While U.S. providers have suffered profound financial losses because of COVID-19, health insurance companies have actually benefited from the pandemic. Providers require effective strategies to achieve a more equitable balance.
Healthcare utilization has dropped sharply as a result of COVID-19, causing most hospitals to experience a major drop in revenue and margin. But for most commercial payers, lower utilization has slashed claims expenses and created a huge financial windfall.
For example, United Healthcare’s net income doubled during the first wave of the pandemic, jumping from $3.3 billion (2019 Q2) to $6.6 billion (2020 Q2).a
Although these market dynamics clearly seem unfair to providers, there is no reason that providers should simply accept the status quo. As they struggle to recover financially from COVID-19, hospitals and health systems should not hesitate to look to insurers to share their excessive surpluses.
Right now, the biggest potential opportunities for providers are in contracting with insurers. Financial leaders should focus on three broad areas where they should seek to renegotiate existing contracts and lay the groundwork for beneficial new partnerships.