COVID-19: Q&A on how payers are reacting

March 03, 2020

HRI spoke with PwC partner James McNeil about what health insurance companies are weighing in these early days of COVID-19 in the US. [Note, this information was last edited on March 3, 2020.]

PwC Health Research Institute (HRI):

We hear a lot about what the government and our public health system is doing to prepare for a potential COVID-19 pandemic but we haven’t heard as much about the industry perspective. How are health insurance companies approaching the potential disruption?

James McNeil, Partner, PwC Health Industries

I think it’s important for health plans to realize that COVID-19 should be addressed at the enterprise level, and not just by the HR department or by folks tasked with traditional business interruption planning.

The health plans I have spoken with in the last few days are focusing on workforce planning, member management and assessing the status of their vendors. Some plans work with hundreds of vendors, and understanding where those vendors are in terms of COVID-19 is turning out to be very important.

HRI: You mentioned workforce planning as a key area for preparation. Why? And what are insurance companies doing about it?

James McNeil: If your workforce can’t function, the rest of your planning becomes irrelevant. Some companies are focusing on their own employees. They are trying to figure out who has travelled overseas, and where they were.

They are thinking about what happens when employees say they don’t want to come in to work and would rather work from home. What are the triggers that may keep people from coming to work? What alternative work arrangements can be made?

One of the things we have learned from past disruptions to the US health system is that you always have fewer full-time employees working than when the situation is normal. So, someone on your team will have to make a decision about taking care of a relative, or who will watch their kids if the schools close.

You may have clinicians who work for more than one health company. Which organization do they report to in times of crisis? The bottom line is, you have to plan for a workforce shortage as a worst-case scenario. And the time to start planning, if you haven’t started already, is probably now.

The same kinds of thinking should be done for prior authorizations of certain procedures and testing. Is there a point at which the step of prior authorization is a barrier to better health in a public health emergency? Also, when do you start postponing certain types of procedures, like cosmetic ones, keeping people out of hospitals? When do you start pulling these levers? And which ones will be most effective?

HRI: What about member management?

James McNeil: The first area is communication. There is so much information out there—some of it wrong—about how to stay healthy. There’s a lot of confusion. So health plans have the opportunity to cut through the noise with fact-based recommendations.

Also, members are going to ask about health benefits. They are going to be more interested in telehealth, where they should go to get tested for COVID-19 and under which circumstances they should be tested.

There may be surges in requests for 90-day prescriptions and prior authorizations. There may even be more questions around what is paid for and where the member is in their plan year deductible. So plans should expect member communication to swell; capacity needs to be available to get people the right information at the right time.

HRI: What are some insurers not thinking about, but should be?

James McNeil: In a pandemic, the rules that are in place regarding coverage may need to be more flexible. Some plans are weighing increasing prescription lengths and moving more people to mail order prescriptions.

Why would they consider these changes? During a pandemic, it may be more risky to have the elderly and people with compromised immune systems out in the general public, exposing themselves to their infected neighbors, friends and family.

It simply may be safer to make it easier for people to stay home with longer supplies of prescriptions, or to have medications delivered to their doorsteps to reduce interactions in a retail setting. Do you want an 80-year-old standing in line at the pharmacy with six other people, three of them coughing and sneezing as they wait?

The same kinds of thinking should be done for prior authorizations of certain procedures and testing. Is there a point at which the step of prior authorization is a barrier to better health in a public health emergency? Also, when do you start postponing certain types of procedures, like cosmetic ones, keeping people out of hospitals? When do you start pulling these levers? And which ones will be most effective?

HRI: Why is taking a look at vendors important right now?

James McNeil: One of my clients has more than 400 vendors that they work with and manage. Health plan vendors sometimes manage the provider network, handle claims management, support data analytics and handle myriad specialized services. Some of these vendors are offshore, some in the US.

It becomes an interesting dance to even communicate with all of your vendors and better understand what their capabilities are and what their contingency plans are vis-a-vis COVID-19. So now it is about assessing the vendors and answering this question: How many functions can I turn off—if I need to—and still deliver the health insurance product?