How has COVID-19 Impacted the Cost of Global Healthcare?

In this latest In Focus cost containment article, iPMI Global takes a look at the impact of healthcare costs, due to the COVID-19 global pandemic. Taken from the recent round table,International Medical Cost Containment And Claims Management Strategies.

Although international risks have changed, the cost of healthcare around the world remains a key concern for the international private medical insurance market. The round table looked at the complex nature of international cost containment and how medical payors and providers may leverage cost containment strategies to improve the standard of care and reduce the bottom line. 

Q: COVID-19 has had an unprecedented impact on finances for GOVT, businesses and consumers worldwide. Overall, how is COVID-19 impacting the cost of global healthcare?

Elena Donina Glukhman, AP Companies: Covid-19 has hugely increased the cost of Global healthcare, being a condition that may result in all kinds of complications, long hospitalisations and unpredictable effects on all human body, the impact on Healthcare Costs is very impactful.

Nicole Perreault, AXA Partners US: The impact of the pandemic is clearly far-reaching. As for the financial portion, we have seen the creation of a larger grey area or lack of clarity on COVID related medical expenses; Medical spend is nearing record levels in many countries and the average price of handling a COVID case still varies from one place to another, depending on how hospitals are treating these patients. Not to mention labour shortage issues and supply chain challenges in many countries. The billable rates for medical staffing, supplies, equipment, and other devices will also continue to be major cost drivers.

James Walker, Charles Taylor Assistance: With the rise in inflation in 2022, the impact specific to COVID-19 is hard to determine. The many varied factors driving the cost of healthcare upwards combine to influence the increases we are seeing. It is clear in some markets that COVID-19 has caused significant impacts on income for medical providers, especially those in locations where international tourists make up a large share of these incomes. Healthcare costs will ultimately increase in these locations as providers try to recoup two years of lost incomes. In addition, the cost of testing and PPE, although small, means that simple outpatient procedures are increasing in cost, with new items being added to bills which did not exist prior to the COVID-19 pandemic. 

Dr Peter Mills, Cigna: In 2020 we experienced a massive drop, in care utilisation due to the restrictions imposed across the globe as the pandemic began to change how we lived our day to day lives. This year, in terms of accessing care, we have witnessed a bounce back as countries re-open their borders to expats.

The cost of care has increased due to conditions like cancer care and cardiovascular care, where cases have been delayed due to the Covid-19 pandemic and are now at a more advanced stage.

Also, healthcare insurers are seeing additional costs from providers for Covid-19 safety measures. Such as PPE, additional hygiene protocols and testing of patients and staff.

Finally, the healthcare sector experienced the same inflation pressure as other sectors.

Susan Yates, Falck: Three years ago, we would not have spoken about supply chain issues, the great resignation, war in Ukraine, a mental health crisis for children, and rampant inflation; however, today we must face the reality that healthcare costs are being influenced by these factors.  Even in normal times, global healthcare costs increase at an alarming rate, and for years payers have been seeking ways to curb these rising costs.  Now, the challenge to curb rising costs is even more urgent.

At Falck, we perform aeromedical evacuations daily, and we run one of the largest ground ambulance businesses in the world; it goes without saying that rising fuel prices have impacted our costs.  Similarly, as we manage inpatient and outpatient cases for our clients around the world, hospitals and clinics are telling us that they have been severely impacted by COVID-19, and that they are having difficulty finding and retaining medical staff.  They wish to build those additional costs into the prices we pay.  Our mission is to ensure that Falck pays a fair price for medical care – as stewards of our customers’ funds – and, thanks to our strong network and negotiated rates, we can combat these challenges with good success. 

John Spears, Global Excel: True, the financial impact of COVID-19 has been devastating worldwide and the heavy costs to governments and various industry sectors are still being counted.

The impact of COVID-19 on the costs of global healthcare are very nuanced, however. On one hand you need to measure the costs of overwhelmed healthcare systems, shortages of staff, the costs of the production and provision of the vaccines, the initial shortages of supplies like masks and ventilators, etc. We also saw (and continue to see) clear cases of price-gouging from certain providers. There will also be the future medical costs of those who contracted long-term COVID. 

On the other hand, we also saw delays in elective treatment because hospitals were operating at capacity. Many people delayed possible preventative treatment because they simply couldn’t see their doctor in the traditional manner. These delays will have an impact on future healthcare costs, however, as patients seek treatment for more serious conditions which should have been treated earlier. 

Many travel insurers, as an example, saw significant decreases in their overall medical spend because the travel industry essentially shut down. Unfortunately, that was also accompanied by a significant increase in non-medical claims as trips got cancelled or interrupted. Naturally, the decline in travel also meant a significant decline in healthcare insurance premiums. Recently, we’ve also seen significant increases in provider prices as hospitals attempt to recoup lost revenues.

