Rising Patient Volumes: Indicators of Broader Economic Trends in Healthcare

Impact of demographic changes on patient volumes

Demographic changes, particularly an aging population, are driving increased patient volumes in Medicare and Commercial product lines, as well as higher Medicare Advantage utilization. This trend is expected to continue, contributing to mid-single-digit growth in healthcare services and overall spending due to demographic trends.

"These decreases were partially offset by increased volume due to growth in the Medicare and Commercial product lines, an increase in net investment income and improved fixed cost leverage across the business due to membership growth." --- (CVS, sec filing, 2024/Q1)

"And we expect that's likely to transpire over the course of the next couple of years, meaning it's going to take a couple of years to work its way through, whether it's the Medicaid redeterminations and the net result on health status and acuity and rate matching, whether it's in Medicare, the funding environment with where the rate notices have landed, whether it's the STARS methodology changes, whether it's the risk adjustment model changes, all of that's going to take a few years to sort of sort its way through as it relates to those government markets." --- (CI, conference, 2024/06/11)

"And we continue to see and believe over the coming years that it will be a mid-single-digit growth, and that will be a combination of demographic growth, maybe slowing a little bit in the latter years of this decade, but we continue to see that along with the penetration of more beneficiaries using Medicare Advantage." --- (HUM, earning call, 2024/Q1)

"We expect overall spending on health care to continue to grow in the future, due to inflation, medical technology and pharmaceutical advancement, regulatory requirements, demographic trends in the population and national interest in health and well-being." --- (UNH, sec filing, 2024/Q1)

"Our medical benefit ratio of 90.4% increased 580 basis points from the prior year quarter, primarily reflecting higher Medicare Advantage utilization, the premium impact of lower Star’s Ratings for payment year 2024 and unfavorable prior year development as compared to the prior year." --- (CVS, earning call, 2024/Q1)

Role of insurance coverage in patient volumes

Insurance coverage significantly impacts patient volumes by influencing how patients utilize their benefits. Adjustments in benefit design, pricing, and medical cost trends, as seen in Humana and Molina Healthcare's reports, directly affect patient engagement. Additionally, UnitedHealth Group's Medicare Advantage plans improve patient follow-up and health outcomes, further driving patient volumes.

"The effect on the Insurance segment benefit ratio is opposite of the Medicare stand-alone PDP impact, with the benefit ratio increasing as fully-insured members progress through their annual deductible and maximum out-of-pocket expenses." --- (HUM, sec filing, 2024/Q1)

"In January 2024, we entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation, subject to applicable regulatory approvals and other customary closing conditions." --- (CI, sec filing, 2024/Q1)

"Providing upside to our outlook for the balance of the year would be continued success with rate advocacy initiatives that could provide positive off-cycle rate adjustments.Turning to Medicare, our second quarter reported MCR was 84.9%, representing better than expected performance across all our Medicare products, primarily due to favorable risk adjustment results as well as benefit adjustments implemented for 2024.Our newly acquired Bright business in California is performing in line with expectations, and we remain confident in ultimately delivering the full one-rate accretion of $1 per share." --- (MOH, earning call, 2024/Q2)

"Within 90 days of one of our home visits, 75% of patients received follow-up in a clinical setting. Additionally, Medicare Advantage patients with chronic conditions who receive these home visits end up with better managed and more stable health outcomes, as evidenced by spending measurably less time than fee-for-service patients in emergency room and other hospital settings." --- (UNH, earning call, 2024/Q2)

"Benefits Expense The Insurance segment benefit ratio increased 320 basis points from 86.1% for the 2023 quarter to 89.3% for the 2024 quarter primarily due to higher Medicare Advantage medical cost trends in the 2024 quarter compared to the 2023 quarter partially offset by the impact of pricing and benefit design of our 2024 Medicare Advantage products, which included a reduction in benefits in response to the net impact of the final rate notice and the initial emergence of increased medical cost trends." --- (HUM, sec filing, 2024/Q1)

Impact of public health crises on patient volumes

Public health crises, such as cyberattacks, anticorruption campaigns, and pandemics, disrupt patient volumes but often see recovery, as evidenced by Gilead's experience. Increased compliance with health recommendations and broader vaccination rates, as noted by Moderna, also influence patient volumes. Long COVID significantly impacts the healthcare system and economy, further affecting patient volumes.

"While market volumes in February were temporarily disrupted by the cyberattack on Change Healthcare, volumes readily recovered in March." --- (GILD, earning call, 2024/Q1)

"And so we the research we have done and that others have published shows that there could be a dramatic increase in compliance with public health recommendations, so broader vaccination rates." --- (MRNA, conference, 2024/06/10)

"That has also been exacerbated by the anticorruption campaign. You may know that in July of last year, the government initiated an anticorruption campaign, which actually has had an impact on both procedural volumes and engagement from health care professionals. Now I must reiterate that we see this as a really good thing." --- (JNJ, earning call, 2024/Q2)

"the uncertainties inherent in research and development, including future clinical data and analysis of existing clinical data relating to the product, including post marketing, unexpected safety, quality or manufacturing issues, competition in general, risks associated with intellectual property and any related future litigation and the ultimate outcome of such litigation, and volatile economic and market conditions, and the impact that pandemics or other global crises may have on us, our customers, suppliers, vendors, and other business partners, and the financial condition of any one of them, as well as on our employees and on the global economy as a whole." --- (REGN, press release, 2024/05/31)

"Long COVID has significant societal impacts on the healthcare system and on the economy - and as many as 4 million Americans are out of work because of it." --- (MRNA, Twitter, 2024/04/04)