Tag Archives: Pandemic

Five financial statements considerations for health actuaries to think about

Health actuaries have seen unprecedented challenges this year because of the ongoing COVID-19 pandemic. It has disrupted all facets of the U.S. healthcare system. How the pandemic affects an insurer’s financial statement will vary based on the distribution between lines of business, areas of service, and support channels.

As chief financial officers and actuaries attempt to determine the pandemic’s effect on year-end financial statements, the following five issues will require additional attention:

  1. Premium deficiency reserves
  2. Provider financial solvency
  3. Incurred but not reported (IBNR) claim estimates
  4. ACA risk adjustment
  5. Appropriate documentation

Milliman’s Catherine Murphy-Barron, Doug Norris, and Daniel Perlman take a closer look at these five issues in their article “Year-end health actuarial work: Five things to consider in light of COVID-19.”

How may social distancing affect Medicare Advantage organizations?

The COVID-19 pandemic has brought unprecedented stress and challenges to the healthcare industry. Based on the nature of the Medicare Advantage program and the predominantly elderly population it serves, Medicare Advantage organizations (MAOs) in particular face unique challenges. Beginning in early 2020, parts of the country implemented social distancing, with periods of closures or reduced capacity for many healthcare professional offices and postponement of nonurgent procedures at hospitals. Due to greater susceptibility, seniors may continue social distancing for more time and may be more hesitant to continue with normal social interactions, including receiving routine healthcare services.

In this article, Milliman’s David Koenig, Rob Pipich, and Michael Polakowski explain why MAOs need to be aware of the possible implications of these realities on their business and why they should address any issues now.

COVID-19 and proposed ACA market premium impact

Expected costs related to COVID-19 may increase or decrease health insurance premiums in the Patient Protection and Affordable Care Act (ACA) commercial markets. When setting premiums for 2021, health insurers will consider a variety of factors related to virus, including the acute treatment and vaccination for COVID-19, changes in access and demand for healthcare, lasting effects on population health, economic effects on enrollment and utilization of care, and other operational effects.

The National Association of Insurance Commissioners (NAIC) has released a template to assist state regulators in their reviews of 2021 premium impact assumptions for COVID-19. The template outlines a number of pricing considerations.

As of June 15, 2020, six states and the District of Columbia have publicly released preliminary ACA premium rates for 2021. This paper by Milliman’s Dane Hansen, Andrew Bochner, and Emily DeAngelis examines the reported impact of COVID-19 on these rates.

Communicating to employees during a pandemic

This spring has been an interesting and challenging time to be a business leader. As the workplace location, habits, and culture across the board have been turned inside out, leaders have had to think differently.

Returning to the workplace

While the move to working from home happened quickly, the return to work will be slower and more complicated. If you haven’t made movement back to workspaces and office buildings, think carefully about all of the implications of our new six-feet-apart world. How will you handle an employee who refuses to wear a mask when required? When will you open the kitchens and make coffee and water available? How many people will you allow in a restroom at a time? Do people have to walk clockwise around the space? Where do you put hand sanitizer stations? Setting aside all of the logistics, how do and will employees feel?

Tips for employee return-to-workplace communication

Like any other workplace change, making sure employees are aware and understand this new world will be equally as important as the actual changes themselves. Training, education, and effective communication are key aspects of many of the local requirements for returning to office buildings. Required or not in your area, they should be your top priority in the process of returning employees to any common workplace, in any location. As you begin to think through your employee communication strategy, below are a number of tips to keep in mind as you communicate return-to-workplace situations. We recommend working in partnership with a trained consultant and your legal counsel to ensure that you meet the requirements for your location (if any) and so that your employees recognize you take their health and safety seriously and understand what is expected of them.

  • Start with developing a clear and detailed safe work plan; review any policies that need to be updated
  • Write in plain, easy-to-understand language
  • Use images and diagrams where appropriate
  • Outline what the building management is doing, how the company is supporting this effort, and clear expectations for employees
  • Partner with Human Resources and legal counsel; they can help you steer clear of perceptions of discrimination and other potential employee relations or legal issues
  • Get input from your senior leaders; they should be knowledgeable and included well before you communicate to employees
  • Train your managers and supervisors on the safe workplan and what is expected of them; they are the front line of employee communications
  • Use different media to supplement a written plan; hold a webinar and record it; create a video; leverage your online employee portal; do a podcast
  • Make good use of signs throughout the office to help with key behaviors
  • Be clear where employees should go with questions
  • Start communicating well before individuals are allowed (or expected) to return to the workplace
  • Explain that the situation is fluid and manage expectations by noting that when new information becomes available the plan will be updated; communicate those key changes with leadership and employees

Careful not to overdo it

Especially now, employees want to understand what you are doing to keep them safe and to believe that you care. But you don’t want to overdo it either. Whether it’s due to a lack of trust or excess worry, some organizations are holding many more meetings than usual to “check-in,” which employees can find invasive and intrusive. If “eyes on your employees” was your primary form of performance evaluation, you might be feeling unsettled in this new work-from-home arrangement. In most situations, you’ve likely hired responsible, talented people who want to, and will, do good jobs under any circumstance. Trust they will and reward them when they do. Tip: Let them dictate the check-in frequency. Be willing to tailor your approach to the communication needs of the individual(s) or group(s). Then, over time, survey your employees and ask them how it’s working (the frequency, content, etc. of the communications).

Wherever you are along this journey, just don’t forget employees’ needs have shifted and will likely continue to change. Be flexible and willing to adjust your communication approach constantly. As you prepare for the next phase, whatever that might be for you, look for that Goldilocks communication approach—not too much, not too little, but just right.

Understanding the path to COVID-19 vaccination

Vaccinations have historically been shown to boost a person’s immune system, eliminate and prevent the spread of infections, and lessen the burden on the healthcare delivery system. The concept of using vaccines has been around since the 1500s with several accounts describing smallpox inoculation as practiced in India and China.

Vaccines undergo strict testing and research under U.S. Food and Drug Administration (FDA) standards prior to becoming available to the public. Vaccinating populations has helped countries take steps toward wiping out debilitating and deadly infections such as polio and smallpox.

In view of the COVID-19 pandemic, Milliman’s Stephen George has written a new paper focusing on:

  • Examining why, when, and how vaccines are used
  • Highlighting the vaccine development pathway
  • Reviewing previous experience with viral pandemics
  • Assessing ways payers can address COVID-19

Challenges of interpreting data, reports, and media coverage regarding COVID-19

As COVID-19 has spread around the globe, scientists, mathematicians, economists, health professionals, and thinkers of all types have worked within their fields of study to try to quickly understand, analyze, and explain the effects of the global pandemic.

On a daily basis, important and time-sensitive questions are being posed and answered through the popular media, scientific journal articles, and countless other avenues. With the abundance of pandemic-related articles and discussions, it can be difficult to sort through the noise and determine which sources of information can be trusted, what analysis might not stand up to scrutiny, and how to reconcile apparently conflicting findings.

Milliman consultants Pamela Pelizzari, Stoddard Davenport, and Carol Bazell offer some perspective by exploring the challenge of interpreting data, reports, and media coverage surrounding the COVID-19 pandemic in this paper.