After 18 months of pandemic lockdowns, a significant shift in the needs and preferences surrounding healthcare utilization appears to have occurred and seems likely to remain over the long term. This change in the way healthcare is delivered will have a long-term impact on costs owing to the simple fact that people are visiting hospitals less than they normally would to avoid infection and are using remote healthcare options for less critical issues.

Our best estimate for the next five years includes some further investment in better defined guidelines for telehealth use and management versus in-person care, followed by savings provided by remote care. The rest depends on politics – the duration of pandemic lockdowns and the severity of any new variants, as well as our capacity to respond to them. Overall, we see a shift in the customer experience going to digital access first, with an increased demand for human intervention. Many countries will start to offer digital services which will reduce their financial burden, further democratizing access to quality healthcare. With travel slowly rebounding, access to care will become a key element in travel planning.

Monica Rummelhoff, GMMI: The impact of Covid-19 on the cost of global healthcare is immeasurable. An obvious source of distress is the cost of managing symptomatic Covid-19 infections, particularly in the ICU. On the extreme end, patients spend months in the hospital undergoing mechanical ventilation, dialysis, ECMO and other lifesaving modalities. Another subset of patients frequently visits emergency departments and clinics in search of symptomatic relief, possibly including antibiotics, steroids, vitamins, other supplements, and meds. However, what is probably underappreciated is the impact on people and populations suffering from other co-morbid illnesses. It is well documented that cancer treatment is being delayed and preventative screening tests are being postponed. To this day, patients still fear going to the hospital to some degree, which will significantly impact their long-term health. Sadly, the resilience of the SARS-CoV-2 virus has not allowed us much breathing room to predict or estimate the overall financial impact. Outbreak control has been very challenging and while the vaccine effort has shown promise, it is the clear that on a global level, there is a very long way to go. The number and suspected cost cannot be quantified; it is extreme and will be felt on a global basis for years, possibly decades to come.

Gitte Bach, New Frontier Group: Healthcare costs have increased globally due to the COVID-19 pandemic. When such a large public health emergency occurs, healthcare costs fall largely on governments. Many governments are supporting providers and hospitals when it comes to COVID-19 treatments, testing, vaccines, and other COVID-19 related diagnoses.  

As COVID-19 restrictions continue to loosen and travel continues to increase, utilisation and demand for services globally is also starting to rise back to pre-pandemic levels.  

Additionally, the pandemic has accelerated some exciting new developments in medicine, such as telecare services that have begun to play a much larger role in driving down cost in a post-pandemic healthcare system.  As needed treatments become more easily accessible, we can keep patients out of medical facilities and avoid high emergency department charges.  

Mike Rizo, PharmCare: The strain on resources, the limited new supply, and the global drug stockpiling during the early months of the COVID-19 pandemic were extreme measures not seen since the end of the second World War, nearly 80 years ago. Purchasing increases are up across all medicine types as a new nation classification emerges - those with swiftly growing economies that are targeted by pharmaceutical companies with a per-capita income of less than $30,000 a year. These countries include exploding population hubs like Russia, Brazil, China, and India. Abnormal purchasing patterns were seen by both companies and individual patients based on the prescribed responses to COVID. The stay-at-home orders that nearly every country adopted during the early stages of the pandemic led to spikes in over-the-counter drug purchases for calming, sleeping, and stable mood drugs, while the demand for antibiotics and pain medication dwindled. Factors like these have skewed the cost of many forms of medications in different directions in the time since. What is unchanged is the mounting cost of cell and gene therapies, along with biosimilars. Employers are covering these increases in the US for now. This will continue to increase the cost of insurance premiums.

Sumit Gaurav, Roy Medical Assistance: Yes, it is true, and it is unpredictable truth that Covid-19 had an unprecedented impact on finances for GOVT, especially for major developing countries, business, and consumers globally. During the period of Covid it has played a vital role on the cost of global healthcare.

The COVID-19 pandemic has severely impacted the ongoing health programmes. Logistics and supply of essential drugs and personal protective equipment adversely affected the health system with the result to restrict the capacity to provide essential health services to the critical and vulnerable areas. Hospitals and health care centres are mainly observing with COVID-19 patients, making it more difficult for other vulnerable, children, and elderly persons. The impact of the pandemic on their growth and protection against infectious diseases has been severely impacted. Discontinuation and disruption of services for essential immunization vaccine preventable diseases may provide the virus to spread further and faster.

Alerah Turner, World Travel Protection: There is unprecedented volatility in the healthcare markets, and this is due to a multitude of factors such as increased cost of service driven by higher utilisation rates, deferred care as a lot of governments and medical centres ceased elective surgeries during the height of the pandemic, the ongoing cost for treatment of COVID, increases to mental health challenges, plus the impacts seen to global supply chain availability and quality. It’s ultimately the perfect storm for increased healthcare costs globally.

To read the complete round table, International Medical Cost Containment And Claims Management Strategies, click here.

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