COVID-19 impacts on health plan finance, actuarial, and analytics has been saved
COVID-19 impacts on health plan finance, actuarial, and analytics
Considerations for health plan leaders
While no one knows exactly what the health care industry will look like after COVID-19, there are steps organizations can start taking today to prepare. Explore considerations for finance, actuarial, and analytics leaders as they guide their health plans through the recovery process and prepare to thrive.
- Planning for an uncertain future
- Key uncertainties driving market change
- Setting a path for recovery
Planning for an uncertain future
COVID-19 has created unprecedented challenges for the finance, actuarial, and analytics leaders of health plans and integrated delivery systems (IDS). These leaders have been charged with rapidly quantifying and predicting the impact of an outbreak that still has many uncertain risks and consequences, all while maintaining normal business functions.
In a typical crisis, we tend to see things play out over three timeframes:
- Respond: Dealing with the present situation and managing continuity
- Recover: Learning and emerging stronger
- Thrive: Preparing for and shaping the “next normal”
If your organization’s COVID-19 efforts to date fall in the first category, you’re not alone. However, as the number of COVID-19 cases reach their peak, health plan and IDS leaders will increasingly turn an eye toward recovery and thriving.
In this article, we explore considerations for resilient finance, actuarial, and analytics leaders as they guide their health plan and IDS organizations through the recovery process and prepare to thrive.
Key uncertainties driving market change
Financial, actuarial, and analytics leaders have been or will soon be charged with the difficult task of anticipating what the health care market will look like following the COVID-19 crisis to enable organizations to plan for the necessary changes in their product and pricing, network management and contracting, reserving, forecasting, and finance functions.
While the circumstances driving the COVID-19 crisis are unique, another event—the enactment of the Affordable Care Act (ACA)—also served as a catalyst for major change in the health care market, albeit in different ways. The ACA generated significant opportunity to capture market share for health plans that redesigned their strategy to correctly anticipate the shifts in demand, while some plans that did not strategize for the new dynamics lost market share or lost substantial profit by attracting a higher-risk, less desirable market share. We anticipate the period following the COVID-19 crisis will present similar opportunity for organizations that proactively anticipate market trends.
Based on the post-ACA trends, along with our observations so far from the COVID-19 crisis, there are three key macroeconomic uncertainties organizations should watch during the remainder of 2020:
- Degree of regulatory change
- Economic impact on unemployment and enrollment
- Change in consumer behavior
The degree to which a health plan or IDS can anticipate these uncertainties will guide their preparations to recover and thrive.
Setting a path for recovery
An organization’s path for recovery from the COVID-19 crisis will vary not only based on its expectations for how the market will react, but also with its size and risk appetite. Setting a strategy will require and organization-wide effort that financial, actuarial, and analytics leaders can help guide.
There are multiple actions that resilient health plan and IDS leaders can begin planning for today to guide their organization in the future. Scenario planning will play a large role in helping leaders to picture how the market may shift for the remainder of 2020 to enable effective decision-making.
Current analytics and modeling may need to be enhanced to be more agile, incorporate near-real-time data, and integrate with and support the enterprise-wide strategy. Financial, actuarial, and analytics leaders informed by these models and capabilities can play a key role in setting the organization on a smooth path to recover and thrive.