the public took steps like masking and staying home to slow transmission of COVID-19 — are back this year with a vengeance.  

But while one equities analyst recently warned investors that such “heightened flu activity” could impact financial metrics for payers that haven’t priced for such a scenario, a credit rating analyst tells AIS Health, a division of MMIT, that insurers aren’t likely to take a major hit. 

Startup insurers that have gone public in recent years continued to lose money in the third quarter of 2022, although Oscar Health, Inc., Bright Health Group, Inc. and Clover Health Investments Corp. all varied in their performance on individual financial metrics. Perhaps the most notable part of the companies’ earnings conference calls, however, was executives’ discussion about decisions to pare down certain books of business amid profitability and execution struggles. 

Clover Health executives, for example, revealed during their Nov. 7 conference call to discuss quarterly results that the firm plans to scale back its participation as a Direct Contracting Entity (DCE) in CMS’s Global and Professional Direct Contracting  model. The program — which allows participants to share risk and receive capitated payments for serving fee-for-service Medicare beneficiaries — starting in January 2023 will transition into the revamped ACO Realizing Equity, Access, and Community Health (REACH) Model.  

More than 30% of rural hospitals nationwide could close soon, according to a new report from the Center for Healthcare Quality & Payment Reform (CHQPR). Health care experts tell AIS Health, a division of MMIT, that closures could have dire effects on rural communities, but health insurers may be able to spearhead changes in care delivery and payment models to help keep rural health care viable. 

According to the CHQPR report, 631 rural hospitals are at risk of closure in the “near future,” with over 200 of those at “immediate risk” of closing. In “almost half” of states, 25% of rural hospitals are at risk of closure, and in 10 states, 40% or more are at risk. Hawaii (75%), Connecticut (67%) and Alabama (60%) have the highest proportion of hospitals at risk of closure. Texas (50%) is the most populous state to have at least half of its rural hospitals at risk. This precarious state of affairs follows 112 rural hospital closures between 2010 and July 2019, per HHS. Rural obstetric care is in particularly poor shape. Researchers from the University of Minnesota found that 165 rural obstetric units closed between 2004 and 2014, “leaving over half of rural counties without obstetric services,” as HHS put it.  

The American Medical Association (AMA) released a report on Nov. 1 that found 79% of metropolitan statistical areas (MSAs) in the U.S. had low levels of competition in the Medicare Advantage market. The trade group for physicians and medical students also found similar concentrations in the commercial and health insurance exchange markets and warned that insurers’ dominance in markets can harm patients through higher premiums and lower levels of care. 

AHIP, the leading trade group for health insurance companies, countered with a press release on Nov. 4 arguing that “the AMA’s conclusions and allegations are simply false and wrong.”