The Impact of COVID-19 on Health and Finance

The new coronavirus has imminent and profound implications for health plans, benefit providers, health systems, and financial institutions. These constituents require a rapid strategic response as they brace for a landscape that is different from anything forecasts have offered to date. A digital workplace, interoperability, customer-centricity, and fraud prevention are just a few of the factors that will play a part in such a strategic response.

Digital workplace takes center stage. While dialing in to work is not an option for most front-line medical professionals, it is an option for administrative staff, billing, and back-office workers, and those who are not in the front lines are good candidates to be part of the digital workplace. Digital transformation makes business applications available on a range of devices, allowing work to happen anywhere, on any internet-compatible device, securely and swiftly. Unified communications and conferencing tools allow face-to-face conversations that replicate in-person ones. Document-sharing tools have been available for well over a decade now, and the technology is robust enough to handle demand. A growing number of applications are available on the cloud, meaning less reliance on licensed software than before.

Interoperability remains a hurdle. Interoperability of disparate electronic medical records (EMR) systems is the promise and the bane of the healthcare industry. The fix is not quick or easy. But the current environment brings renewed purpose to those initiatives. 

Customer-centricity is a must-have. Health plans and benefit providers have a pivotal role in managing public worries regarding testing and treatment for the new coronavirus as well as any underlying conditions that require medical treatment. While these organizations are likely to be in rapid-planning-and-response mode, member engagement must be part of that rapid planning and response. Some have already announced they will waive prior authorizations for COVID-19 tests or expand access to telehealth services, but that is only the tip of the iceberg of what member engagement can look like. If member engagement is all the rage with health plans, what else have you heard from yours about what your health plan will cover regarding treatments in the months to come?

Fraud, waste, and abuse find a friend in COVID-19. New codes associated with COVID-19 mean errors in billing and claims as well as an opportunity for data breaches and phishing tactics, creating downstream wrinkles for health plans when they review incoming claims for accuracy. This will have a ripple effect on health systems’ receivables at this critical time.

Considering these major trends, what are the implications for stakeholders in healthcare, health insurance, and benefits?

Health systems: Aside from the airline, hotel and hospitality, and tourism industries that are already getting hit hard, health systems are next to feel a strong impact from the COVID-19 fallout. For-profit hospitals are postponing elective surgeries and nonessential surgeries to prioritize care for COVID-19 and urgent care patients. This postponement erodes their revenue base and will test their ability to remain solvent. Chances are hospitals have some financial buffers in place, but the same cannot be said for smaller medical and dental practices that may suffer financially.

Health plans: Health plans must brace for the absorption of costs of COVID-19 testing and potentially the associated treatments over the coming months. While determining the responsible parties regarding treatment is already a contentious topic, the truth is that financial losses are likely and will create months of administrative challenges for health plans regarding claim reviews, denials, and administrative reworks. Financial challenges will require refinancing, debt renegotiation, and a search for federal subsidies or funding.

Financial institutions: This is the perfect time for FIs and investment firms touting their financial wellness services to don that financial wellness hat. This means counseling clients on debt management, reducing expenses, and preserving cash buffers in case of lost income, and educating them on financial planning, whether for daily expenses or long-term savings for healthcare and retirement. Credit counseling and medical bill advocacy and negotiation for clients may—or should—become part of FIs’ identity and value proposition. This may come at the expense of near-term income that FIs would otherwise generate through lending, credit card issuance, or other products, but it would go a long way toward building goodwill and restoring trust in the community.

Wellness and technology partners: Illnesses resulting from the new coronavirus are likely to recur over the coming years, not unlike the annually recurring flu, which will bring health and wellness even more into center stage. Health and wellness measures will have to go beyond COVID-19 vaccinations and step up efforts to mitigate complicated health issues down the road. Wellness providers will be on the front lines of communicating information, whether through discounts and incentives for enrolled members or personalized coaching and advice services. Technology partners can play a role using their data and analytics capabilities to identify those at risk.

Advisors, benefit providers, and third-party administrators: Trusted advisors, consultants, and partners have a chance to provide strategic and operational support to their employer clients, whether through communicating legislation that affects employer benefits and tax-advantaged health benefit options, or more. Communication must be relevant, with solid quantitative analysis weighing the pros, cons, and costs for clients so they can make informed decisions.

Amid the difficult news, we should keep our eyes on the big picture. This too shall pass, and a new normal—enriched with innovative technology to serve a digital workplace, online payment channels allowing for faster payments and reimbursements, telehealth and video communication services, and health and financial wellness programs—will emerge.

How can we help?

If you have a question specific to your industry, talk with an Aite Group analyst.  Call us today to learn about the benefits of becoming a client.

Talk to an Analyst

Receive email updates relevant to you.  Subscribe to entire practices or to selected topics within
practices.

Get Email Updates