As the human and economic costs of COVID-19 continue to mount, reinsurers are working with healthcare executives on how to mitigate the impacts of the virus on the sector. The growing use of telemedicine and capacity constraints within our healthcare system will potentially dull utilization increases; however, the financial costs will still be significant.
Amid the COVID-19 pandemic, many health system chief financial officers (CFOs) are immersed in a struggle for their organization’s near-term survival. Looking more than a few weeks ahead may seem impossible or even foolish. Yet forward-thinking CFOs will begin transitioning from managing immediate challenges toward envisioning longer-term opportunities to strategically and financially reset their organization, according to Deirdre Baggot, PhD, RN, Partner, Bruce Hamory, MD, Chief Medical Officer, John Rudoy, PhD, Principal, and Dan Shellenbarger, Global Head, Provider, all of Oliver Wyman Health & Life Sciences. Oliver Wyman is an affiliate of Guy Carpenter.
The early stages of the pandemic saw many strongly held beliefs of the U.S. healthcare system obliterated, while long-awaited innovations were accelerated. Telehealth, digital apps and tools, and even drive-through testing sites are clear examples that our slow-to-adapt healthcare system can change quickly, with immediate improvements in safety, convenience, experience, and cost. CFOs should now consider how to seize upon this momentum and make these changes permanent, while championing additional changes that may have been untenable in the pre-COVID-19 world.
Over the next several months, CFOs should take critical actions to address human capital strategy, revenue recovery, cost reduction, and capital investment. Yet they also must approach this task with a new mindset.
Guy Carpenter has been developing a view of how COVID-19 may impact the medical (re)insurance market.