The coronavirus pandemic will have a significant impact on the health insurance industry owing to the methods consumers engage with healthcare, said Moody's Investors Service (Moody's) in a new report.
The report added that the ability or inability of Moody's-rated health insurers to adapt to these changes in the next three to five years will be an important driver of credit strength.
According to Moody’s healthcare trends which will affect health insurers include the ongoing focus of the high cost of treating patients with comorbidities – people suffering from more than one chronic illness at the same time, be it physical or mental.
The coronavirus pandemic has exacerbated the challenge of comorbidities and this group has proved especially vulnerable to the coronavirus, further highlighting the need for proactive management on the part of health insurers.
With the onset of the coronavirus pandemic, telehealth usage has soared, especially with telephone consultations with a patient's primary doctor. "But telehealth is much more," said Moody's vice president Dean Ungar.
"One large health insurer reported 15m telehealth visits in the first half of 2020 compared with 1m in all of 2019. Telehealth clearly filled a gap when patient access to in-person care was severely restricted as well as bringing healthcare access to rural areas."
Telehealth is proving particularly valuable in treating mental and behavioural health conditions, and can serve as an early warning system, alerting the health insurers to patient conditions that might otherwise have remained undetected, said Moody’s.
The health insurance industry has been shifting from the traditional fee-for-service reimbursement model to providers to a value-based care model.
Some providers were reluctant to fully adopt the value-care model due to risk, but doctors in value-based care arrangements have experienced a much more stable flow of income during the lockdowns. The coronavirus pandemic should help accelerate the trend to value-based care.