Pandemic impact on commercial health insurance: Expenses and risk are both rising

Areas of growing interest for employers include behavioral health, musculoskeletal services and wellness programs.

However, the use of psychiatric services increased by 32%, the highest growth in use of all service sub-categories. This, combined with moderate price growth, resulted in a 43% increase in spending.

The pandemic has brought about significant changes in the way consumers interact with the health care system. The ripple effect of these changes will be felt not just for the rest of 2022, but well into the future.

“What really stands out for me is that even if the pandemic ended tomorrow, the health consequences of the pandemic are here to stay,” said Chris Whaley, health economist for the RAND Corporation. “The pandemic has been the greatest shock to American society, in terms of health and the economy, since World War II.”

Whaley participated in a panel discussion on the new Workforce Health Index from Castlight, a San Francisco-based health navigation company. Castlight CEO Maeve O’Meara shared the report’s key findings.

Related: 5 Factors That Can Make or Break Healthcare Spending in 2022

“One thing this report highlights is that employers are different, geographies are different, and populations are different, so look at the data,” she said. “The first point is that preventative care has not fully returned, and employers need to leverage things like incentives, which have been shown to have an impact on increasing care utilization. preventive.

“The second point is that preventive care usually leads to a conversation about primary care and behavioral health. What’s exciting about the data is that it’s clear that employers recognize that behavioral health is a challenge that has been effectively addressed in many ways, but there is a need to think about sub-populations such than teenagers.

Castlight analyzed more than 160 million medical claims, employer investments in digital programs, data from ecosystem partners and responses to its health risk assessment from plan sponsors. He focused on medical spending rather than pharmaceutical spending due to the disproportionate impact of the pandemic on the use of health services. Commercial medical spending grew steadily over the past decade until 2020, when the pandemic upended this historic trend. Annual spending per member increased by 7.1% from 2018 to 2019.

“In 2020, as a result of the pandemic, there was an almost 7% decrease in spending among commercially insured populations,” said Dr. Dena Bravata, Castlight’s chief medical officer and lead author of the report. “That spending has rebounded to essentially pre-pandemic levels. One of the main conclusions of this report is that we expect it to be stable for the rest of this year. »

The report offered several important takeaways.

Employees and their families are sicker than they were before the pandemic. The clinical risk for this population increased by 9.3% from 2019 to 2021. The risk for this population is only expected to increase by 3% based on the aging of the cohort over the period, so the increased burden of the disease was multiplied by three. what was expected.

Cuts to preventive care spending during the pandemic are expected to rebound in 2022, but fail to reach pre-pandemic levels. “Preventive services is a key category where we have seen decreased spending during the pandemic,” Bravata said. “Unfortunately, it has not rebounded to pre-pandemic levels. This is particularly concerning for self-insured employers who want to ensure members get the preventative services they need. expect dramatic cost increases down the road.

The use of telehealth has accelerated and shifted to virtual primary care and condition management. “One of the most lasting changes of the pandemic is the incredible increase in telehealth services,” she said. “Before the pandemic, most telehealth services were for lung issues. As a result of the pandemic, telemedicine services have increased 30 times in 2020. There have also been two other significant changes. The first is that the people providing these services are general clinicians.

The second change is that behavioral health accounts for a huge amount of telehealth visits for this population. “There’s about a 13% drop in telehealth services from last year, but that’s still 25 times the rates we saw before the pandemic,” Bravata noted.

Gaps in primary care utilization are even more pronounced in low-income communities. People in low-income communities forgo their care more frequently than those in wealthier areas.

“It’s clear from the data that communities of color aren’t accessing care or getting the right kinds of care at the rates we want to see,” said Ryan Schmid, CEO of Vera Whole Health. “There is no one-size-fits-all approach. We need to think about how access models and personalized engagement and awareness in this financial world support the ability to create programs to meet people where they are and meet their relevant needs.

Significant growth in employee demand for behavioral health services is expected to continue. “There was a steady march long before the pandemic of increased behavioral health spending,” Bravata said. “There was a small bump in 2020, but not as dramatic as people thought. On the one hand, the increase in behavioral health spending is a good thing. These are people who receive the care they need. But it also reflects the fact that more people need behavioral health services.

The demand for musculoskeletal services has been exacerbated by the pandemic and is expected to increase in 2022. “There was a slight decline in musculoskeletal care in 2020, but it’s now back to pre-pandemic levels,” she said. “This is the top category of spending over the past five years, followed closely by cancer care.

Investments in health and wellness programs have increased. Employers have steadily increased their investments in digital health programs. In 2021, the average employer offered more than 12 digital programs to their employees.

Despite the challenges, panelists are optimistic about the direction the industry will take over the next five to ten years.

“The fact that you see such a decrease in preventive care and an increase in behavioral health issues creates a potential tsunami of negative outcomes and subsequent expense,” Schmid said. “That’s the risk, but it also creates an opportunity. One thing that was reinforced is that you can’t separate the social from the mental from the physical. There is a growing demand for solution integration.

“The fact that employers are starting to demand the ability to pay for results rather than just services is really important. You will see supply catching up with demand in a really powerful way for our society.


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