Health Plan Weekly

UnitedHealth Group on Oct. 14 reported that its adjusted earnings per share (EPS) was $3.51 for the third quarter, beating the Wall Street consensus of $3.11. According to a company news release, UnitedHealth brought in $65.1 billion in the third quarter, representing an 8% increase year over year. However, the $3.51 adjusted EPS for the third quarter of this year is a 10% drop from last year’s third-quarter EPS.

Like other health insurers, UnitedHealth has benefited from reduced care utilization due to the COVID-19 pandemic: in the second quarter, the company posted a 70.2% medical loss ratio (MLR) (HPW 7/20/20, p. 3). In an Oct. 15 investor note, Citi analyst Ralph Giacobbe pointed out that the firm’s reported third-quarter MLR was 81.9%, lower than the Wall Street consensus projection of 83.6%.

The COVID-19 pandemic has been especially harmful to people of color in the U.S., as they are more likely to suffer financial hardship, extreme cases of the disease or death than the white population. Experts say the devastation to communities of color is the product of systemic racism — particularly a lack of access to insurance coverage and quality care — and the pandemic’s economic consequences will make all of those problems worse.

According to a Sept. 15 report released by the Kaiser Family Foundation (KFF) and the Epic Health Research Network, people of color were more likely to test positive for COVID-19 and to require a higher level of care at the time of diagnosis compared to white patients, and they also were more likely to be hospitalized and die from the novel coronavirus than white patients were. The report found that:

In recent notes to investors, equities analysts have suggested that the best-case scenario for the managed care industry might be a Democrat in the White House and a split Congress — reasoning that partisan gridlock would cause the status quo to prevail. Still, they say, the outcome of the upcoming elections is less important than the anticipated benefits of simply moving past the uncertainty that they’ve generated.

The election and concerns about the Affordable Care Act’s future “kept a lid” on MCO stock prices most of this year, Jefferies analysts David Windley and David Styblo wrote in an Oct. 12 research note. “We think those are starting to come to an end and will improve sentiment and valuation. We believe MCOs rise regardless of election outcome.”

✦ Priority Health, a subsidiary of integrated health system Spectrum Health and Michigan’s second-largest payer, announced a new suite of incentives for provider agreements that are intended to improve social determinants of health, while Pennsylvania-based payer Health Partners Plans (HPP) announced plans to expand its own SDOH mitigation program. A Priority Health press release claims that the insurer is the first in Michigan to offer such incentives to network members. “We understand that to effectively manage the health and wellness of a patient population, you need to look outside of the clinic walls. Being able to reward providers who are identifying these specific needs based on social factors is a step in the right direction,” said Mike Jasperson, senior vice president of provider network strategy at Priority Health. “Having access to this type of data will eventually allow for both providers and payers to increase the quality of care that is delivered, reduce total cost of care for members, and directly address the needs of vulnerable populations.” Meanwhile, HPP unveiled plans for an “SDoH Regional Council,” which will convene community stakeholders to address social challenges. Read more at https://bwnews.pr/3lvS6N7 and https://bit.ly/3nyODyX.

✦ Based on oral arguments before the U.S. Supreme Court, legal experts say that PBMs have a good chance of winning repeal of a 2015 Arkansas law that strictly regulates how drug benefits are managed. The case, Rutledge v. Pharmaceutical Care Management Association, centers on whether a law known as Act 900 is preempted by the Employee Retirement Income Security Act of 1974 (ERISA), which bars states from enacting laws that “relate to any employee benefit plan” covered by the federal law. “My impression was that Arkansas got the toughest questions from the bench but was bolstered by the Trump administration’s response,” Katie Keith, a health care attorney and faculty member at Georgetown University’s Center on Health Insurance Reforms, tells AIS Health. “And it certainly seems like the Justices are considering the broader impact of their ruling, on PBMs specifically and on ERISA plans and state regulation more broadly.” Read more at https://bit.ly/2SADYpg.